Statement re FSA penalty

PHOTO-ME INTERNATIONAL PLC

Response to FSA penalty

Photo-Me International plc (the "Company") notes the announcement by the Financial Services Authority ("FSA") that it has imposed a penalty of £500,000 on it for contravention of Disclosure and Transparency Rules 2.2.1 R and Listing Principle 4 during the period from 17 January 2007 to 2 March 2007. 

Whilst the Company is disappointed with the quantum of the penalty it welcomes the fact that the FSA has not found that any Directors or previous Directors were at fault in this matter. 

The Company maintains that the FSA has underestimated the real-time difficulties faced by the Company in updating the market on the possible outcome of the relevant complex contractual negotiations. However, the Board has decided it is not in the best interests of shareholders to incur further legal costs (none of which would be recoverable even if the Company was successful) and expend considerable executive time in pursuing its appeal before the Upper Tribunal (Tax and Chancery Chamber).

The Company provided for an expense in this connection of £500,000 in its financial statements for the year to 30 April 2009 and for legal costs billed to that date. The result for the year to 30 April 2010 will only reflect additional legal costs, which are not material.

Ends