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Photo-Me's First-Half Profit Rises, Despite Lower Revenues; Begins Placing Coin Laundry Machines Next To Photobooths

Posted On: 12/11/2012

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TAGS: Photo-Me International, vending, photo booth, kiddie rides, coin laundry, automatic laundry equipment, Photo-Me first half, Photo-Me profit, John Lewis, Photo-Me Starck photo booth

LONDON -- Photo-Me International Plc (PHTM.L) reported in December that profit for its first half, ended Oct. 31, 2012, increased over last year, reflecting lower costs and expenses. The photobooth company's board recommended a higher interim dividend.

Photo-Me nonexecutive chairman John Lewis said, "The group has again traded well in what is traditionally its stronger half and delivered a record result, despite a currency headwind. A growing estate, tighter management and lower costs have all contributed to this with notable improvements in Germany, Switzerland and Japan, and another very good performance in our largest market, France."

The manufacturer and operator of instant-service equipment, which includes automatic photobooths and children's rides, said it is introducing coin-operated laundry machines, which are expected to have "substantial potential."

In the first half, the company's profit before taxes increased to £20.02 million ($32.1 million) from £17.05 million ($27.3 million) in the previous year. On a per share basis, earnings were 3.93 pence, higher than 3.23 pence a share reported last year.

Meanwhile, revenues for the period declined 7.1% to £107.39 million ($172 million). At constant currency, revenue decreased 2.1%.

Cost of sales decreased to £79.15 million ($127 million) from £89.4 million ($144 million) last year and administrative expenses were £8.69 million ($13 million), lower than £9.83 million ($16 million) in the preceding year.

Photo-Me's board recommended an interim dividend of 1.5p a share, up 20% from last year, to shareholders of record on April 2, 2013, payable on May 7.

"We continued to generate significant levels of cash in the period and the net cash position at the end of October was £70 million ($112 million), an increase of £18 million ($28 million) since the end of April. We are therefore increasing the interim dividend by 20% and, during the second half of the year, the board will be considering the options for returning some of this cash to shareholders," Lewis said.

Photo-Me's operations business is global, and it's active in 15 industrialized countries. However, 85% of sites are located in three territories: the UK & Ireland, France and Japan. By area, Continental Europe accounted for 19,856 (2011: 19,045) sites; the UK and Ireland for 14,323 (2011: 15,761); and Asia for 8,981 (2011: 8,778).

photo booth, vending machine, Photo-Me, Starck photo booth Photobooths for identification and entertainment still represent the most profit for Photo-Me's operations division, and France is the most important photo market. Over the half-year, the number of photobooth sites increased by 1,285, or 5.6%, to 24,300 internationally. Over half of this increase was in Europe, which has been led by expansion in the German market and the rollout of the newer Starck-designed booths (pictured here), which are showing a 50%-higher turnover than older models. There are currently 630 Starck booths in the marketplace and Photo-Me anticipates that number to increase substantially in the year ahead.

There was nearly a 4% increase in Asian units during the period and this, combined with the introduction of newer booths with enhanced photo quality, contributed to a strong performance in Japan.

The photobooth market is long established, but Photo-Me still believes there are opportunities for growth, particularly in new countries. It launched its first machine in Malaysia in December and is testing in Thailand and the Ukraine. Photo-Me also believes there are opportunities to acquire small businesses for development in other countries, and is examining Turkey and Poland.

For its new automated laundry business, Photo-Me International is looking at installing machines and dryers alongside its photobooths at supermarkets after "successful" trials in Europe. The Surrey-based group is "aggressively" rolling out laundry machines in France and Belgium after nearly three years of trials and testing in these countries. It is doing market research in the UK and said it would decide whether to launch laundry machines across Britain early in the new year.

Photo-Me said its laundry machines have proven popular with consumers on the continent, as they handle very large loads -- such as duvets and bedding -- to be washed and dried while they do their weekly shopping.

At up to 8 euros ($10.35) for the largest load, plus an extra 1 euro ($1.30) to dry, the service is cheaper than most dry cleaning services, according to Photo-Me.

It aims to have 3,000 machines in operation by the end of 2015, having already installed more than 180 in France and Belgium, with 160 sold and the remaining 23 operated by the group.


Profit Rises At Photo-Me International; Photobooth Installations Climb To 23,500 (June 2012)