Photo-Me International announces interim results

After extraordinary expenses including the accelerated depreciation of photo booths, a £5.7 million charge for strategic review and restructuring costs, the company recorded a pre-tax profit of £1.6 million, resulting in a loss after taxes of £0.7 million due to non-tax deductable exceptional strategic review costs.

Sales of PMI’s Vending division, which comprises photobooths, digital media kiosks and other vending equipment, generated sales of £79.1 million (down 1 percent) with an operated profit of £10.9 million (down 21 percent). The number of photobooths installed worldwide decreased slightly to 21,300, while the number of digital media kiosks was unchanged at 4,500 units, with France being by far the principal territory with 2,800, followed by Switzerland with 400. Revenue from digital media kiosks increased by 5 percent to £6 million.

PMI’s Manufacturing division, comprising of the minilab company Kis/Photo-Me and the Swiss-based Imaging Solutions AG, a specialist for wholesale lab equipment, recorded sales of £28.1 million in the first half of the current fiscal year, 8 percent less than in the same period a year ago. While the number of minilabs sold by Kis/Photo-Me increased slightly, the average selling price decreased, reflecting competitive price pressures and a large order priced in US-$. Minilab revenue was down 5 percent to £19. million, resulting in a loss. Sales of the wholesale lab equipment company Imaging Solutions decreased by 19 percent to £7.5 million, translating into a profit which was substantially behind the 2006 comparative period. The reduction is mainly due to reduced unit sales of the company’s FastPrint machine and delays in the launch of new album making equipment, which also disadvantaged sales of the WidePrint machine. Since the Purus workflow for the production of photo books, calendars and other value-added products is now fully ready, PMI expects these products to have a significant impact on the result for the current year.

According to a press release, PMI has reviewed its estimates for the full year, which will end April 30, 2008. The Board now believes that the group is unlikely to be profitable in the second half, which is traditionally the weaker part of the year. The interim dividend maintained at 1.00 pence per share, reflecting the quantum of the group’s adjusted EBITDA and operating profit.