Vending machine firm seeks investors

By DANIEL RIORDAN

An Auckland company making vending machines that do everything but talk will list on the Stock Exchange next month.

The Business Herald understands that Vending Technologies (VTL, formerly Remote Technology Systems) is set to raise $7.5 million to pay for aggressive growth in the Australasian market.

The undertaking will capitalise the company at $29.5 million.

Executive director John Hotchin and finance director Mervyn Doolan founded the company in 1998.

Mr Hotchin's background includes marketing and IT consulting. General manager Rob Seymour previously worked for Bluebird Foods' vending operations.

VTL machines, which are worth between $3000 and $15,000 and stock 22 to 40 product lines, offer hot and cold food, drinks, snack food and ice creams, using what their New Zealand developers claim is a world-leading software system.

That technology allows the head office to know exactly how much of each product is being sold each day from each machine.

It also allows machine operators to advertise specials for certain times of the day, to immediately identify when a machine is broken and why, and to know when products are being pilfered.

One of the big advantages of the instant-knowledge technology is the savings in service costs that result.

The company buys products for its machines directly from the manufacturers.

This month, VTL signed a $A6.5 million deal to supply vending machines to 350 construction sites worked by the Australian Construction, Forestry, Mining and Energy Union.

It operates 400 machines in Australasia and is putting a further 150 into the market each month, two-thirds into Australia.

The company has bullish growth plans, aiming to have more than 2100 machines in Australasia by March and 4700 machines under management the following year.

Debt free, VTL posted a net profit of $714,000 in the year to March on revenue of $5 million and is understood to be aiming for a profit of more than $4 million on revenue of $12.4 million for the current year.

The company's shareholders are Mr Hotchin (45 per cent), Mr Doolan (45 per cent) and the family trusts of financial planners Roger Moses and Gary Stevens, each with 5 per cent.

Post-offer, these investors' shareholdings will fall, respectively, to 33.2 per cent, 33.2 per cent, 4.05 per cent and 4.05 per cent.

Investors who subscribe to the offer will own the remaining 25.5 per cent.

VTL's chairman is Richard Janes, chairman of Wools NZ and former head of the Game Industry Board.

The other board members are Mr Doolan, Mr Hotchin and Elizabeth Coutts, an Air New Zealand director and former chief executive of Carters and Caxton Group.

The Business Herald understands a prospectus will be registered within two weeks and a listing made towards the end of next month.

Craig & Co is the organising broker and there will be no public pool.