6th Mar 2014 08:28
LONDON (Alliance News) - Photo-Me International PLC Thursday said its profits in the third quarter and first nine months of the financial year were well ahead of the year-earlier periods, driven by lower manufacturing costs, a good performance in France and a very strong performance in Japan.
It said it current expects its pretax profit for the whole year to beat current market expectations by at least GBP1 million, and by even more if the third-quarter performance continues through the fourth quarter and there are no more adverse currency moves.
The provider of photobooths, laundry machines, digital printing kiosks, amusement machines and business service equipment said its pretax profit is about 20% up on the year for the first nine months of the year, while its fiscal third-quarter "profitability" is up about 80%, or 100% at constant currency rates.
It said overall revenues were marginally up in the nine month period, but the strong performances in France and Japan and the lower costs had driven up profits.
It added that its sales and servicing unit again reported lower revenues, but the recent restructuring of the business and profits from sales of laundry machines means its no longer loss making.
Photo-Me is currently rolling out its Revolution laundry machines. Most of the machines are currently in France, but it said exposure to Belgium is steadily increasing and the first machines have now been installed in Holland, Germany, Ireland, and England.
"Encouragingly, for the nine months period as a whole, the average monthly machine turnover in France was 10% higher than the same period last year as familiarity with the product increases and as units are progressively stationed at larger supermarkets," the company said in a statement.
The company has managed to cut its manufacturing costs by shifting production to Hungary. The move was completed last month and Photo-Me expects higher volumes and substantially lower costs going forward.
Last month, Photo-Me's board approved the return of about GBP7.5 million to its shareholders through a two pence a share special dividend, after it found itself sitting on a GBP67.8 million cash pile at the end of October.
In its statement Thursday, the company said cash generation remains very strong, and this is helping it to invest in the laundry machine roll-out so it is achieved as soon as possible.
Analysts are currently expecting Photo-Me to report a pretax profit of GBP28.50 million for the year to end April, up from GBP24.3 million a year earlier.
Photo-Me shares were up 9.2% at 152.90 pence early Thursday, one of the biggest rises on the London market.
By Steve McGrath; [email protected]; @stevemcgrath1
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