Photo-Me International (PHTM) may soon have to change its name to Photo & Wash-Me if its laundry units take off as it expects. The company, famous historically for its self-service photo booths, has big ambitions in self-service launderettes. It currently has 380 laundry units but plans to have an installed base of 2,000 by end-2015, with France and Belgium the initial target markets. These growth ambitions are underpinned by a shift to lower cost and higher capacity production in Hungary, from France currently.
Manufacturing of photo booths, meanwhile, is being shifted to China. A move that management says will help drive the cost of manufacturing a photo booth in 2014 down to about 40 per cent of the cost of one produced in early 2013. That means Photo-Me can turn its sights on new markets, such as China itself, where there are plans to have about 600 machines installed by end-2014 and 1,200 by end-2015.
Worldwide, the company currently has 25,485 photo booths and a good chunk of the cash that they throw off will find its way to shareholders' pockets - with 20 per cent per year dividend growth promised for the next two financial years and scope for further special dividends.
Broker finnCap expects adjusted full-year pre-tax profit of £29m, giving adjusted EPS of 5.7p (from £24.3m/4.8p in 2013).
PHOTO-ME INTERNATIONAL (PHTM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 147p | MARKET VALUE: | £546m | |
| TOUCH: | 147-147.25p | 12-MONTH HIGH: | 148p | LOW: 54p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 27p | NET CASH: | £67.8m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 107 | 20.0 | 3.94 | 1.50 |
| 2013 | 101 | 23.0 | 4.31 | 1.80 |
| % change | -6 | +15 | +9 | +20 |
Ex-div: 26 Mar Payment: 6 May | ||||
