Friday 21st February 2003
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The 56% stake held by executive directors John Hotchin and Mervyn Doolan is now valued by the market at $11.7 million, $51 million less than in August 2001 when the shares traded at $3.75.
VTL joins a growing band of companies with bombed-out share prices following a profit warning. It is also not the world's greatest communicator and the related-party arrangements examined by the market surveillance panel last year showed its corporate governance needed attention too.
It warned on January 15 that its profit for the March 2003 year would be "significantly lower" than the $5.4 million it booked for 2002 but, nine months through the financial year, you'd think management could be a little more specific.
It blamed lower Australian machine placements and a slower-than-planned entry into the US, and notified an "adverse impact" from unrealised foreign exchange losses due to "the revaluation of long-term licence arrangements," whatever that might mean.
The surveillance panel gave VTL an earbashing for breaching listing rules by failing to get shareholder approval for a loan to the company by Doolan and Hotchin but acknowledged neither had benefited from the omission.
Meanwhile, the company's core business of licensing sophisticated vending machines looks solid enough. Revenue growth while patchy has been strong and it's a shame VTL has damaged its ability to raise further capital to fund its ambitions.
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