Photo-Me ("Photo-Me" or "the Group"), the instant service equipment group, has issued its latest trading update, covering the third quarter from 1 November 2014 to 31 January 2015.
The Group is very encouraged by the performance of both its core photobooth business and its growing laundry business in the third quarter and in the year to date.
Profit before tax (PBT) in the third quarter was 12% higher than the same period last year on a reported basis, and 19% higher if considered at constant currencies. Turnover for the quarter at constant currency rose 3%.
The roll-out of the Group's laundry product - branded Revolution - continues to progress well. At the end of January, a total of 898 units have been deployed since launch.
The gradual planned expansion of manufacturing capacity for the laundry business is progressing with a second manufacturing line operating in Hungary since mid-January 2015. The Group expects to achieve deployment of its 1000th unit during March 2015 and remains on track to deploy approximately 2,000 units by the end of 2015.
The results from the units in operation in France and Belgium (81% of the total units in operation to date) remain extremely encouraging and on the French machines which have been in operation for more than a year, the year-on-year increase in turnover in the most recent quarter was 21%.
Two of the Group's newer markets are Ireland and Portugal, and to date, both countries are delivering very strong results. A total of 45 machines are now in operation in Ireland and Portugal. The units in Ireland are currently delivering the highest average monthly revenue per machine of any country with a number of units providing extremely good payback. The machines are well located - many are on multi-facility petrol stations close to campsites - demonstrating the attractiveness of the product. In the year to date, laundry revenues have grown to represent 12% of the turnover in Ireland. In Portugal, which only began trading in May 2014, laundry revenues are also continuing to grow rapidly to represent 21% of total Portuguese revenues in the latest quarter.
New product pipeline
The Group continues to develop its photobooth portfolio and is trialing 25 new Starck booths which incorporate the 3D figurine photobooth and currently has plans to launch this concept in the second half of 2015.
The Group continues to trial its carwash concept at 5 sites and already has strong interest from at least one supermarket chain in France. Early results have been encouraging and Photo-Me remains optimistic that the concept can be rolled out, but will report further on its plans when it reports its preliminary results in June.
The Group intends to launch its new generation and extremely modern Starck-designed digital kiosk later in 2015 and is optimistic that the new machines will be well received by the marketplace.
The Group continues to perform well, with excellent cash generation. In addition, the Group has a very strong balance sheet, which is enabling Photo-Me to rapidly develop its estate of highly profitable machines.
Despite the further strengthening of sterling against both the euro and the yen, the Group remains confident of delivering results at least in line with expectations for the year as a whole and reiterates its commitment to an increase of 30% in the total dividend for the current financial year.
The Group continues to view the future with great confidence based on the strong performance of the current portfolio supported by the planned roll out of new units and its growing pipeline of new products.