Photo-Me announces six-month results

Photo-Me International plc, the instant-service equipment group, announces its results for the six months ended 30 April 2022. Revenue was up 21.9% to £115.3 million (H1 2021: £94.6 million), resulting mostly from the continued easing of Covid-19-related restrictions across the group’s key operating markets and the subsequent positive impact of increased demand for passports and other official documentation, the company reported. Reported profit before tax increased by 65.8% to £19.9 million (H1 2021: 12.0 million)

 

 

	Reported
	Six months ended 30 April 2022	Six months ended 30 April 2021	Change
Revenue	£115.3m	£94.6m	21.9%
EBITDA (excluding associates)1	£40.2m	£28.7m	40.1%
Reported profit before tax	£19.9m	£12.0m	65.8%
Adjusted profit before tax2	£16.0m	£12.9m	24.0%
Profit after tax	£16.4m	£9.4m	74.5%
Cash generated from operations	£29.8m	£22.4m	33.0%
Gross Cash	£96.8m	£95.3m	1.6%
Net cash	£43.2m	£16.9m	155.6%
Earnings per share (diluted)	4.35p	2.49p	N/A
Interim dividend per Ordinary share	2.6p	nil	N/A
Special dividend per Ordinary share	6.5p	nil	N/A

 

 

Photobooth business saw a stronger than anticipated recovery as travel and social restrictions were eased. Revenue was up 27.4% which is a testament to the resilience of the photobooth market

Laundry division operations continued to perform well with total laundry revenue (Revolution laundry operations and sale of machines) up 8.4% to £25.9 million

Expansion of Revolution laundry operations continued and revenue was up 37.5% to £25.3 million. The total number of Revolution units in operation grew by 15.9%

Continued focus on new product innovation and diversification of operations to meet ever-changing consumer needs, with new products launched and technology partnerships announced

ME Group corporate brand rolled out across the majority of operations – plan to change listed entity name shortly, to align to the new corporate brand strategy and reflect broader based concession offer.

“We are proud to announce an extremely strong first half performance, ahead of the Board’s expectations,” said Serge Crasnianski, CEO and Deputy Chairman. “Demand for our machines continues to grow at pace, as economies reopen and confidence returns among consumers globally, and we are working hard to keep up with evolving trends and consumer needs.

“We look forward to maintaining this strong growth as we celebrate our 60th year as a listed company, investing strongly in innovation and rapidly upgrading to the next generations of our machines across all business areas, including photobooths, laundry, and food vending. The opportunities for the Group and our consumers are endless, supported by our ME Group corporate brand which better reflects our strategic diversification. Our plans to change the listed entity name later this year will be an important start to the next chapter of our growth story.

“We are also very pleased to reward our loyal shareholders with a special dividend this year as a result of the company’s strong cash position, particularly after the freeze on dividends during the worst of the pandemic. This along with our progressive dividend policy reflects the Board’s optimism for the future.

“We are grateful to all our partners and our employees who have helped us throughout the challenges posed by Covid-19. The Board believes that the Group’s ability to come through the pandemic in such good shape and increase its profitability is testimony to the strong fundamentals of the Group and its resilience in the face of adverse economic headwinds.”

The company added its continuing adoption of the new corporate brand, ME Group, which is a trademark and trading name of Photo-Me International plc. The group plans to change its listed entity name, to align to the new corporate brand strategy, in autumn 2022. The proposed name change reflects the transition of the company from one that has historically been viewed as a consumer product and services company, predominantly based around the ownership of photobooths, into a broader-based infrastructure company targeting multiple revenue streams.

Breakout of the Photo.ME – Photobooths and integrated biometric identification solutions

	Six months ended 30 April 2022	Six months ended 30 April 2021	Change
Number of units in operation	27,617	28,095	(1.7)%
% of total Group vending estate (units)	63.7%	62.9%	1.3%
Total revenue	£66.9m	£52.5m	27.4%
Capex	£1.4m	£3.3m	(57.6)%
EBITDA	£23.5m

Having been severely impacted by the pandemic, as restrictions were eased and consumers were able to travel and socialize again, the company said it saw strong Photo ID demand for passports and other official documentation, as well as other products delivered via our photobooth estate. This was particularly the case in France, and also in the United Kingomd despite the government’s acceptance of home-taken photos for official documents. In Asia, activity levels were still curtailed by some restrictions during the period.

The company said, in the United Kingdom, Photo ME successfully mitigated the decline in revenue experienced due to the introduction of home-taken ID photos “through the implementation of various marketing initiatives, machine maintenance, and the removal of unprofitable machines. As a result, average revenue and visits per machine have increased by 22% and 58% respectively when compared with pre-pandemic levels (in 2019). In addition, our partnership with Her Majesty’s Passport Office (‘HMPO’) and our secure digital upload technology direct to the UK Government server via our photobooths avoids verification delays that can otherwise be experienced when using self-taken photos.

During Q2 2022, the company reviewed the end-user pricing of photobooths and the cost per use was increased by 33% from €6 to €8. This change in price has not impacted consumer demand to date.

The average revenue per machine (excluding VAT) was £4,941 per year. EBITDA was 35.1% of the revenue during the period (six-month). Due to seasonality, this performance is expected to be higher in the second half of the financial year (31 October 2022). As a consequence of the above, revenue grew by 27.4% to £66.9 million (H1 2021: £52.5 million) representing 58% of Group revenue. EBITDA was £23.5 million, contributing 63.9% of Group EBITDA (excluding the property sale).

New product development

Photo-Me said the digital transformation of both the photobooth and print kiosk businesses was a priority for the group, evolving from a hardware- to cloud-based architecture. The company’s face ID anti-spoofing technology was recognized as compliant under international Biometrics Presentation Attack Detection standards (ISO/IEC 30107-3) by the French biometrics and security technologies experts at Cabinet Louis Reynaud Labs (“CLR Labs”).

The company also added it is developing entertainment functions within photobooths to meet the needs of the younger generation, including social media and sharing functions. Photo-Me acquired VIP Box, the French leader in selfie station event rentals, in April 2022. In addition, the company says it is developing multiservice photobooths and kiosks to integrate the consumer journey into specific omnichannel automated services. They plan to deploy or exchange next-generation photobooths starting from H1 2023 for the three next years, up to a total of 10,000 machines.