LONDON (Alliance News) - Photo-Me International PLC Thursday reported a rise in pretax profit in its recently-ended financial year as it cut down on costs, although revenue was hit by a decline in minilab sales and the strength of sterling against the euro and yen.
The operator of photo booths and coin-operated laundries reported growth in pretax profit in the year ended April 30 to GBP38.5 million from GBP30.1 million the year before, but revenue dropped 5% to GBP177.2 million from GBP186.6 million.
Photo-Me said that revenue was hit by the continued decline in sales of its restructured minilab business, which provides instant photos, compounded by adverse exchange rates for currencies converted into sterling. Had exchange rates remained constant, revenue would have grown 0.9%, Photo-Me said.
Photo-Me, which also makes coin-operated washing machines, said the roll-out of its Revolution launderette remains on track with a strong order book, and said prospects for both this and the expansion of its photo-booth estate are "extremely positive". The company said it expects to have 6,000 units in operation in Europe by 2020 and is looking for opportunities in Asia and the USA.
"The strength of our cash flows is allowing us both to finance the capital expenditure programme of some GBP14 million per annum for the next two years and to raise returns to shareholders by way of dividends," it said.
Photo-Me said it will pay a dividend of 4.88 pence for the full year, up 30% from the 3.75p paid the year before, adding that it intends to increase the dividend by 10% each year and that any net cash on the balance sheet in excess of GBP50 million will be available to shareholders as a special dividend.
"Looking ahead, the group's treasury function keeps FX under continual review, although the continued strengthening of sterling against the euro and the yen, which may have an adverse effect in the coming year, remains a challenge. Importantly, however, the operational performance of the business remains very good. Subject to the risks and uncertainties detailed in the strategic report, the board anticipates another year of strong underlying progress," Non-Executive Chairman John Lewis said in a statement.
Shares in Photo-Me were trading down 2.3% at 133.30 pence Thursday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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