Photo-Me International half-year revenue up, but moving away from attended photo printing

December 12, 2017 GaryPageau Photo-Me International

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2017

Solid first half as laundry remains primary growth accelerator

Photo-Me International plc (‘Photo-Me” or “the Group”), the instant service equipment group, announces its results for the six-month period ended 31 October 2017.

Results Highlights

	Reported			At constant currency
	Six months ended 31 Oct 2017	Six months ended 31 Oct 2016	Change	Six months ended 31 Oct 2016¹	Change¹
Revenue	£122.2 m	£110.6m	+10.5%	£113.4 m	+7.8%
EBITDA²	£44.9 m	£40.3m	+11.4%	£41.6 m	+7.9%
Profit Before Tax	£32.9 m	£31.0m	+6.1 %	£31.9 m	+3.1%
Net Cash³	£47.1 m	£68.0m	(30.7) %
EPS (diluted)	6.40p	5.84p	+9.6 %
Interim dividend per Ordinary share	3.71p	3.09p	+20.1 %

¹ For constant currency comparatives, average rates of exchange used were £/€ 1.13 (H1 2017: 1.20), £/Yen 145 (H1 2017: 139)

² Refer to the note 3 to the financial statements for the reconciliation of EBITDA to PBT

³ Refer to the note 8 to the financial statements for the reconciliation of Net Cash to Cash and cash equivalents as per the financial statements

Financial Highlights

· Revenue was up 10.5% to £122.2 million (up 7.8% at constant currency)

· Reported EBITDA was up 11.4% and EBITDA margin expanded to 36.7%, up 300bpts, including £2.3 million profit on the sale of property and £0.9 million one-off costs in relation to the UK retail estate

· Reported profit before tax was £32.9 million, up 6.1% (up 3.1% at constant currency)

· Net cash was £47.1 million, reflecting a total of £68.6 million in higher dividend payments (£34.6 million) and investments in future growth (£34.0 million) since 31 October 2016, up £7.9 million from £39.2 million at 30 April 2017

· Interim dividend increased by 20.1% to 3.71 pence per Ordinary share, in line with the stated progressive dividend policy

· Total laundry revenues up 75% to £17.3 million (H1 2017: £9.9 million)

Operational Highlights

Continued strong performance led by Continental Europe in all three key business areas: identification, laundry and printing kiosks.

Further progress in the deployment of ID security technology:

Continued rollout of encrypted passport photo ID upload technology in Ireland.
In the UK, positive conclusion of discussions with Her Majesty’s Passport Office and of the testing of the new online passport service; E-passport photobooths being rolled out across the UK, from mid December 2017.

Laundry remains the primary growth driver of the Group:

Manufacturing capacity increased in H2 2018 in support of growth target.
B2B services extended through acquisitions, with further opportunities under review

Action taken to boost profitability of UK digital printing business:

Photo-Me Retail operations being refocused to provide unattended digital printing kiosk activities, with the phased closure of manned retail outlets
This will result in a total one-off restructuring cost of £2.0 million in the current financial year, of which £0.9 million has been accounted for in the period ended 31 October 2017.

Continued investment in innovation for future growth focused on:

Complementary products and technologies with multiple applications, such as a banking front-end application for the Group’s booths.
Ongoing upgrade to support market leading position.

Commenting on the results, Serge Crasnianski, Chief Executive Officer, said:

“The Group has once again performed strongly, with good operational progress made against our strategy to diversify operations.

In the first half, further excellent progress was achieved in the deployment of laundry operations, a key growth driver for the Group. As a result, the Board anticipates that laundry revenue will become an increasing proportion of total Group revenue as we get closer to achieving our mid-term deployment targets.”