ME Group reports interim six month results; sales up 6%

ME Group International plc, the instant-service equipment group formerly known as Photo Me International,  announces its results for the six months ended 30 April 2024. The company reported revenue up 4.6% to £150.4 million, EBITDA¹ up 11.1% to £51.2 million, and profit before tax up 10.3% to £30.0 million, driven by growth in core laundry and photobooth operations, despite foreign currency rate impacts. Revenue was up 8.6% excluding the impact of foreign currency rate changes.

The company cited strong performance from Wash.ME laundry operations, which is the fastest-growing business area and a key growth driver for the Group, with revenue up 16.7% to £44.1 million.  Revolution laundry units in operation grew by 18.0% and represented 12.4% of total Group vending estate, driven by strong demand and record machine installations of 420 Revolution machines in H1.

The number of Photo.ME machines increased by 12.6% to 30,708 (H1 2023: 27,275). Photo.ME vending revenue was up 2.4% to £85.9 million (up 7.5% excluding FX impact), reflecting quieter volumes in Q1 followed by a strong performance from Q2 to June 2024 with increased activity across almost all territories, particularly Continental Europe and Asia Pacific. ME Group plans to roll out more next-generation multi-service photobooth, with plans to install 2,000 to 2,500 machines by the end of FY 2024. (Vending revenue is revenue earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue.)

“We are pleased to report positive trading momentum throughout H1 2024, which has continued into H2 2024, and reflects further strategic progress from the Group’s core automated photobooth and laundry operations which are both exceptionally profitable and highly cash-generative,” said Serge Crasnianski, CEO & Deputy Chairman. “The Group continues to focus on profitability, returns and cash generation, with these metrics being the key performance indicators for the Group. The Group is on track to deliver another record year across these financial metrics, including the number of machines deployed.

“Through our continued focus on R&D and technological innovation, the Group remains focused on prudently exploring new and exciting opportunities within the automated self-service instant machine category to further diversify our portfolio, including the planned launch of new machines offering a broader range of services for our consumers.

“Additionally, the Group’s R&D team has devised new production techniques to reduce the cost of the next-generation photobooths by 28% (effective immediately) and the Revolution laundry machine by 13% (effective FY 2025). A new generation solar panel, which delivers twice the power generation of the current model, is also in development and will be utilized by the Group’s Revolution machines.”

Key financials

¹   EBITDA is profit before depreciation, amortization, non-operating income/expense, and finance cost and income.

²   Net cash excludes investments in convertible bonds (£3.7 million) and lease liabilities (£10.6 million). In November 2023, £1.0 million of the convertible bonds were converted to equity (see note 10 for details). Refer to note 12 for the reconciliation of net cash to cash and cash equivalents per the financial statements

³. Percentage change excluding the Impact from foreign exchange rates (“FX impact”) during H1 2024, particularly the Japanese yen which saw a 15% decrease in value against pound sterling (average rate of exchange used in H1 2024 was Yen/£ 187.64 vs H1 2023: 163.16), and a 2.2% decrease in the euro against pound Sterling (average rate of exchange used in H1 2024 was €/£ 1.138 vs H1 2023: 1.163).