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Photo-Me ups full-year profit forecast

Say cheese! Photo-Me International has bought a pizza vending machine manufacturer and is changing its name
July 12, 2021
  • Photo-Me International shares up on profit upgrade
  • Company moves into profit for first half
IC TIP: Hold at 75p

Photo-Me International (PHTM) has upgraded its full-year sales and profit forecasts for the second time this year, to £200m and £21m-£24m respectively. 

Photo-Me’s primary passport photo division’s sales were flat year on year at £53m but its automated launderette business saw sales climb over a fifth in the six months ended 30 April, to £24m. This was off the back of the Revolution washing machines business, while it has pulled back from its B2B laundry operation. 

The company’s automate-everything focus was shown in the £3m acquisition of a pizza vending machine manufacturer. This French company – note it is not Italian – currently makes 40 machines a year and Photo-Me will ramp this up to 100 a year by the end of 2023. 

The UK and Ireland were weak spots for the company in the first half of 2021. Sales in continental Europe and Asia climbed 12 per cent and 13 per cent, respectively, while the UK and Ireland saw a fall of almost 30 per cent. 

Chief executive Serge Crasnianski said its main focus, ID photos, had proved a “sustainable market” but outlined an expansion plan in food, drink and clothes-washing machines. The company is also changing its name to ME Group to reflect the shift from purely selling and operating picture booths. 

Investors were pleased with the profit upgrade that came alongside Photo-Me’s interim results, sending the shares up more than 5 per cent. We had been sceptical of its recovery from pandemic conditions but the company has done well in the first half. While the appointment of Crasnianski's daughter as a director is a red flag, Photo-Me looks on a good path. Move to hold. 

Last IC View: Sell, 53p, 7 Jul 2020

PHOTO-ME INTERNATIONAL (PHTM)  
ORD PRICE:75pMARKET VALUE:£284m
TOUCH:74.7-76p12-MONTH HIGH:79.6pLOW: 41.7p
DIVIDEND YIELD:NAPE RATIO:39
NET ASSET VALUE:31.8pNET CASH:£7m
6 months to 30 AprTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
202091.5-24.2-5.64nil
202194.612.02.49nil
% change+3---
Ex-div:-   
Payment:-