LONDON -- On the heels of cost-cutting measures and robust performance of its core business, Photo-Me International said its adjusted pretax profit rose 28% for the year ended April 30, 2011. The British photobooth maker and operator, which calls itself "the instant service equipment group," said it expects improved financial performance over the coming year.
For the year ended April 30, the company posted an adjusted pretax profit of £18 million ($28.9 million) compared with £14 million ($22.5 million) a year ago. Revenue fell 1% to £219.5 million ($352 million).
A 22.1% increase in adjusted operating profit was driven by strong performance in the operations division, which consists of photobooths, digital photo kiosks, photobook makers, amusements, kiddie rides and business-service equipment. These operations account for 80% of Photo-Me's total revenue.
Photo-Me said its adjusted EBITDA increased by 7.5% to £47.6 million. There was significant improvement in the net cash position to £40.7 million (including advance rental receipts of £8.2 million on an investment property). And the company announced an increase of 60% in the dividend to 2 pence per share.
"Operational improvement was due to a combination of a good performance in the key markets in our operations division as well as further efficiency gains from the recent restructuring plans," said John Lewis, Photo-Me's nonexecutive chairman.
The company said its photobooths, which are efficient and competitively priced providers of ID and fun photographs, represent a mature cash generative business. Over the year, Photo-Me said it increased the number of photobooth locations by almost 1,000, making for 22,400 total sites internationally.
(At year-end, the total number of Photo-Me vending machines sited worldwide was 43,700, compared with 43,850 in 2010. Photo-Me said the unit decrease was the result of a reduction in the number of its "low-cost amusement machines.")
Photo-Me said it plans to grow its photobooth business over the next year by "optimizing site coverage" and by introducing new products.
One promising product is described as a "designer booth," which supports social networking applications. Photo-Me partnered with Philippe Starck, the acclaimed French product designer, to create the new photobooth. Starck is best-known for his works in the "New Design" style. His work ranges from interiors to mass-produced consumer goods such as toothbrushes, chairs, houses and now coin-op machines.
Some 30 Starck photobooths have been installed in France. Photo-Me said it plans to place several hundred more throughout Europe over the next year.
Photo-Me has vending locations in more than a dozen countries, but they are concentrated in the UK, France and Japan. Expansion into China remained static last year, but it offers greatest opportunity for the international photobooth company in the future. Photo-Me is licensed to operate its equipment in Beijing.
The photobook maker is another opportunity Photo-Me is exploring. In late 2010, the company said it signed a memorandum of understanding with a major OEM for the distribution of its Photobook Builder.
The product is part of Photo-Me's Photobook suite, designed to be used in conjunction with a digital minilab. Photobook Builder scores, folds, glues, binds and trims product without any operator intervention, producing photobooks fully finished and ready for delivery to the patron.
Photo-Me said the memorandum of understanding contained a firm commitment from the OEM for the delivery of 1,000 machines by July 15. Over an 18-month period, Photo-Me said the manufacturer is targeting sales of 5,000 machines through its existing channels of distribution around the world.