Back in May, Photo-Me International (PHTM) warned that pre-tax profit would miss expectations for the full year, reflecting a challenging market backdrop in Japan, where a surge in the number of photo booths dented unit profitability. Ergo, underlying profit before tax at £46.8m was flat on FY2017, and down 1.6 per cent at constant currencies.
The Japanese business is now undergoing a restructuring, which will include an overhaul of regional management and the relocation of machines with low sales. Analysts at Canaccord Genuity expect this will cost around £3m this year, with Japan returning to sales growth in 2020. Chief financial officer Stéphane Gibon said the company could consider buying competitors in the Japanese market to drive consolidation/scale benefits.
The laundry business continues to be the biggest source of growth, with sales up 69 per cent on the previous year to £36.7m. This division now represents around 16 per cent of group sales, up from 10 per cent last year, with a 36.9 per cent increase in the number of units in operation to 4,449, and it is on track to hit 6,000 units by 2020.
Analysts at Canaccord Genuity expect pre-tax profit of £47m in the year to April 2019, giving EPS of 9.6p, compared with £46.8m and 9.7p in FY2018.
| PHOTO-ME INTERNATIONAL (PHTM) | ||||
| ORD PRICE: | 117p | MARKET VALUE: | £442m | |
| TOUCH: | 116.8-117.2p | 12-MONTH HIGH: | 194p | LOW: 101p |
| DIVIDEND YIELD: | 7.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 38p* | NET CASH: | £26.7m | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 187 | 30.1 | 5.8 | 3.75 |
| 2015 | 177 | 38.5 | 7.5 | 4.88 |
| 2016 | 184 | 40.1 | 7.8 | 5.86 |
| 2017 | 215 | 48.0 | 9.3 | 7.03 |
| 2018 | 230 | 50.2 | 10.6 | 8.44 |
| % change | +7 | +4 | +14 | +20 |
| Ex-div: | 18 Oct | |||
| Payment: | 9 Nov | |||
| *Includes intangible assets of £107m, or 28p a share | ||||
