Photo-Me looks to restructure U.K. operations

Photo-Me International plc announced an update on the group’s trading for the 12 months ended 30 April 2020 and its cash position. The COVID-19 pandemic severely impacted all the Photo-Me International plc end markets, and “the majority of expected Group revenue in March and April did not materialize,” the company said.

Total Group revenue is now expected to be 5.5% lower than in the previous 12 months to 30 April 2019. Profit before tax for the 12 months ended 30 April 2020 (including the provision of £14 million to £18 million) is now expected to be in the range of £10 million to £14 million.

The board steps to date include reducing capital expenditure; utilizing governmental support schemes available to the group, such as furloughing employees through job retention schemes, deferring repayment of loans and withdrawal of the interim dividend payment to shareholders. All members of the board will take a voluntary 20% reduction in salary, from 1 July 2020 to at least the end of December 2020, and bonus payments for all management are being reviewed.

Nevertheless, the group has decided to include write-downs of £14 million to £18 million, which mainly relates to the impairment of goodwill and write-down of the carrying value of non-profitable machines due to the COVID-19 situation. This also includes a provision for the anticipated cost of a major reorganization of Photo-Me’s United Kingdom business, which has experienced a significant loss in identification revenue, due to reduced consumer activity. The government’s policy to accept photos taken at home for passport identification has taken a significant part of Photo-Me’s market share for ID photos, the company said. As a result, the company plans to restructure its United Kingdom, as well as operations in China and South Korea.  

The company added the on-going travel bans reduced demand for photo IDs vis photobooths.