Self-service photobooth and laundry vendor Photo-Me International (PHTM) appears to be turning the corner. Sure, on a currency adjusted basis, group turnover at the half-year stage rose just 0.9 per cent year-on-year - but that's better than the steady sales declines seen in recent years.
Significantly, management has scaled back the minilab business, which provides photographic developing and printing systems, and which has been a consistent drag on growth. Instead the focus has shifted towards the photobooth kiosks and, most notably, the Revolution laundry operation. Indeed, the photobooth estate grew over 5 per cent year-on-year, while expansion at the laundry side has been even more impressive.
Laundry still only generates 3 per cent of group turnover, but the number of retained operating units - typically located in supermarkets - grew from 172 a year ago to 374. There was an especially encouraging performance in France and Belgium, where established units saw takings rise over a fifth, while the Portuguese laundry side now generates 19 per cent of Photo-Me's revenue in that country. Still, finance director Françoise Coutaz-Replan said UK expansion had stalled due to an inability to reach agreement with supermarkets over pricing: Photo-Me's standard commission is 15 per cent.
Broker FinnCap expects adjusted pre-tax profit of £35m, giving EPS of 6.7p (from £30.1m and 5.7p in 2014).
PHOTO-ME INTERNATIONAL (PHTM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 146p | MARKET VALUE: | £543m | |
| TOUCH: | 145-146p | 12-MONTH HIGH: | 150p | LOW: 110p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 27p* | NET CASH: | £64.7m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 101 | 23.0 | 4.31 | 1.8 |
| 2014 | 96.4 | 28.8 | 5.51 | 2.34 |
| % change | -5 | +25 | +28 | +30 |
Ex-div: 2 Apr Payment: 14 May *Includes intangible assets of £15.1m, or 4p per share | ||||
