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It's a tough road ahead for Vending Technologies

Friday 19th December 2003

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Vending Technologies shareholders have had a rough year. First they received a profit warning in January that sent the share price plummeting. Then they were excluded from approval of a loan to the company, which resulted in VTL receiving an earbashing from the surveillance panel.

All told, the share price has halved its value since November last year and shareholders are still none the wiser to what's going on.

This week the company announced approval has been granted under the California Finance Lenders Law for a licence to act as a lender in the US market. "More good news from USA," the company trumpeted.

The market responded kindly, with the shares gaining nearly 10% after the announcement, but investors will still be looking for some better numbers to back that up.

Vending Technologies supplies and operates what it describes as "electronically enhanced" food and beverage vending machines. Net profit for the 15 months ended June was $3.3 million, down from the $5.4 million for the 12 months ended March 2002.

While the company's core business of licensing vending machines looks solid ­ more so given the latest announcement ­ revenue growth remains patchy.

Former chairman Richard Janes stepped down last month with Gary Stevens taking over until a new appointment is made. Well-known former dairyman Warren Larsen has also departed as a director, while the company has a new look and relatively inexperienced management team in place.

The board is bullish about future growth potential but it's a shame VTL has damaged its ability to raise further capital to fund its ambitions.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

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