TIDMPHTM
RNS Number : 9918H
Photo-Me International PLC
09 December 2020
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
9 December 2020
Photo-Me International plc
("Photo-Me" or "the Group")
Trading Update
Photo-Me International plc (PHTM.L), the instant-service
equipment group, announces an update on the Group's trading and
cash position.
Trading Update
Since publication of the Group's results on 7 July 2020, trading
across all of the Group's end markets and business areas has
continued to be severely impacted by the COVID-19 pandemic as a
result of significantly lower consumer demand for its vending
equipment and services.
The Group's instant-service machines are typically situated in
busy locations, such as travel hubs and shopping centres. Ongoing
government lockdown restrictions, constraints on international
travel, and social distancing rules across its jurisdictions have
significantly impacted consumer activity, most notably for
photobooths (-26% from 1 May to 31 October 2020 compared to last
year same period) and more deeply for children's rides, which
represented only 1.2% of total Group revenue during the same
six-month period.
The Group saw a slight return of consumer activity as
countrywide and regional lockdowns were eased across Europe in the
summer. However, since then the increase in infection rates
resulted in new national and local government lockdown measures
being implemented, and revenue has once again been significantly
impacted. Nevertheless, Revolution laundry machines remain
resilient with average revenue down only -2% compared with the same
period last year.
Consequently, total Group revenue for the six months ended 31
October 2020 is expected to be 26% lower than in the six months
ended 31 October 2019.
Profit before tax for FY20 (18 months to 31 October 2020),
excluding IFRS16 impact, is expected to be approximately GBP0.5
million, taking account of the previously announced GBP23.7 million
impact from exceptional items, provisions and impairment in the 12
months ended 30 April 2020, and a second impact of approximately
GBP7 million in the six months ended 31 October 2020 . The Group
was cash flow positive in the period.
As a result of the difficult operating environment, the Group
utilised government furlough schemes where available and may seek
to continue to use the schemes as necessary in the future.
Diversification of the Group's product offering has remained a
key priority for the Board during this time. The expansion of the
Group's Laundry operations has continued, with 203 Revolution
machines being installed between May to October 2020. In addition,
new professional apple and pineapple juice machines have been
developed and are undergoing market testing with promising results
in a number of locations across France and Belgium.
Update on restructuring programmes
The Group has made good progress with its previously announced
restructuring programmes to remove unprofitable machines across the
UK, China and South Korea, and is adapting to a lower consumer
activity environment. These machines are predominately photobooths
and children's rides which will be decommissioned, refurbished or
relocated to other countries or sold to third parties, depending on
the age and condition of the machine.
The Group now expects to remove approximately 3,000 photobooths
in the UK, 700 units in China and 200 units in South Korea. In
Continental Europe (mainly France, the Netherlands and Spain), the
Group plans to remove 1,000 machines. Together, these programmes
will reduce the number of photobooths in operation by around 17%,
successfully streamlining the business and aligning its vending
estate to expected lower consumer activity in the short to medium
term.
Update on funding and liquidity
As at 31 October 2020, the Group had a net cash balance of GBP22
million.
The Group continues to comply with its banking covenants, with
the exception of a breach of the covenant relating to the loan from
BNP Paribas ("BNP") owing to the impacts caused by the COVID-19
pandemic. However, BNP has confirmed that this covenant has been
waived owing to the exceptional circumstances that gave rise to it.
Photo-Me and BNP have agreed in principle to amend the existing
gross cash to debt covenant, to give Photo-Me more flexibility in
the current environment. Subject to agreeing the amended terms, the
Group does not expect to breach this covenant going forward.
In the light of the second wave of COVID-19 and further lockdown
measures, the Board's scenario planning indicates that the Group
has sufficient liquidity to navigate this uncertain period
following the amendment of the Group's BNP loan facility as
described above .
Governance
The Group announces, in accordance with Listing Rule 9.6.11
that, Jean-Marc Janailhac will step down as a member of the
Remuneration Committee and Audit Committee with immediate effect.
Mr. Janailhac was appointed an Executive Director of Photo-Me on 17
July 2020, having served as a Non-executive Director since July
2019. He chairs the Strategic Committee whose members include the
top five managers of the Group and the CEO.
Following this change, members of the Audit Committee and
Remuneration Committee are set out below:
Audit Committee
- Jean-Marcel Denis, Non-executive Director (Committee Chairman)
- Sir John Lewis OBE, Non-executive Chairman
- Emmanuel Olympitis, Non-executive Director
- Francoise Coutaz-Replan, Non-executive Director
- Yitzhak Apeloig, Non-executive Director
Remuneration Committee
- Emmanuel Olympitis, Non-executive Director (Committee Chairman)
- Sir John Lewis OBE, Non-executive Chairman
- Jean-Marcel Denis, Non-executive Director
Membership of the Nomination Committee remains as follows:
- Sir John Lewis OBE (Committee Chairman)
- Emmanuel Olympitis, Non-executive Director
- Jean-Marcel Denis, Non-executive Director
Looking forward
The Board has acted, and continues to act, to mitigate the
impact of the current trading environment on the business and to
preserve cash. The COVID-19 situation is being closely monitored as
government lockdown measures across the Group's operating
jurisdictions change. The Board will continue to closely review its
vending estate in light of the continuing uncertainty and assess
the need for further restructuring measures and will seek to take
action as required.
Due to the second wave of COVID-19 and its possible long-term
global effects on the economy and social interactions, the Board
has very limited visibility on how the market will be in 2021.
Nevertheless, subject to the above, the Board estimates and has
budgeted for revenue of GBP175 million in FY21 (12 months to 31
October 2021), and estimates profit before tax will be GBP9 million
before any exceptional items, and also estimates that the Group
will be cash flow positive. Even in a downside scenario, the Board
believes that the Group's existing financial resources will be
sufficient for the Group to withstand the uncertain economic
conditions which are currently expected in 2021.
As announced in March 2020, the Board extended the Group's
financial year end by six months to 31 October 2020. The Group will
publish its results for the 18 months ended 31 October 2020 in
February 2021.
ENQUIRIES
Photo-Me International plc +44 (0) 1372 453 399
Serge Crasnianski, CEO
Stéphane Gibon, CFO
Hudson Sandler +44 (0) 20 7796 4133
Wendy Baker/ Emily Dillon/ Nick Moore photo-me@hudsonsandler.com
NOTES TO EDITORS
Photo-Me International plc (LSE: PHTM) operates, sells and
services a wide range of instant-service vending equipment,
primarily aimed at the consumer market.
The Group operates vending units across 18 countries and its
technological innovation is focused on three principal areas:
-- Identification: photobooths and integrated biometric identification solutions
-- Laundry: unattended laundry services, launderettes, B2B services
-- Kiosks: high-quality digital printing
The Group entered the self-service fresh fruit juice equipment
market in April 2019, with the acquisition of Sempa. T his will
become a key business area ('KIS Food') alongside Identification,
Laundry and Kiosks, and will be a significant part of the Group's
future growth strategy.
In addition, the Group operates vending equipment such as
children's rides, amusement machines and business service
equipment.
Whilst the Group both sells and services this equipment, the
vast majority of units are operated and maintained by Photo-Me.
Photo-Me pays the site owner a commission based on turnover, which
varies depending on the country and location of the machine.
The Group has built long-term relationships with major site
owners and its equipment is generally sited in prime locations in
areas of high footfall such as supermarkets, shopping malls
(indoors and outdoors) and public transport venues. The equipment
is maintained and serviced by an established network of 700 field
engineers.
The Company's shares have been listed on the London Stock
Exchange since 1962.
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