News blog
Retec Digital
- BY: Andrew Hore |
- POSTED: 10/11/2008 |
Retail screen media provider Retec Digital is buying part of Consolidated Vending’s photo booth business.
Aim-quoted Consolidated Vending has been placed in administration. Retec has taken on the photo booth contract with Morrisons and paying £450,000 for it. The annual revenues from the contract were £1.8m.
Management believes that it will be able to use its own management and service engineers to operate the contract. Retec believes that it could be an opportunity to win additional business with Morrisons.
Retec is obtaining a £400,000 loan from Meadowside Leasing Ltd for one year and a £225,000 loan from Trafalgar Capital Specialised Investment Ltd secured on the new subsidiary and repayable in 24 months. The loans pay annual interest of 9%.
A further £125,000 has been raised in the form of convertible loan stock. Retec’s directors have subscribed for most of the loan stock. The interest rate is 8% a year and the loan is convertible at 2p a share - or the lowest price that the company has issued shares prior to conversion - up until 31 December 2009.
House broker Charles Stanley believes that Retec will be able to make a profit on the contract. It forecasts 2008-09 profits of £100,000 for Retec.
Retec shares fell 0.125p to 1.375p a share, which values the company at £2.26m.
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