Interim Management Statement

08 March 2013

Photo-Me International plc

Interim Management Statement

Trading in line with expectations - confident outlook

Photo-Me ("Photo-Me" or "the Group"), the instant service equipment group, is today issuing its Interim Management Statement, which covers the period from 1 November 2012 to date.

While the Group's third quarter from November to January is traditionally the slowest quarter of the year because of seasonal trading patterns, it is pleasing to report that profitability overall has been substantially better than for the same period last year, and in the year to date the Group has made strong progress despite a currency headwind. The divisional comments below refer to the first nine months of the year to 31 January 2013 at constant exchange rates.

Revenue in the Operations' division has been at a very similar level to the same period last year, but profitability has moved ahead strongly, helped by exceptional performances in Japan and Germany. Costs have again been well controlled at a central level, but more importantly, savings resulting from lower costs in manufacturing are progressively feeding through. In addition, at the end of January 2013, the project to move Continental Europe onto a single logistics platform was completed and it is expected that this will generate significant additional savings in stock, space and personnel in the next financial year and beyond. 

The roll-out of the Starck-designed photobooths is gathering momentum, and the booths are delivering the expected improvement in returns. Importantly, the first newly-designed laundry machines - now branded 'Revolution' - have begun to be delivered, and underwrite the plans for a rapid expansion of the estate.

The Group is trialling a number of other new products as well as focusing on gradually expanding its footprint into new territories and will further update the market on progress in these areas at the time of the final results.

The downsized Sales and Servicing division has again suffered a decline in turnover but is no longer loss-making, due to the continued restructuring programme and change in management structure.

Cash generation remains very strong and the Group underlined its commitment to return cash to shareholders by the announcement on 4 February 2013 of a special dividend of 3 pence per share, amounting to £11 million, which is being paid today.

Movements in exchange rates have adversely affected profits before tax by approximately 8% for the nine-month period ended 31 January 2013. Despite this, the Board continues to anticipate that the Group will achieve market expectations for the current year and believes that the Group is strongly placed for the future.

Notes for editors:

Photo-Me (www.photo-me.co.uk) has two main activities: Operations and Sales & Servicing

Operations comprises the operation of unattended vending equipment, in particular photobooths, digital photo kiosks, photobook makers, amusement machines, business service equipment and laundry machines. With 24,300 sited worldwide, Photo-Me is the world's leading operator of photobooths.

Sales and Servicing comprises the development, manufacture, sale and after-sale servicing of this Operations equipment and a range of photo-processing equipment and album maker solutions.