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Photo-Me faces long Covid-19 rout

Even without a second wave, the photobooth, laundry and juice machine company says it will take three years to get back to pre-pandemic activity levels
July 7, 2020

Photo-Me International (PHTM) is facing a long road back from Covid-19. The photo booth, laundry and juice machine company's investors face at least a year without a dividend because of new debt, and it has said the recovery to pre-pandemic activity levels could take three years. 

IC TIP: Sell at 53p

On top of cutting the final and half-year dividends, Photo-Me has changed its financial year to end on 31 October to “allow sufficient time for the board and management to fully evaluate all Covid-19 impacts”, while also giving its auditor added time. This means the company has also reported earnings for the six months to 30 April, during which revenue dropped 16 per cent year on year. 

Photo-Me estimates Covid-19 knocked £17.7m off underlying pre-tax profit in March and April, and the pandemic also resulted in £23.7m of impairments. Its business is based on people using its machines while out and about, so the outbreak has been particularly devastating. 

The company borrowed €30m (£27m) in May and June, taking it into net debt territory from the net cash position at the end of April. It cannot pay dividends until the €30m loan is paid back in full. 

Even before the pandemic, Photo-Me was looking at how to shift its identification photo division, which has struggled since the UK government loosened passport photo rules. 

PHOTO-ME INTERNATIONAL (PHTM)  
ORD PRICE:53pMARKET VALUE:£200m
TOUCH:51-54p12-MONTH HIGH:108pLOW: 33p
DIVIDEND YIELD:NILPE RATIO:171
NET ASSET VALUE:30p*NET CASH:£7.9m**
Year to 30 AprTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201618440.17.85.86
201721548.09.37.03
201823050.210.68.44
201922842.68.38.44
20202154.10.3nil
% change-6-90-96-
Ex-div:na   
Payment:na   
*Includes intangible assets of £49.9m, or 13p a share, **Includes lease liabilities of £0.4m