PHTM.L Regulatory News (PHTM)

06 March 2014

Photo-Me International plc

Interim Management Statement

Encouraging trading performance - confident outlook

Photo-Me ("Photo-Me" or "the Group"), the instant service equipment group, is today issuing its Interim Management Statement, which covers the period from 1 November 2013 to date.

While the Group's third quarter from November to January is traditionally the slowest quarter of the year because of seasonal trading patterns, it is pleasing to report that overall profitability in this three-month period has been over 80% higher in sterling terms (100% at constant exchange rates) than for the same three-month period last year. In the first nine months of the year to date, the Group has made strong progress with a PBT of around 20% more than that for the corresponding nine-month period last year.

The divisional comments below refer to the first nine months of the year to 31 January 2014 at constant exchange rates.

Revenue in the Operations division was marginally ahead of the same period last year, but profitability has again shown a strong improvement, as a result of a good performance in France and a very strong performance in Japan, alongside the benefit of lower manufacturing costs. 

As expected, our Sales and Servicing division again had lower turnover, with its activities now at a much lower level following an extensive period of restructuring. However, the division's costs have been dramatically reduced and it is no longer loss-making helped by profits from sales of our laundry units.

Revolution laundry units

At the end of the third quarter, while the bulk of the operating units are in France, exposure to Belgium is steadily increasing and the first units have now been installed in Holland, Germany, Ireland and England.

Encouragingly, for the nine months period as a whole, the average monthly machine turnover in France was 10% higher than the same period last year as familiarity with the product increases and as units are progressively stationed at larger supermarkets.

As announced on 14 February 2014, the manufacturing relocation to Hungary has now been completed successfully and the Group anticipates increased volumes and substantially lower costs going forward.

Cash generation within the Group remains very strong and the Group underlined its commitment to return excess capital to shareholders by the announcement on 14 February 2014 of a special dividend of 2 pence per share, amounting to £7.5million, payable on 15 May 2014. Meanwhile, the Group is continuing to increase its investment in the laundry product to ensure its roll-out plans are achieved as soon as possible.

The Board believes that the Group is strongly placed to benefit from the future growth in its laundry business and in its newer photobooth markets. As a result of the performance in the year to date the Board at this stage anticipates that the Group's PBT will exceed market expectations for the current year by at least £1million. Further, if the performance in the third quarter of the year continues through the final quarter, and there is no significant adverse movement in the exchange rates, the Group would expect to improve on this outcome.

The Group expects to issue a pre-close update at the end of May.

Notes for editors:

The principal activity of Photo-Me (www.photo-me.co.uk) is the ownership and operation of unattended vending equipment. This comprises photobooths, laundry machines, digital printing kiosks, amusement machines and business service equipment. With over 25,000 sited in Europe and Asia, Photo-Me is the world's leading operator of photobooths.

Photo-Me also has a business responsible for the development, manufacture, sale and after-sale servicing of this Operations equipment and a range of photo-processing equipment, including photobook makers, kiosks and minilabs, together with the servicing of third-party equipment.