Vending company moves to bed down acquisition

Duncan Bridgeman

Friday 23rd January 2004

Vending Technologies signalled yesterday it would have its franchise model installed in Europe within two months after buying failed Belgian company New Distribution Systems.

The Auckland-based company bought NDS out of voluntary liquidation late last year for $1.4 million.

The acquisition is designed to spearhead VTL's move into the estimated $28 billion European vending market.

Vending Technologies director John Hotchin said the franchise system used in New Zealand was a key part of gaining an edge in the competitive global market.

"That's where we will be judged.

"We are moving quickly to overlay our franchise model over there."

NDS makes shipping-container-sized automated convenience stores called Shop24.

It has more than 160 stores installed in seven European countries and 20 in the US.

VTL plans to franchise out about a third of those stores, with two-thirds staying with big retailers and in busy areas such as airports and hospitals.

VTL also plans to implement its own software, which can monitor the performance of each machine or a group of machines anywhere in the world.

The company will also sell its own 24seven franchises through the existing NDS infrastructure.

"The NDS business is a lot different from what we do now but we understand the fundamentals of it and, more importantly, our database software can plug into the back of their machines."

Hotchin said the immediate plan was to ensure a revenue stream, which meant re-costing the existing machines and striking maintenance contracts.

"Basically, we've set ourselves up so that we've got the technical side very well geared but the sale side geared right down."

VTL has already cut NDS staff numbers to 22, down from more than 70.

Each Shop24 store costs E90,000 and offers 200 different product groups, ranging from soft drinks to toiletries.

Each has the potential to turn over profit of E45,000.

VTL shares have gained 30c to $1.30 since the acquisition on Christmas Eve

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