EXCLUSIVE: Planet Vending Editor Ian Reynolds-Young met SnackTime Chairman Jeremy Hamer, (pictured) and discovered that rumours of Snack Time’s death have been greatly exaggerated…
- Snack Time shareholders have been asked to vote on a resolution to accept a further equity investment by Versatel Ltd., an existing shareholder.
Tanned, trim and confident, Snack-Time Chairman Jeremy Hamer looks anything but beleaguered. A lover of the country life, who spends as much time as possible in the great outdoors around his home in Dorset, it’s hardly surprising that, despite the squally wind and the leaden, threatening skies overhead, he’s waiting for me at a table outside Café Rouge at London’s Euston Station.
My first impression is of an erudite man with a boyish sense of humour: his opening gambit is to quote Walter Scott: ‘Not altogether unpleasant to us is the misfortune of our friends.’
He refers, of course, to those in the vending industry who have experienced a certain schadenfreude upon witnessing the difficulties of a competitor. Jeremy, metaphorically speaking, holds up his hands. ‘We are in a very competitive world’, he says, ‘and right now, hopefully for a very short time, we are in a difficult place.’
‘Snack Time has had a tough time ever since the acquisition of Vendia at the end of 2010’
So difficult, in fact, that on 30th September the Company’s shares were suspended from trading on AIM.
Jeremy can pinpoint the moment when things began to go wrong: ‘Snack Time has had a tough time ever since the acquisition of Vendia at the end of 2010’, he said. ‘The integration of the two businesses was handled very badly. When I got involved, some 18 months later, it was still in a real mess. Consequently, a lot of money was lost and a lot of borrowing resulted. Mistakes were made putting the businesses together that we’re dealing with to this day.’
On paper at the time, it looked like a marriage made in Heaven: Snack Time declared itself ‘pleased to announce the acquisition of the entire issued share capital of Vendia UK, for a maximum consideration of £10.98 million’, expecting the acquisition ‘to be earnings enhancing in the year ending 31 March 2012.’
Vendia UK’s core operation was a traditional vending business, specialising in the sale of hot beverages, which was seen as complementary to SnackTime’s confectionery and chilled drinks operations. Vendia traded as Simply Drinks in London, Integer in the Midlands, VMI in the north of England and Drinkmaster, a national table-top and in-cup specialist company, based in Plymouth.
What could possibly go wrong?
‘Now we’re trying to mend that balance sheet’, Jeremy said. ‘The announcement we made (regarding the share suspension) was covering off the various aspects of the mending process that’s going on. It hasn’t happened at the speed we’d have liked, because of our position as a Public Company and the regulatory aspects that come with that status. What we’re doing requires the blessing of the Takeover Panel and that’s what has held us up.’
Jeremy’s not prepared to dwell upon the ‘sensitive, private issue’ of exactly why the Takeover Panel process has been so laborious – at least, not until this difficult period has ended.
Today is about good news and the good news is that Jeremy believes ‘really good news’ is imminent. In fact on Friday 10th October, Snack Time sent a circular to its shareholders asking them to vote on a resolution to accept a further equity investment by Versatel Ltd., an existing shareholder.
The Russian investor will not, after all, be launching a takeover of Snack Time.
Although there are ‘I’s to dot and ‘T’s to cross, it appears the Russian investor will not, after all, be launching a takeover of Snack Time. Instead, the investor will have ‘a much bigger stake in Snack Time’. ‘They want us to remain a Public Company’, Jeremy said. ‘The investment will first and foremost strengthen the balance sheet, and resolve the issues we currently have with the bank. The Co-Op wants us to repay our loans faster than we can generate the profits to do so, although we have in fact repaid 590k in the last 15 months.’
It will surely come as a surprise to many in the industry that Snack Time’s EBITDA* profit was very nearly doubled in the year to 30 March 2014, ‘those numbers which everybody was saying were ‘a disaster’’, Jeremy said, with maybe a trace of exasperation. ‘We delivered £1.1m versus 600k in the previous year, a 74% improvement, so we’re not doing so badly. We’ve not been growing – and that is a challenge, we must begin to grow again – but, when you’ve no capital to invest, growth is very difficult.’
Debt has effectively prevented Snack Time from competing for the free-on-loan tenders, ‘where the real money is’. Similarly, the balance sheet has also forestalled Snack Time’s ability to invest in technology. The company has been, in Jeremy’s phrase, ‘in a difficult place’.
‘We’re optimistic that with this investment, we can return to the main stream, we can begin to grow again and what’s more, with an offering that really is very exciting, we will become a genuine competitor again.’
Jeremy’s optimism is not based solely on numbers: huge progress has been made operationally in the last couple of years in a number of areas. Clearly, he believes he has a team in place that is more than capable of delivering success. Mark Stone, formerly MD of Maas, has just arrived, a sure sign of ‘investing in the future’. Andrew Hardill, (developing the franchise network) and Paul Vickers (who’s almost clocked-up 14 years at Drinkmaster) are in place; Steve Hartland and Sue Sproston, both formerly of Bunzl Vending, are also in-situ. ‘It’s a great team with a very difficult balance sheet that we are on the brink of improving considerably’, Jeremy said.
The last piece in Jeremy’s jigsaw is, obviously, this investment. He’s so close to securing the deal that he can smell it…
**PART TWO OF PV’s EXCLUSIVE INTERVIEW WITH JEREMY HAMER IS HERE
