Photo-me paints hazy picture

Photo-Me has 20,000 booths

Photo-Me International (PMI), the photo booth operator, has reported a slide in profits.

It was hit by price competition, the fall in value of the Japanese yen and by customers delaying purchases while they waited for new digital processing equipment to come onto the market.

Photo-Me operates more than 20,000 photo booths worldwide, on sites including supermarkets, railways stations and amusement parks.

It also manufactures photo-processing equipment for customers such as Kodak.

But price competition has hit its business in the UK while the slide in Japan's economy has dented overseas profits.

Photo-Me admitted the results were "not good" but insisted there were "positive elements" and "encouraging signs of recovery".

Developing profits

In the six months to 31 October, PMI's profits fell from £8.2m to £1.3m.

Most of the fall came from its manufacturing division, where sales slowed as customers held off purchases as they awaited the new DKS 1500 model.

The payment of dividends will only be resumed once overall trading significantly improves and debt is further reduced

PMI

The group said it had now signed a deal with Kodak to start supplying the new machine, which can develop up to 1,500 prints an hour, later this month.

PMI's photo booth business came up against competition in the UK, where it lost a lucrative contract with Safeway.

The fall in value of Japan's Yen also meant a 10% slide in turnover from the country, where it operates 3,700 photo booths.

PMI said that without the Yen's slide, turnover would have been down just 3%.

Shares dip

Chief executive Serge Crasnianski said that despite the fall in profits, PMI had managed to generate substantial cash from its existing photo booths.

Net debt in the six months fell by £14.6m to £36.9m.

However, the company said no dividend would be paid in the near future.

"The payment of dividends will only be resumed once overall trading significantly improves and debt is further reduced," said Mr Crasnianski

Investors were unimpressed, with shares sliding 5% to 18p.