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It's been a challenging year for photo-booth operator Photo-Me. Difficult trading conditions led to a management overhaul early in the year, and the new team implemented a strategic and operational review that led to a major restructuring of the group.
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Reported losses ballooned as a result of one-off charges of £14.8m - including redundancy costs of £3.2m and £4.3m spent on 'professional' costs associated with the review process itself - and the accelerated depreciation of some booths, which cost it a further £5m.
Perhaps the most important result of the review, though, was the decision to halt the disposal of Photo-Me's core vending business, which grew revenues by 4 per cent over the year. New chief executive Thierry Barel warned that the trend towards the centralisation of biometric data and digital images may constrain demand for passport photography, but management is looking to incoporate other digital media such as music and mobile office services into kiosks alongside traditional photo printing.
Broker Hardman & Co are yet to release any update on its 2009 EPS forecast of 0.9p.
PHOTO-ME (PHTM) |
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|---|---|---|---|---|
| ORD PRICE: | 12p | MARKET VALUE: | £42m | |
| TOUCH: | 11.75-12p | 12-MONTH HIGH: | 81p | LOW: 10p |
| DIVIDEND YIELD: | na | PE RATIO: | na | |
| NET ASSET VALUE: | 21p | NET DEBT: | 59% | |
| Year to 30 April | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 237 | 33.9 | 6.18 | 2.00 |
| 2006 | 225 | 28.0 | 5.53 | 2.40 |
| 2007 | 213 | 15.7 | 2.78 | 2.40 |
| 2008 | 210 | -21.7 | -5.32 | 0.00 |
| % change | -1 | -238 | -291 | -100 |
Ex-div: na Payment: na *Includes intangible assets of £30.5m, or 8p per share |
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Photo-me is in a difficult place. The growth of digital photography means its main business is in long-term decline, and shares have already fallen by 25 per cent since our sell advice (Sell, 16p, 3 April, 2008), which we stand by. Sell.
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-IC-2.1.3g-prod - 17/03/2010 18:13:09 - ben.wheeler
