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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Cartucho | LSE:CTGP | London | Ordinary Share | GB00B0R2GC21 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.75 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:4684G Cartucho Group Ltd 20 July 2006 Press Release 20 July 2006 Cartucho Group Limited ("Cartucho" or "the Company") Trading Update On 11 May 2006, the Company announced that it had installed 116 kiosks under its contract with its major customer in the US. As at 16th July 2006, the number of kiosks installed and generating revenues stood at 284 kiosks, with the Company's manufacturing facility capable of producing up to 50 kiosks per week. The announcement on 11 May 2006 referred to the Company's major customer experiencing differing refill rates across its stores. Since that time, kiosks in some 25 stores have produced average refill rates of 12 cartridges a day for prolonged periods, and four have achieved average refill rates of 15 cartridges a day for prolonged periods, meeting or exceeding Director's expectations. In particular, the Directors are encouraged by the fact that kiosks in stores that have been the focus of marketing initiatives have performed better. It has become apparent, however, that advertising campaigns and marketing initiatives undertaken by the Company's major customer have not kept pace with the speed of the roll-out programme, with overall average refill rates remaining below expectations. In recognition of this, the Company and its major customer have agreed to install 540 kiosks by mid-September 2006 and then reduce significantly the speed of the remainder of the roll-out in order to enable the marketing effort and sales initiatives of the Company and its major customer to catch up. The ink refill kiosk remains a key component of the Company's major customer's strategy and the Company has been provided with details of initiatives that have been and are being put in place, including more aggressive and dynamic pricing and in-store marketing. All parties remain committed to completion of the full roll-out of the balance of the kiosks and the Company is looking forward to recommencing higher levels of kiosk deployment and installation once the average refill rates of the installed kiosks reach an acceptable level over a reasonable period. The Directors believe that a clear focus on achieving strong performance from the 540 machines will provide long term benefits for the Company. In addition, this approach will avoid any working capital issues for the Company. As at 30 June 2006, the Company's cash balances stood at over #2,000,000 and the measures put in place, together with the Company's #500,000 overdraft facility with Bank of Scotland mean that the Directors believe the Company to have sufficient working capital to achieve its current objectives. The precise timing of completion of the balance of the roll-out cannot be predicted, however, and the Directors expect the slow down in the roll-out to result in the Company's profits for this year and next year to be adversely affected. Following the change to the refill pricing policy adopted by the Company's major customer, the Company has renegotiated the revenue share model with the Company's major customer. The Company will receive a percentage of the refill price, rather than the previous arrangement of a fixed fee regardless of the price of the refill. Given the forecast refill rates discussed with the Company's major customer, the Directors expect this to have a beneficial effect on the Company. The Company's ink refill kiosk continues to attract significant interest from US retailers and the Company has completed initial deployments of 10 kiosks each in two major US chains in the drug store and mass grocery sectors on a revenue share basis. The Company has also sold a further four kiosks making a total of five deployed in a major U.K. supermarket chain, and two kiosks in a major French retailer. The Company is also addressing potential opportunities with resellers and distributors in the U.S. and other territories. Whilst the Directors have been disappointed that average refill rates have been below expectations, the manufacturing and support infrastructure of the Company are well established, with the Company having proper structures in place and adequate cash resources. The Directors are delighted with the effort and commitment being shown by the Company's major customer and believe that the proposed focus on 540 machines will produce positive results and endorse the Company's business model. The expected increase in refill rates and opportunities that exist for the Company, mean that the Directors view the future with confidence. - Ends - For further information: Cartucho Group Limited Mike Willcocks, Chief Executive mikewillcocks@cartucho.com Media enquiries: Abchurch Heather Salmond / Franziska Bohnke Tel: +44 (0) 207398 7700 heather.salmond@abchurch-group.com www.abchurch-group.com This information is provided by RNS The company news service from the London Stock Exchange END TSTDKLFFQDBEBBV
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