PHTM.L Regulatory News (PHTM)

19 Sep 2007 07:01

Photo-Me International PLC19 September 2007 Wednesday 19 September 2007 PHOTO-ME INTERNATIONAL PLC Strategic Review/Interim Management Statement PMI (PHTM.L), the digital imaging company, announces that it is to retain itsVending Division. PMI also reports its first Interim Management Statement, whichcovers the period from 1 May to 19 September 2007, as required by the UK ListingAuthority's Disclosure and Transparency Rules. Update on Strategic ReviewSince November 2006, the Board and its advisers have been examining options forPMI's three principal businesses - vending, minilab manufacturing and wholesalelab manufacturing - and ways of restructuring the Group so as to permit asignificant return of capital to shareholders. As part of this process, theBoard has been seeking to dispose of the Vending Division. Last month, followingreceipt of indicative offers, the Board concluded that there was a sufficientlevel of interest for the Vending Division disposal process to move to its nextphase. As these indicative offers have not translated into firm offers at anacceptable level, in part reflecting turbulence in the debt markets, the Boardhas now decided to terminate the Vending Division disposal process. The PMI Board continues to believe that the Vending Division possessesconsiderable fundamental strengths, in particular leading positions in keyterritories, technical expertise, an attractive market, and a cash generativefinancial profile. The Vending Division has a track record of delivering asubstantial annual EBITDA. The Board, under its new leadership, continues to examine other elements of theStrategic Review process and a further update to the market will be given in duecourse. In the period, a further £3.8m of shares were purchased by the Company to add tothe £1.1m in the period from 30 March to 30 April 2007. Update on Commercial PerformanceThe first quarter of the year, covering the period from 1 May to 31 July, ishistorically one of the two quietest quarters, contributing insubstantially toannual profit. The most important months tend to be September/October (forvending) and March/April (for minilab manufacturing). In the quarter, vending revenue was marginally down in local currency terms inall three principal territories: the UK & Ireland, France and Japan; in Sterlingterms, the Japanese decrease was more substantial. Minilab manufacturing revenuedecreased, whilst wholesale lab manufacturing revenue was down as a result of adepressed market and the introduction of a rival technology into the market.Overall, on a like-for-like basis (disregarding the Deith Group, whose disposalwas completed in April 2007), revenue was 7% below the previous year actual.Whilst vending in the UK & Ireland has to contend with the triple challenges ofa weak retail market place, high site owner commissions and the unsettlingeffect on both the business and staff of recent actual and scheduled Boardresignations, with the related publicity, the outlook for the Group remainssubstantially as set out in PMI's Preliminary Announcement of 2 July 2007. Theprospects for PMI's minilab manufacturing business will benefit from therecently announced contract with the largest retail pharmacy in the USA, for theexclusive supply of minilabs for the third successive year. During the period, there was no material change to the Group's financialposition. As usual, the Board proposes to provide an update on trading and outlook at theCompany's AGM, which this year will be held on 17 October 2007. Update on Corporate GovernanceIt was a period of further progress, with considerable change to the Board.Amongst the executive Directors, Riccardo Costi and Francois Giuntini left theBoard (but not the Group) in July, whilst on 3 September it was announced thatSerge Crasnianski would step down as Chief Executive Officer and as a Directorby 30 November 2007, following a smooth transition to his successor. Amongst thenon-executive Directors, Roger Partington and David Young were appointed in May.In July, Francis Wahl resigned and Dan David announced his resignation witheffect from the earlier of the conclusion of the Strategic Review or 31 December2007. On 3 September, Vernon Sankey resigned as Chairman and a Director, withDavid Young being elected by the Board to be its Chairman in the interim. If the Chairman is excluded, one-half of the Directors - Roger Partington,Martin Reavley and Hugo Swire - are Independent Directors. The recruitment of a successor Chief Executive Officer, involving a recruitmentcompany and overseen by a Committee of the Board chaired by Roger Partington, iswell underway. Defining the future strategy for the Vending Division will be akey priority for the new Chief Executive Officer. Legal Disclaimer: This announcement contains statements that are or may be forward-lookingstatements with respect to the financial condition, operations and businessesof PMI. All statements other than statements of historical facts included inthis announcement may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertaintiesand other factors which may cause the actual performance or achievements ofPMI, or industry results, to be materially different from any performance or achievements expressed or implied by such forward-looking statements. Theseforward-looking statements are based on numerous assumptions regarding thepresent and future business strategies of PMI and the environment in which itwill operate in the future which are not necessarily indicative of futureoutcomes or the financial performance of PMI and should not be considered inisolation. Enquiries: Photo-Me International plc 01372-455 591 David Young (Chairman)Serge Crasnianski (CEO)Jean-Luc Peurois (Finance Director) Bankside Consultants Charles Ponsonby 020-7367 8851 Tulchan CommunicationsDavid Allchurch 07771-937 173 This information is provided by RNS The company news service from the London Stock Exchange