COVID-19 impacts Photo-Me International passport photo business

Photo-Me International plc, the instant-service equipment group, announced delayed results for the 18 months and 12 months ended 31 October 2020. The company reported revenue for the 18-month period was £310.2 million. For the 12-month period reported revenue was £186.3 million, 19.7% lower than in the previous 12-month period to 31 October 2019, reflecting the impact of the pandemic on consumer activity. After tax losses were £(2.4) million for the 18-month period, and £(24.9) million for the 12-month period ending Oct. 31, 2020. This is compared to a £33.6 million profit for the 12 months prior to Oct. 31, 2019. The company’s three principal business areas are Identification, Laundry, and Kiosks, as well as a growing network of food vending machines.

Identification was significantly impacted by the pandemic and ongoing challenging market conditions, especially in the UK, due to home-taken photos being accepted for official documents such as passports, with revenue down 26.3%. As a result, Identification revenue in the UK and Republic of Ireland reduced by 52.4%, and the number of photobooths declined by 1,367 units.

Kiosks – Digital printing services 

	18 months to 31 October 2020	12 months to 31 October 2020	12 months to 31 October 2019	12 months to 30 April 2019
Number of units in operation	5,304	5,304	5,508	5,487
Percentage of total Group vending estate (number of units)	11.9%	11.9%	12.0%	11.7%
Revenue	£18.4m	£11.4m	£13.7m	£13.3m
Capex	£2.5m	£1.4m	£1.6m	£2.3m

 Photo-Me’s key markets for digital photo printing kiosks are  France, the United Kingdom, and Switzerland. The number of kiosks in operation was 5,304, compared with 5,508 in October 2019, and represented 11.9% of the group’s total vending fleet.

The company said, prior to the pandemic, the kiosks business performed well, driven by a strong performance in France with revenue in the country up 6.5% year-on-year in the 12 months to April 2020. But, in the 12-month period, kiosk revenue fell 17.5%. Between February and October 2020, revenue was down 24.0% due to significantly lower demand due to pandemic lockdown restrictions in the period.

Identification segment: Photobooths and integrated biometric identification solutions

	18 months to 31 October 2020	12 months to 31 October 2020	12 months to 31 October 2019	12 months to 30 April 2019
Number of units in operation	27,189	27,189	28,439	28,873
Percentage of total Group vending estate (number of units)	61.0%	61.0%	61.0%	61.5%
Revenue	£183.4m	£106.9m	£145.1m	£147.7m
Capex	£11.1m	£5.7m	£11.2m	£9.7m

Photo-Me photobooth offerings have diversified to include encrypted photo ID upload technology connected to government organizations in the United Kingdom, France, Ireland, and the Netherlands.

The company said the UK government’s policy to accept photos taken at home for official documents and passport identification resulted in lower consumer demand and significantly eroded part of Photo-Me’s market share for ID photos. Notably, European regulation does not permit this method, and management said it hopes, at some stage, official documents in the UK will once again need to conform to ICAO and ISO rules. 

As of Oct 31 2020, 27,189 photobooths were in operation, a reduction of -5.8% compared with April 30, 2019, and -4.4% compared with  Oct. 31 2019.

At 31 October 2020, Identification accounted for 61.0% of vending units in operation. The number of photobooths has declined mainly in UK and Ireland (1,367 units), but also slightly in Asia (253 units) and Europe (64 units).

“2020 was a challenging year for the Group,” said Serge Crasnianski, CEO and Deputy Chairman. “At the onset of the pandemic, we acted quickly to mitigate its impact of COVID-19 on our business, including by preserving cash, whilst doing all we could to protect the wellbeing of our colleagues, customers and the wider community.  

“Despite this, the Group continued to make strategic progress and further expanded Laundry operations in key target markets in Europe. Our self-service Revolution laundry operations proved to be more resilient than other business areas, in part due to the accessibility of these site locations during lockdowns.”

Crasnianski added the group will continue to expand its laundry and food sector business, which they believe will compensate for the weakness in the ID and other segments.

The Photo-Me management team says it continues to see longer-term opportunities in the Identification market outside Europe (in countries where self-taken ID photos are not permitted), particularly for the deployment of its Identification security technology. But ongoing travel restrictions have reduced demand for photobooths and the company does not see a return to pre-COVID-19 levels anytime soon.