Photo-Me confident amid 'stronger than ever' demand

Photo booth and instant vending operator Photo-Me International said in an update on Tuesday that it had performed “above expectations” in the first half of its financial year.

The London-listed company said group revenue for the six months ended 30 April was up 24.2% year-on-year, with a consequential positive impact on profitability.

Net cash at the period end totalled £41.4m.

Photo-Me said that, as Covid-19-related restrictions continued to be eased across its key operating markets and consumers became more confident in their ability to travel and socialise, demand for its services was “stronger than ever”.

Trading had now returned to pre-pandemic levels across all markets bar Asia, the board reported.

“Our photobooth business remains an important part of the group's long-term growth strategy and we continue to invest in upgrading the estate with our innovative next generation machines,” the directors said in their statement.

“We saw a significant increase in revenues driven by our photobooths in the period, particularly in France and the UK, as we benefited from pent-up demand for passports, other official documentation and all other products delivered by our photobooths.

“In Asia, where some restrictions remain in place, trading continues to be more subdued, but the board is confident that Japan will pick back up when restrictions ease, as has been the case so successfully in Europe, which bodes well for the coming months.”

The group said it was making “strong progress” against its growth strategy, underpinned by the rollout of its new corporate brand strategy, ‘ME Group’.

It said that was strengthening the brand proposition and better reflecting its recent diversification and investment in innovation.

“This includes our continued emphasis on growing our laundry division, which continues to perform and develop strongly.

“We installed 53 machines per month throughout the period, with further significant international growth expected in the laundry division in the coming months and years.

“Furthermore, in order to expand the laundry range and better position ourselves in the market, we recently launched a new low-cost laundry machine, the ‘Flex’, and have already successfully carried out several installations across Europe.”

Early trading results from that had been “extremely positive”, the board said, and so it was aiming to further deploy the new product “rapidly” across the continent in order to take advantage of the strong market opportunity.

“Meanwhile, the board continues to see that the food business, including the new pizza vending offer, is proving very attractive and represents a great future development opportunity.”

Looking ahead, Photo-Me said its strong start to 2022 was “particularly pleasing” against a backdrop of economic and consumer uncertainty, of which it remained aware and continued to monitor closely.

“In keeping with most businesses around the world, the group has had to face a significant increase in supply chain and raw material costs.

“However, its strong position in the markets in which it operates gives the group significant pricing power.

“The board therefore believes that the Group's performance for the year ending 31 October will show revenue up at least 20% over 2021 and adjusted profit before tax in the range of £47m to £50m, assuming that Covid-19 or other social restrictions are not re-imposed in our key markets.”

Photo-Me said it would publish its interim results for the six months ended 30 April in mid-July.

At 1044 BST, shares in Photo-Me International were up 9.76% at 77.49p.

Reporting by Josh White at Sharecast.com.