LONDON -- The UK's top financial regulator hit Photo-Me International with a £500,000 fine on June 21 for failing to disclose inside information to the market as soon as possible, creating a "false market" in shares for 44 days. The Financial Services Authority said it was the largest fine of its kind.
The FSA said that on Jan. 17, 2007, Photo-Me knew it was no longer in exclusive talks for a contract for minilabs from U.S. retail chain Albertsons, and by Feb. 12 knew that its January forecast was 40% behind budget. But the photobooth company failed to issue a profit warning until March 2, 2007, the FSA said, sparking a 24% one-day decline.
Photo-Me stated: "The company maintains that the FSA has underestimated the real-time difficulties faced by the company in updating the market on the possible outcome of the relevant complex contractual negotiations. Whilst the company is disappointed with the quantum of the penalty, it welcomes the fact that the FSA has not found that any directors or previous directors were at fault."
Separately, Photo-Me said it expects to beat market expectations for pretax profit, currently around £10.5 million, by at least 20%. The final figures, which will be announced July 7, remain subject to final group audit review.
Photo-Me operates and services photobooths, digital printing kiosks, business equipment and kiddie rides in some 42,900 vending locations in 15 countries, primarily in the UK, France and Japan. Photobooth operations, the larger part of Photo-Me's activities, consist of 21,000 sited machines. The company, which also manufactures photobooths and kiddie rides, has been listed on the London Stock Exchange since 1962.