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Lower tax aids Vending Tech profit

By Phil Boeyen, ShareChat Business News Editor

Wednesday 30th May 2001

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Lower than expected tax expenses have helped Vending Technologies (NZSE: VTL) to post a full-year profit 29% above prospectus forecasts.

For the year ended March the vending company recorded a tax-paid surplus of $4 million compared with a forecast of $3.1 million. The result was well up on last year's profit of $798,000.

Sales revenue more than trebled from $5.12 million to $16.25 million while the operating surplus before tax stood at $4.16 million, up from $1.1 million previously.

Despite the improved surplus, tax payments fell from $306,000 last year to just $138,000.

"The favourable after-tax result reflects benefits from utilising available grouping provisions to partly offset the tax expense forecast in the prospectus," the company says in a statement.

Chairman Richard Janes says it's very pleasing to have exceeded the first profit forecast.

"It clearly demonstrates the company's ability to achieve rapid and profitable growth, while the underlying commercial models established since listing make that growth sustainable."

Mr Janes says highlights for the year include marketing alliances with Cadbury's and Rio Beverages, which the company now plans to put in place in other markets.

He says the company has spent time in the past year enhancing internal systems, strengthening management and continuing to invest in research and development, and is now set for more growth.

"We have reached our current position organically, growing on the back of strong demand in NZ and Australia, and refining our business models and proving our ongoing revenue streams.

"Next-stage growth will come from the acquisition, primarily in Australia, of earning enhancing vending businesses capable of making an immediate positive contribution to cashflow.

"We will fit the machines we acquire with our electronics then convert the established territories to operate under our VendSmart programme."

Mr Janes says Australia is a growth vending market and the company has established sales teams in Melbourne and Brisbane

"The directors expect to achieve a further lift in both revenues and earnings over the next twelve months as the established base and accompanying revenue streams continue to expand.

"That gives the directors confidence that the company will meet its current earnings forecasts for the full year ending 31/03/2002."

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