30th May 2018 14:03
LONDON (Alliance News) - Photo-Me International PLC said Wednesday that pretax profit for year to April-end will be "broadly in line with market expectations", but earnings for the new 2019 financial year will be below market views amid restructuring of the Japanese unit.
Shares in the photo booth operator were down 24% at 114.58 pence each on Wednesday afternoon.
For 2018 financial year, the company expects to achieve turnover growth of around 6% versus the prior year period, on a constant currency basis. It also will record a one-off investment gain of GBP3.7 million relating to its shareholding in Max Sight Group Holdings Ltd. Net cash at year-end is expected to total GBP26 million, down from GBP39.2 million year on year as a result of restructuring and acquisition costs.
For the year ending April 2019, the company expects its pretax profit to be GBP44 million - falling below market expectations while the company restructures its Japanese subsidiary.
Photo-Me has decided to restructure its Japanese unit due to increased competition following the launch of the Japanese government's My Number ID card programme. The restructuring is expected to boost profitability in 2019 financial year and beyond.
The company's photo identification business has underperformed in Japan due to oversupply in the market but has been more successful in the UK, France, and Ireland.
Adjusted pretax profit for 2019 financial year is likely to be similar to 2018 financial year, excluding a one-off investment gain and proceeds from the sale of the the company's head office buildings.
The company intends to "maintain [its] existing dividend policy" for 2018 financial year, although no final decision has been made. Photo-Me paid a total dividend of 7.03 pence per share in the year to April 2017, up 20% from 5.86 pence the year before.
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