Photo-Me International (PHTM) is trying to get its Japanese business back on the road to recovery. The company spent £1.2m during the first half of the financial year restructuring its photobooth operations there, moving machines to better locations or removing them entirely. Strip out restructuring costs and sales in Asia rose 14.5 per cent to £2.7m, but include it and this figure adjusted to a 3 per cent decline. Japan is expected to remain a "highly competitive" market, and the full restructuring bill is expected to be closer to £2m by the year-end. That said, the introduction of new low-cost machines should improve future profitability.
While the company's name might imply otherwise, the laundry machine business is actually the main driver of growth. The total number of laundry units increased by a fifth to 4,636, helping to boost sales by 26 per cent to £21.9m. An average of 50 new machines were installed each month, mainly across continental Europe. For now, the UK, Ireland, Portugal, France and Spain remain key territories for this division, although the group could expand into Germany and Austria.
Analysts at broker finnCap expect adjusted pre-tax profits of £46.1m during the year to April 2019, giving EPS of 9.5p, compared with £46.8m and 9.6p in FY2018.
| PHOTO-ME INTERNATIONAL (PHTM) | ||||
| ORD PRICE: | 94p | MARKET VALUE: | £357m | |
| TOUCH: | 94-95p | 12-MONTH HIGH: | 194p | LOW: 94p |
| DIVIDEND YIELD: | 8.9% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 35p* | NET CASH: | £32.4m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 122 | 32.9 | 6.43 | 3.71 |
| 2018 | 120 | 26.0 | 5.33 | 3.71 |
| % change | -2 | -21 | -17 | - |
| Ex-div: | 4 Apr | |||
| Payment: | 10 May | |||
| *Includes £31.8m of intangible assets, or 8p a share | ||||
