Snacktime shares drop after profit warning

4th Sep 2014 12:33

Vending machine operator Snacktime said its full-year earnings will be £2m, or 15%, lower than previously expected.The Wokingham-based firm said it expects earnings before interest, tax, depreciation and amortisation for the year ended 31 March to come in at around £1.1m, a 60% increase from the £0.7m the company reported the year before, but lower than the £1.3m it had anticipated in April.A change in the balance of estimated stock and cash in machines and a "more prudent approach to doubtful debt provision" at its division Snack in the Box were cited by company as the reasons behind the revised guidance.The company said it would take £7.2m of exceptional costs for the year, £6.6m of which represent non-cash writedowns of intangibles across the group.A writedown of £2.8m was attributable to its Drinkmaster unit, reflecting reduced future profitability due to revised trading arrangements with its largest customer William Hill. Impairments of £2.8m were taken due to the reduced performance and estate in the vending division, while a revaluation of Snack in the Box led to a £1m writedown.Sales guidance was maintained at £19m, from £20.5m the year before.Snacktime shares were down 26% to 9.99p at 11:30 on Thursday.DC