TIDMMEGP
RNS Number : 7127F
ME Group International PLC
12 July 2023
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as
amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310.Upon the publication of this announcement,
this inside information is now considered to be in the public
domain.
12 July 2023
ME GROUP INTERNATIONAL PLC
("ME Group" or "the Group" or "the Company")
Interim Results for the six months ended 30 April 2023
Strong first-half performance across all business areas,
underpinned by consumer demand and diversification of services
ME Group International plc (LSE: MEGP), the instant-service
equipment group, announces its results for the six months ended 30
April 2023 (the "Period").
KEY FINANCIALS Reported
Six months ended Six months ended
30 April 2023 30 April 2022 Change
---------------------------------------- -------
Revenue GBP143.8m GBP115.3m +24.7%
EBITDA (1) GBP46.1m GBP40.2m +14.7%
Profit before tax GBP27.2m GBP19.9m +36.7%
Profit after tax GBP20.4m GBP16.4m +24.4%
Cash generated from operations GBP36.8m GBP29.8m +23.5%
Gross cash (2) GBP113.1m GBP95.8m +18.1%
Net cash (2) GBP24.4m GBP42.2m -42.1%
Earnings per share (diluted) 5.34p 4.35p +22.8%
Dividends:
- Interim Dividend per ordinary share 2.97p 2.60p
- Special Dividend per ordinary share - 6.50p
---------------------------------------- ----------------- ----------------- -------
Total dividend per ordinary share 2.97p 9.10p -67.4%
(1) EBITDA is profit before depreciation, amortisation, other
net gains and finance cost and income.
(2) Refer to note 9 for the reconciliation of net cash to cash
and cash equivalents per the financial statements. The comparative
figures for net cash, and gross cash, have been restated by GBP(1)
million to reflect a change in accounting policy which reclassified
certain restricted deposits from cash to debtors. This ensures
comparability with the current period balances.
H1 HIGHLIGHTS
-- Strong financial performance, with revenue up 24.7% and
profit before tax up 36.7%, driven by progress across all of the
Group's key business areas - photobooth, laundry and digital
printing services - and in all of its 19 operating markets.
-- Photo.ME revenue was up 25.4% to GBP83.9 million, driven by
demand for photo ID and increased activity across all territories,
particularly Continental Europe and Asia Pacific.
-- Wash.ME revenue was up 37.0% to GBP37.8 million which was
reflected in the growth of the Group's laundry estate - a key focus
of investment. Revolution laundry units in operation grew 15.8% and
represented 11.5% of total group vending estate - the Group
installed new machines at a rate of 50-60 per month in the
Period.
-- Print.ME revenue up 11.5% at 5.8 million with 183 new kiosks
were deployed in France during the Period.
-- Food.ME revenue contribution was 4.5% of Group revenue, up
106.5% to GBP6.4m (H1 2022: GBP3.1 million) .
OUTLOOK
-- Continued focus on the Group's five-year growth strategy to
support the development of each principal business area, including
M&A activity where the Group has an active pipeline of
opportunities, to drive sustainable revenue and profit
performance.
-- Rollout of next-generation multi-service photobooths is
underway and the Group is focused on deploying these across its key
territories. The Group aims to install between 1,000 and 1,500
machines in France by the end of October 2023.
-- Sustained pace of rollout for Revolution laundry units at
between 50-60 per month, as the Group continues to expand its
laundry machine estate and deploy new laundry formats, including
compact and energy-saving models.
-- Continued focus on developing Feed.ME business area to
accelerate deployment of the Group's new pizza vending machine in
France as well as the extension of fresh fruit juice vending
equipment presence in Japan.
-- Return to the FTSE 250 index post-period end was a momentous
milestone for the Company, supported by the delivery of its
diversification growth strategy.
-- As previously reported, the Group has continued to see
positive trading momentum across its operations. Consequently, the
Board expects that results for FY 2023 will be in line with
recently revised market expectations(*) , subject to any changes to
the broader macroeconomic environment.
*Current market expectations are revenue between GBP300 million
and GBP320 million, EBITDA between GBP100 million and GBP110
million and profit before tax between GBP64 million and GBP67
million
Serge Crasnianski, CEO & Deputy Chairman , commented:
"The Group has achieved an extremely strong first-half
performance across its key business areas and in all of its 19
operating markets, which delivered significant growth in revenue,
EBITDA and profit before tax in the Period. As a result, the Board
increased its outlook for the current financial year FY 2023 in
early June.
"ME Group is a high-potential business that continues to offer
growth opportunities in existing and new geographic markets. We
have a dominant market position in most of the markets in which we
operate and our long-term customer contracts provide us with good
predictability and visibility on revenue streams. Our operations
are highly cash-generative and these cash flows are used to fund
growth through product innovation and expansion, and allow us to
deliver value to shareholders through growth and dividends.
Reflecting our solid business model and continued strategic
progress, ME Group has re-entered the FTSE 250 Index.
"Looking ahead, the Board remains confident in the Group's
growth strategy and strong financial position which provides us
with a platform to fund future growth opportunities."
ENQUIRIES:
ME Group International plc +44 (0) 1372 453 399
Serge Crasnianski, CEO
Stéphane Gibon, CFO
Hudson Sandler +44 (0) 20 7796 4133
Wendy Baker / Nick Moore / Ben me-group@hudsonsandler.com
Wilson
NOTES TO EDITORS
ME Group International plc (LSE: MEGP) operates, sells and
services a wide range of instant-service vending equipment,
primarily aimed at the consumer market.
The Group operates vending units across 19 countries and its
technological innovation is focused on four principal areas:
-- Photo.ME - Photobooths and integrated biometric identification solutions
-- Wash.ME - Unattended laundry services and launderettes
-- Print.ME - High-quality digital printing kiosks
-- Feed.ME - Vending equipment for the food service market
In addition, the Group operates other vending equipment such as
children's rides, amusement machines, and business service
equipment.
Whilst the Group both sells and services this equipment, the
majority of units are owned, operated and maintained by the Group.
The Group pays the site owner a commission based on turnover, which
varies depending on the country, location and the type of
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), transport hubs, and administration
buildings (City Halls, Police etc.). Equipment is maintained and
serviced by an established network of more than 650 field
engineers.
In August 2022 the Company changed its listed entity name to ME
Group International plc (previously Photo-Me International plc) to
better reflect the Group's diversification focus and business
strategy.
The Company's shares have been listed on the London Stock
Exchange since 1962.
For further information: www.me-group.com
CHAIRMAN'S STATEMENT
The Group is pleased to announce it has delivered another strong
performance during the Period, across its key business areas and
its key operating markets. Consumer demand and activity levels have
continued to be strong, particularly for official photo ID and
laundry services across all territories, with notable growth in the
Asia Pacific region where countries such Japan had pandemic
restrictions eased during the Period.
Driven by strong trading through the first half of the year, as
reported in the Group's trading update on
1 June, the Board significantly increased its revenue, EBITDA
and Profit before tax expectations for the FY 2023.
Business model and growth strategy
The Group continues to move from strength to strength, against a
challenging consumer backdrop, which we believe is an outcome of
our proven and resilient business model where we benefit from a
dominant market position, with limited or no competition, in many
of the countries in which we operate.
Our growth strategy, which underpins each of our business areas
and key operating markets, is focused on diversifying our product
portfolio, targeting new markets, expanding the number of units in
operation and increasing the yield per unit. Our disciplined
approach to minimising production and operational costs underpinned
this, enabling us to capitalise on operating leverage.
During the Period we continued to make good progress against our
five-year strategy, which is based on five core pillars to support
the development of our principal business areas through:
1. Expansion into new geographic territories and continuing to
build the Group's international presence including recently entered
markets of Italy, Finland and Australia.
2. Entering new market segments through securing new
partnerships with businesses such as supermarkets and smaller
retailers.
3. Ongoing new product and technology innovation to meet the
vending needs of consumers through state-of-the-art user
experience, backed by the best technology, and an omnichannel
approach.
4. Continued expansion and diversification of services and
revenue growth through a multi-service instant-service offering and
integration of centralised operating systems.
5. Merger & Acquisition strategy focused on enabling our
growth strategy through bolt-on acquisitions, which meet the
Group's return on investment criteria, to extend our geographic
footprint, consolidate our market position and increase the breadth
of our services available through our portfolio.
Central to delivery of our strategic growth plans are innovation
and diversification which continue to underpin our offering,
providing the platform to expand into new geographies, enter new
market segments and to grow and diversify our services. In July,
the Group entered into a binding conditional agreement to buy the
automated photobooth business owned and operated by two
subsidiaries of FUJIFILM Corporation in Japan. The transaction is
expected to complete by the end of September 2023. The Group
continues to explore potential acquisitions and we have an active
pipeline of opportunities, of which we will provide any updates on
in due course.
Dividends
As previously announced, it is the Group's policy that we will
continue to seek to pay annual dividends in excess of 55% of annual
profits after tax subject to market and capital requirements. This
total will be split between interim dividends (1/3) (generally to
be paid in the month of November) and final dividends (2/3)
(generally to be paid in the month of May).
Special dividend
On 20 April 2023, the Group was pleased to announce the
additional return of GBP2,268,910 to shareholders by way of a
special dividend of 0.6 pence per ordinary share in respect of the
12 months ended 31 October 2022. Following the announcement of its
Annual Results, the Board considered the strong financial
performance from FY 2022 as well as immediate capital requirements
and concluded that a one-off special dividend was an appropriate
way to return excess capital to shareholders. The special dividend
was paid on May 2023.
Interim dividend
The Board is declaring an interim dividend of 2.97 pence per
Ordinary Share (H1 2022: 2.60 pence per Ordinary Share). The
dividend will be paid on 23 November 2023 to shareholders on the
register on 3 November 2023. The ex-dividend date will be 2
November 2023.
Inclusion in the FTSE 250 Index
We were delighted that the latest quarterly review by FTSE
Russell, the global index provider, confirmed that ME Group met the
requisite criteria and the Company has once again been included as
a constituent of the FTSE 250 Index, with effect from the start of
trading on 19 June 2023.
This is a momentous corporate milestone for ME Group and
demonstrates the journey that we have been on in recent years to
evolve the Group through technological innovation to expand and
diversify our operations. This has enabled the Group to bring
evermore innovative automated self-service solutions to consumers,
delivered through an enhanced and more self-sufficient customer
experience every day.
I would like to thank my Board colleagues, the executive team,
and every employee across the Group for their continued dedication,
commitment and hard work, which has made this achievement
possible.
Corporate responsibility
We remain committed to strengthening our Sustainability activity
to deliver our goals through inventing eco-responsible local
services to support growth by integrating social, environmental,
and economic expectations into our strategy and operations. Details
of our Sustainability approach and KPIs are available on the
Group's website me-group.com .
Looking ahead
The Group has made a very encouraging start to the current
financial year, with a strong first-half performance which resulted
in the Board upgrading its FY 2023 revenue, EBITDA and profit
before tax expectations. This has been achieved despite the ongoing
global macro challenges that are impacting so many sectors and
markets.
Our core markets have continued to demonstrate strong levels of
activity as more consumers turn to ME Group for high quality and
highly reliable instant services, that offer diversity and
convenience.
The Group remains highly cash generative with a strong financial
and liquidity position, providing us with the platform to fund
future growth and M&A opportunities.
We continue to make solid progress against our five-year growth
strategy, underpinned by our proven business model, further
solidifying our market leading position across our key business
areas and operating markets. This growth strategy will enable us to
continue expanding our operations across Photo.ME, Wash.ME,
Print.ME and Feed.ME.
Notwithstanding any major changes to the macroeconomic backdrop,
the Board expects the Group to achieve its FY 2023 expectations, as
updated in the Trading Update issued on 1 June 2023, of revenue
between GBP300 million and GBP320 million, EBITDA between GBP100
million and GBP110 million and profit before tax between GBP64
million and GBP67 million.
Sir John Lewis OBE
Non-executive Chairman
11 July 2023
CHIEF EXECUTIVE'S BUSINESS AND FINANCIAL REVIEW
Financial performance
Reported revenue for the six months ended 30 April 2023 was
GBP143.8 million, an increase of 24.7% compared with the six months
ended 30 April 2022 ("H1 2022"). This was driven by a strong
performance across all of the Group's key business areas as well as
its 19 operating markets, and through a combination of a higher
consumer demand for the Group's instant-service machines and, to a
lesser extent, the company-wide pricing implemented during
FY2022.
The performance by geography saw revenue for Continental Europe
increase by 23.5% to GBP 93.4 million and operating profit increase
by 23.5% to GBP21.0 million . In the UK & Republic of Ireland ,
revenue was up 31.7% to GBP 26.2 million and operating profit was
up by 33.3% to GBP 5.6 million. Revenue for Asia Pacific increased
by 22.2% to GBP 24.2 million driven by a continued recovery in
photobooth activity across Japan and China.
Our photobooth business (Photo.ME) performed well in the Period,
benefitting from increased demand for photo ID across the Group's
key markets, with revenue up 25.4% to GBP 83.9 million whilst
EBITDA increased to GBP29.7 million.
Our laundry operations (Wash.ME) continued to perform strongly,
with total laundry revenue up 37.0% at GBP37.8 million whilst
EBITDA increased to GBP18.3 million. Revolution laundry operations
also showed strong growth with revenue up 37.5% at GBP34.8
million.
Print.ME also demonstrated a good performance, with revenue up
11.5% at GBP5.8 million, driven predominantly by activity in
France. This was supported by continued investment in new machines
to upgrade the existing estate as well as expand into new
locations. The Group plans to deploy a total of 2,500 new digital
kiosks by October 2025.
Reported EBITDA(1) increased by 14.7% to GBP46.1 million (H1
2022: GBP40.2 million), which delivered an EBITDA margin of 32.1%
(H1 2022: 35.0%) . In H1 2022, EBITDA was positively impacted by
the disposal of an office building for GBP7.1 million, which was
included in administrative expenses.
Reported profit before tax(2) was up 36.7% at GBP27.2 million
(H1 2022: GBP19.9 million). Profit after tax increased by 24.4% to
GBP20.4 million (H1 2022: GBP16.4 million).
The Group remains cash flow positive, with a 23.5% increase in
cash generated from operations to GBP36.8 million during the Period
(H1 2022: GBP29.8 million). We continue to invest across our
operations, in all business areas, and remain focused on delivering
our five-year growth strategy. As a result, capital expenditure in
the Period was up at GBP21.1 million (H1 2022: GBP14.4
million).
Funding and liquidity
As at 30 April 2023, the Group had gross cash of GBP113.1
million, up 18.1% compared with H1 2022. The Net cash balance
reduced 42.1% to GBP24.4 million (H1 2022: GBP42.2m), reflecting an
increase in borrowing compared to April 2022. During the last 12
months, the Group has returned GBP45.3 million to shareholders by
way of dividend payments. The Group continues to comply with its
banking covenants and remains in a strong financial and liquidity
position to fund its future growth strategy.
Overview of principal business areas
Below is an overview of the Group's four principal business
areas which are Photo.ME, Wash.ME, Print.ME and Feed.ME. In
addition, the Group operates other vending equipment.
Photo.ME Photobooths and integrated biometric identification solutions
Six months ended Six months ended
30 April 2023 30 April 2022
Number of units in operation 27,275 27,617
------------------------------------------------------------ -----------------
Percentage of total group vending estate (number of units) 62.3% 63.7%
------------------------------------------------------------ ----------------- -----------------
Revenue GBP83.9m GBP66.9m
------------------------------------------------------------ ----------------- -----------------
Capex GBP1.3m GBP1.4m
------------------------------------------------------------ ----------------- -----------------
EBITDA GBP29.7m GBP23.5m
------------------------------------------------------------ ----------------- -----------------
Photobooth operations continues to be our largest business area
by number of units, revenue and EBITDA contribution.
During the Period, revenue increased by 25.4% to GBP83.9 million
(H1 2022: GBP66.9 million), driven by an increase in activity
across all the Group's key territories, particularly Europe and
Asia, as demand for photo ID continued to grow. The average revenue
per machine was up significantly at GBP6,152 (H1 2022: GBP4,941) as
operations benefitted from an increase in the cost per use
implemented across most of the portfolio in FY 2022 alongside an
increase in consumer activity levels compared with H1 2022.
Capex remained broadly flat at GBP1.3 million (H1 2022: GBP1.4
million). This was largely due to a slower than anticipated rollout
of next-generation photobooths explained below.
EBITDA increased to GBP29.7 million , driven by the strong
performance due to the higher consumer demand , and it represented
64.4% of Group EBITDA. EBITDA was 35.4% of the revenue during the
Period.
At 30 April 2023, the number of photobooths in operation was
slightly down by 1.2% at 27,275 units (H1 2022 : 27,617 ), mainly
due to the removal of unprofitable machines which can be relocated
to more profitable sites. Photo.ME operations accounted for 62.3%
of the Group's total vending units.
Strategic progress
Our photobooths are designed to meet the needs of consumers who
require photo ID for official documents such as passports and
driving licences. The Group has a market leading proposition
through its estate of photobooths, offering a quasi-compulsory
service, and has established pricing power. We ensure that the
services offered through our photobooth operations maintain
relevance through our dedicated approach to continuous innovation
with the aim of continuing to expand the services available.
Deployment of our next-generation photobooth remains a key focus
and part of the Group's five-year growth strategy. The Group plans
to deploy up to 10,000 next-generation photobooth units which is
now expected to be completed by the end of FY 2025. While
deployment of the machines began in the Period as scheduled,
supplier delays affected delivery so the rollout has been slower
than initially expected. Consequently, the Group now expects to
install circa 1,000 next-generation photobooths in France by the
end of FY 2023. 3,000 next generation photobooths will be deployed
in 2024 as well as in 2025
This photobooth is compliant with the Group's digital platform.
Greater functionality enhances the consumer experience and provides
additional diversified services, such as fun features. The Group's
in-house R&D team is continuing to develop new functionalities
including biometric identification solutions - fingerprint and eye
scanning - as well as printing capabilities similarly offered
through our digital kiosks. Furthermore, anti-spoofing patents that
we have in place are enabling the Group to make rapid and sustained
progress on new ICAO and ISO biometric standards which we expect
will become the norm by 2025.
Wash.ME Unattended Revolution laundry services and launderettes
Six months ended Six months ended
30 April 2023 30 April 2022
Total Laundry units deployed (owned, sold and acquisitions) 6,239 5,565
--------------------------------------------------------------- -----------------
Total revenue from Laundry operations (1) GBP37.8m GBP27.6m
--------------------------------------------------------------- ----------------- -----------------
Total Laundry EBITDA GBP18.3m GBP13.2m
----------------- -----------------
Revolution
(excludes Launderettes and B2B):
--------------------------------------------------------------- ----------------- -----------------
- Number of Revolutions in operation 5,048 4,360
--------------------------------------------------------------- ----------------- -----------------
- Percentage of total group vending estate (number of units) 11.5% 10.1%
--------------------------------------------------------------- ----------------- -----------------
- Total revenue from Revolutions GBP34.8m GBP25.3m
--------------------------------------------------------------- ----------------- -----------------
- Revolution capex GBP10.8m GBP8.5m
--------------------------------------------------------------- ----------------- -----------------
(1) In the 'Interim Results for the Six Months Ended 2022'
issued on 19th July 2022, total revenue from laundry operations was
incorrectly reported as GBP25.9 million, as revenue from sales of
laundry machines of GBP1.8m were omitted in error. The correct
figure of GBP27.6 million is now shown in the comparative column in
the above table. Total reported revenue was unaffected .
Total revenue from our laundry operations grew by 37.0% to
GBP37.8 million, driven by an increase in the number of Revolution
units in operation alongside a continuation of strong consumer
demand. At 30 April 2023 , the total number of laundry units
deployed (owned, sold and acquired) was up 12.1% at 6,239.
Total laundry EBITDA increased to GBP18.3 million and
contributed 39.7% to Group EBITDA. EBITDA was 48% of revenue in the
Period.
Continued growth of Revolution laundry operations
Revolution revenue increased by 37.5% to GBP34.8 million, which
represented 24.2% of total Group revenue in the Period. The average
revenue per machine (excluding VAT) increased to GBP15,226 per year
(H1 2022: GBP12,884 per year).
Revolution capex increased to GBP10.8 million (H1 2022 : GBP8.5
million) reflecting an uptick in production and installation costs,
along with the redeployment of selected machines to more
profitablelocations.Additionally, the Group has entered a period of
machine refurbishment and maintenance, the first since laundry
operations were launched in 2012.The Group remains focused on
expanding its laundry estate, led by the continued deployment of
Revolution units. The number of Revolution units in operation grew
by 15.8% to 5,048. In line with the Group's strategy, Revolution
laundry machines once again increased as a proportion of the total
estate and at the Period end accounted for 11.5% of the Group's
total estate by number of machines (H1 2022 : 10.1%).
Strategic progress
The rate of deployment of Revolution laundry units accelerated
to 50-60 machines per month as we continue to expand our presence
in the self-service laundry market.
We continue to rollout our newest laundry machine formats -
Revolution Compact V3 which offers a more environmentally friendly
solution and Revolution Flex which offers a compact format. These
new machines will further diversify our laundry offering for the
benefit of consumers, whilst enabling the Group to save on costs as
well as water and energy consumption.
In June, we started to roll out a new consumer App. This digital
tool aims to improve the user experience whilst enabling the Group
to better analyse and understand its end consumers in terms of
usage and expectations. The App will help to further build consumer
loyalty and is expected to boost performance for Wash.ME. The first
version was launched in June and includes a 'Revolution laundry
finder' function which enables consumers to easily locate their
nearest Revolution laundry machines. The App also provides full
details of the services available and it rewards consumers through
an effective loyalty programme offering promotions. A full roadmap
of enhanced App features has been planned.
Print.ME High-quality digital printing service
Six months ended Six months ended
30 April 2023 30 April 2022
Number of units in operation 4,740 4,848
------------------------------------------------------------ -----------------
Percentage of total group vending estate (number of units) 10.8% 11.2%
------------------------------------------------------------ ----------------- -----------------
Revenue GBP5.8m GBP5.2m
------------------------------------------------------------ ----------------- -----------------
Capex GBP1.3m GBP0.1m
------------------------------------------------------------ ----------------- -----------------
EBITDA GBP2.0m GBP1.6m
------------------------------------------------------------ ----------------- -----------------
Total revenue increased by 11.5% to GBP5.8 million (H1 2022:
GBP5.2 million) as the Group benefitted from the replacement of 413
old machines with new digital kiosks.
Print.ME revenue represented 4.0% of Group revenue. EBITDA
reduced year on year to GBP2.0 million and contributed 4.3% of
Group EBITDA in the Period.
The average revenue per machine (excluding VAT) was GBP2,447 per
year (H1 2022: GBP2,172 per year). EBITDA was 34.5% of the revenue
in the Period.
Capex during the Period was GBP1.3 million, a significant
increase on the prior year (H1 2022: GBP0.1 million), as the Group
progressed the rollout of new kiosk installations as well as
replacing some of its existing machines, the benefit of which is
expected to be evident in FY 2023.
At 30 April 2023 the Group had 4,740 kiosks in operation, down
2.2% compared with the prior year (H1 2022: 4,848). Kiosks
accounted for 10.8% of the total number of vending units in
operation.
Strategic progress
Over recent years the Group has mostly focused investment in the
Photo.Me, Wash.ME and Feed.ME businesses, nevertheless, there
continues to be demand for high-quality printing services. This is
reflected in the Group's stronger revenue performance.
The Group continues to consider opportunities to further extend
digital kiosk services offered through its instant-service machine
network and remains focused on identifying partnership
opportunities within existing territories.
The Group is currently completing the installation of 200 kiosks
as part of a major new contract worth 12 million prints a year.
Additionally, the Group will continue to replace existing machines
with new digital kiosks.
The next-generation photobooth discussed above will have similar
functionalities to the Group's digital printing kiosks, thereby
expanding the availability of this service to the consumer.
Feed.ME Vending equipment for the food service market
Our food vending equipment operations remain a key strategic
focus for the Group and an area where we believe there to be
long-term growth opportunities to meet growing demand. Operations
are focused on two areas: i) self-service fresh fruit juice
equipment for the B2B market and (ii) pizza vending machines
targeted at the B2B hospitality market (restaurants,
takeaways).
Revenue solely from the sale of equipment during the Period was
GBP6.4 million (H1 2022: GBP3.1 million) up 106.5% and contributed
4.5% to Group revenue. During the Period, the Group sold
approximately 20 machines per month. Although the installation of
pizza machines is not yet at the expected level, the Group's orange
juice business in Japan has started to recover post-COVID.
Strategic progress
Feed.ME remains a core strategic focus of expansion for the
Group, albeit progress was slower than expected due to technical
adjustments to the Group's new pizza vending machine. As a
consequence, the Group has taken steps to bring the manufacturing
of the pizza vending equipment in-house during the
commercialisation phase, with the aim of increasing production to
between 30 and 40 machines per month. This will ensure that these
operations have the support and oversight of our expert R&D
team whilst also improving quality, control and cost
efficiencies.
In Japan, we have restarted our B2B fresh fruit juice vending
operations (which includes fulfilment of the oranges for the
machines) aimed at end markets such as the hospitality sector. The
Group has c.200 machines operating in Japan and plans to continue
expanding its estate.
During the Period we began deploying omni-channel software
across our pizza vending estate in partnership with a third party.
This new technology will offer consumers an easy and integrated
solution whilst providing the Group with the capability to manage
units remotely.
Other vending equipment
As at 30 April 2023 , the Group operated 6,702 (30 April 2022 :
6,460) other vending units in addition to our four principal
business areas. This included 2,399 children's rides (Amuse.ME),
3,385 photocopiers (Copy.ME) and 918 other miscellaneous
machines.
These machines are typically located in high-footfall locations
alongside the Group's principal activities, thereby benefiting from
existing site owner relationships and operating synergies. The
Group will continue to operate other vending units where
profitable.
Other vending equipment accounted for 15.3% of the Group's total
vending estate by number of units, down 0.4% compared with the
previous year and represented 2.4% of the total Group revenue.
REVIEW OF PERFORMANCE BY GEOGRAPHY
Commentary on the Group's financial performance is set out
below, in line with the segments as operated by the Board and the
management of the Group. These segmental breakdowns are consistent
with the information prepared to support the Board's
decision-making. Although the Group is not managed around product
lines, some commentary below relates to the performance of specific
products in the relevant geographies.
Vending units in operation
At 30 April 2023 At 30 April 2022
Number % of total Number % of total
of units estate of units estate
Continental Europe 25,604 58.4% 25,047 57.8%
UK & Republic of Ireland 6,586 15.0% 6,874 15.9%
Asia Pacific 11,621 26.5% 11,415 26.3%
Total 43,811 100% 43,336 100%
-------------------------- --------- ----------- -----------
The total number of vending units in operation at 30 April 2023
increased slightly by 1.1% to 43,811 compared with the prior year
(H1 2022: 43,336), mainly driven by the expansion of laundry
operations.
Key financials
The Group reports its financial performance based on three
geographic regions of operation:
(i) Continental Europe; (ii) the UK & Republic of Ireland;
and (iii) Asia Pacific.
Revenue by geographic region
Six months ended Six months ended
30 April 2023 30 April 2022
Continental Europe GBP93.4m GBP75.6m
UK & Republic of Ireland GBP26.2m GBP19.9m
Asia Pacific GBP24.2m GBP19.8m
Total GBP143.8m GBP115.3m
----------------- -----------------
Operating profit by geographic region
Six months ended Six months ended
30 April 2023 30 April 2022
Continental Europe GBP21.0m GBP17.0m
UK & Republic of Ireland GBP5.6m GBP4.2m
Asia Pacific GBP3.3m GBP1.9m
Corporate costs GBP(2.3)m GBP(1.6)m
Total GBP27.6m GBP21.5m
----------------- -----------------
Operating revenue evolution
The table below provides a detailed breakdown of operating
revenue evolution by geographic region and business area in H1 2023
vs H1 2022.
H1 2022
Nov 2022
to Apr 2023
CONTINENTAL EUROPE
Photo.ME 32.6%
Print.ME 14.8%
Wash.ME 31.6%
Other Vending Equipment 13.4%
Total 30.5%
-------------------------- ------------
UK & REPUBLIC OF IRELAND
Photo.ME 15.1%
Print.ME -67.9%
Wash.ME 50.9%
Other Vending Equipment 23.8%
Total 29.1%
-------------------------- ------------
ASIA PACIFIC
Photo.ME 14.6%
Print.ME -8.8%
Wash.ME 3.9%
Other Vending Equipment 96.3%
Total 22.1%
-------------------------- ------------
TOTAL
Photo.ME 25.2%
Print.ME 11.2%
Wash.ME 37.3%
Other Vending Equipment 52.4%
Total 28.6%
-------------------------- ------------
Continental Europe
Continental Europe is the Group's largest region by both number
of machines and contribution to Group revenue.
Revenue increased by 23.5% to GBP93.4 million driven in large
part by a strong performance in photobooth activity, as demand for
photo ID continued to grow, and laundry. In addition, the Group saw
the benefit of the consumer price increases introduced for
photobooth operations during FY 2022, which were implemented across
France and Germany, moving the price from EUR6 to EUR8 and EUR8 to
EUR10 respectively.
Photo.ME and Wash.ME operating revenue significantly grew vs H1
2022, up 32.6% and 31.6% respectively. Print.ME operating revenue
increased by 14.8%. The region contributed 65.0% of total Group
revenue. Operating profit increased by 23.5% to GBP21.0
million.
As at 30 April 2023 , there were 25,604 units in operation in
the region, which represented 58.4% of the Group's total vending
estate.
UK & Republic of Ireland
Revenue in the region increased by 31.7% to GBP26.2 million and
contributed 18.2% to Group revenue. Operating revenue from Photo.ME
was up 15.1% This was driven primarily by a very strong performance
in photobooths with improved demand for photo ID services for
passports and official documents.
Wash.ME performed strongly, with operating revenue up 50.9%,
reflecting the ongoing expansion of the Group's laundry operations
in the region. Revolution units in operation in the region
increased by 11.4% compared with H2 2022.
Print.ME was trialled in the UK and Ireland however, the Group
decided to remove the machines and transferred them to France where
they were far more profitable.
Other vending equipment, which was also severely impacted by
restrictions during the pandemic, saw a significant increase in
operating revenue which was up by up 23,,8%
Operating profit in the region increased by 33.3% to GBP5.6
million, driven by the installation of Revolution laundry machines
and photobooths performance.
As at 30 April 2023 , there were 6,586 units in operation in the
region, which represents 15.0% of the Group's total vending
estate.
Asia Pacific
Revenue in the region increased by 22.2% to GBP24.2 million,
driven by a continued recovery of key markets particularly in China
and Japan which lifted pandemic restrictions later than other
territories.
Operating revenue for Photo.ME improved by 14.6% as the Group
experienced strong demand for photo ID across its Asia operations.
There was an increase in operating revenue for Wash.ME, up 3.9%,
while operating revenue for other vending equipment improved
significantly, up 96.3%.
Operating profit in the region was GBP3.3 million, an increase
of 73.7% which reflects the continued recovery of activity.
The Group continued to successfully expand its fresh fruit
operations in Japan with further machines installed.
As at 30 April 2023 , there were 11,621 units in operation in
the region, an increase of 1.8%, representing 26.5% of the Group's
total units in operation.
PRINCIPAL RISKS
Similar to any business, the Group faces risks and uncertainties
that could impact the achievement of the Group's strategy.
These risks are accepted as inherent to the Group's business.
The Board recognises that the nature and scope of these risks can
change; it therefore regularly reviews the risks faced by the Group
as well as the systems and processes to mitigate them.
The table below sets out what the Board believes to be the
principal risks and uncertainties, their impact, and actions taken
to mitigate them.
Economic
Nature of risk Description and impact Mitigation
--------------------- ------------------------------ ----------------------------------
Global economic Economic growth has a The Group focuses on maintaining
conditions major influence on consumer the characteristics and
spending. affordability of its needs-driven
A sustained period of products.
economic recession and Like most businesses around
a period of high inflation the world, the Group has
could lead to a decrease had to face a significant
in consumer expenditure increase in supply chain
in discretionary areas. and raw material costs,
however, its strong position
in the markets in which
it operates gives the
Group significant pricing
power.
The Group has no exposure
to the invasion of Ukraine
by Russia.
--------------------- ------------------------------ ----------------------------------
Volatility of foreign The majority of the Group's The Group hedges its exposure
exchange rates revenue and profit is to currency fluctuations
generated outside the on transactions, as relevant.
UK, and the Group's financial However, by its nature,
results could be adversely in the Board's opinion,
impacted by an increase it is very difficult to
in the value of sterling hedge against currency
relative to those currencies. fluctuations arising from
translation in consolidation
in a cost-effective manner.
--------------------- ------------------------------ ----------------------------------
Regulations
Nature of risk Description and impact Mitigation
------------------ --------------------------------- --------------------------------
Centralisation of In many European countries The Group has developed
the production of where the Group operates, new systems that respond
ID photos if governments were to to this situation, leveraging
implement centralised 3D technology in ID security
image capture, for biometric standards, and securely
passport and other applications, linking our booths to the
or widen the acceptance administration repositories.
of self-made or home-made Solutions are in place in
photographs for official France, Ireland, Germany,
document applications, Switzerland and the UK;
the Group's revenues discussions are ongoing
and profits could be in Belgium and the Netherlands.
affected. Furthermore, the Group also
ensures that its ID products
remain affordable and of
a high-quality.
------------------ --------------------------------- --------------------------------
Strategic
Nature of risk Description and impact Mitigation
--------------------------- ----------------------------- ----------------------------------
Identification of The failure to identify Management teams constantly
new business opportunities new business areas may review demand in existing
impact the ability of markets and potential
the Group to grow in the new opportunities. The
long-term. Group continues to invest
in research in new products
and technologies. Furthermore,
the Group also ensures
that its ID products remain
affordable and of a high-quality.
--------------------------- ----------------------------- ----------------------------------
Inability to deliver The realisation of long-term The Group regularly monitors
anticipated benefits anticipated benefits depends the performance of its
from the launch mainly on the continued entire estate of machines.
of new products growth of the laundry New technology-enabled
and food businesses and secure ID solutions are
the successful development heavily trialled before
of integrated secure ID launch and the performance
solutions. of operating machines
is continually monitored.
--------------------------- ----------------------------- ----------------------------------
Market
Nature of risk Description and impact Mitigation
------------------------ ------------------------------- -----------------------------
Commercial relationships The Group has well-established, The Group's major key
long-term relationships relationships are supported
with a number of site-owners. by medium-term contracts.
The deterioration in the The Group actively manages
relationship with, or its site-owner relationships
ultimately the loss of, at all levels to ensure
a key account would have a high quality of service.
an adverse, albeit contained, The Group continues to
impact on the Group's monitor the situation
results, bearing in mind where the main key accounts
that the Group's turnover are operating
is spread over a large
client base and none of
the accounts represent
more than 2% of Group
turnover.
To maintain its performance,
the Group needs to have
the ability to continue
trading in good conditions
in France and the UK,
taking into account the
situation in these two
countries.
------------------------ ------------------------------- -----------------------------
Operational
Nature of risk Description and impact Mitigation
------------------- ------------------------------ -----------------------------------
Reliance on foreign The Group sources most Extensive research is
manufacturers of its products from outside conducted into quality
the UK. Consequently, and ethics before the
the Group is subject to Group procures products
risks associated with from any new country or
international trade. supplier. The Group also
maintains very close relationships
with both its suppliers
and shippers to ensure
that risks of disruption
to production and supply
are managed appropriately.
------------------- ------------------------------ -----------------------------------
Reliance on one The Group currently buys The Board has decided
single supplier all its paper for photobooths to hold a strategic stock
of consumables from one single supplier. of paper, allowing for
The failure of this supplier 6-9 months' worth of paper
could have a significant consumption, to allow
adverse impact on paper enough time to put in
procurement. place alternative solutions.
------------------- ------------------------------ -----------------------------------
Reputation The Group's brands are The protection of the
key assets of the business. Group's brands in its
Failure to protect the core markets is sustained
Group's reputation and with certain unique features.
brands could lead to a The appearance of the
loss of trust and confidence. machine is subject to
This could result in a high maintenance standards.
decline in our customer Furthermore, the reputational
base. risk is diluted as the
Group also operates under
a range of brands.
------------------- ------------------------------ -----------------------------------
Product and The Board recognises that The Group continues to
service quality the quality and safety invest in its existing
of both its products and estate, to ensure that
services are of critical it remains contemporary,
importance and that any and in constant product
major failure will affect innovation to meet customer
consumer confidence. needs.
The Group also has a programme
in place to regularly
train its technicians.
------------------- ------------------------------ -----------------------------------
Technological
Nature of risk Description and impact Mitigation
------------------------ --------------------------------- ---------------------------------
Failure to keep The Group operates in The Group mitigates this
up with advances fields where upgrades risk by continually focusing
in technology to new technologies are on R&D.
critical.
------------------------ --------------------------------- ---------------------------------
Cyber risk: Third The Group operates an The Group undertakes an
party attack on increasing number of photobooths ongoing assessment of
secure ID data transfer capturing ID data and the risks and ensures
feeds transferring these data that the infrastructure
directly to government meets the security requirements.
databases.
------------------------ --------------------------------- ---------------------------------
Serge Crasnianski
Chief Executive Officer & Deputy Chairman
12 July 2023
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 April 2023
Unaudited Unaudited Audited
six months to six months to 12 months to
30 April 30 April 31 October
2023 2022 2022
Notes GBP '000 GBP '000 GBP '000
------------------------------------------------------- ------ -------------- ---------------- -------------
Revenue 3 143,822 115,261 259,780
Cost of Sales (100,301) (85,634) (178,377)
------------------------------------------------------- ------ -------------- ---------------- -------------
Gross Profit 43,521 29,627 81,403
Other Operating Income 123 159 7,916
Administrative Expenses (16,180) (8,268) (32,638)
------------------------------------------------------- ------ -------------- ---------------- -------------
Operating Profit 3 27,464 21,518 56,681
Other net gains / (losses) 4 191 (462) (1,176)
Finance Income 580 19 -
Finance Cost (1,050) (1,129) (2,151)
------------------------------------------------------- ------ -------------- ---------------- -------------
Profit before Tax 27,185 19,946 53,354
Total Tax Charge 5 (6,797) (3,514) (14,561)
------------------------------------------------------- ------ -------------- ---------------- -------------
Profit for the period 20,388 16,432 38,793
------------------------------------------------------- ------ -------------- ---------------- -------------
Other Comprehensive Income
------------------------------------------------------- ------ -------------- ---------------- -------------
Items that are or may subsequently be classified to
Profit and Loss:
Exchange Differences Arising on Translation of Foreign
Operations 1,195 120 829
Total Items that are or may subsequently be classified
to profit and loss 1,195 120 829
------------------------------------------------------- ------ -------------- ---------------- -------------
Items that will not be classified to profit and loss:
Remeasurement gains in defined benefit obligations and
other post-employment benefit obligations - - 1,151
Deferred tax on remeasurement gains - - (248)
------------------------------------------------------- ------ -------------- ---------------- -------------
Total Items that will not be classified to profit and
loss - - 903
------------------------------------------------------- ------ -------------- ---------------- -------------
Other comprehensive income / (expense) for the year
net of tax 1,195 120 1,732
------------------------------------------------------- ------ -------------- ---------------- -------------
Total Comprehensive income for the period 21,583 16,552 40,525
------------------------------------------------------- ------ -------------- ---------------- -------------
Profit for the Period Attributable to:
Owners of the Parent 20,388 16,432 38,793
Non-controlling interests - - -
------------------------------------------------------- ------ -------------- ---------------- -------------
20,388 16,432 38,793
------------------------------------------------------- ------ -------------- ---------------- -------------
Total comprehensive income attributable to:
Owners of the Parent 21,583 16,552 40,525
Non-controlling interests - - -
------------------------------------------------------- ------ -------------- ---------------- -------------
21,583 16,552 40,525
------------------------------------------------------- ------ -------------- ---------------- -------------
Earnings per Share
------------------------------------------------------- ------ -------------- ---------------- -------------
Basic Earnings per Share 7 5.39p 4,35p 10.26p
Diluted Earnings per Share 7 5.34p 4,35p 10.23p
------------------------------------------------------- ------ -------------- ---------------- -------------
All results derive from continuing operations.
The accompanying notes form an integral part of these condensed
consolidated financial statements.
GROUP STATEMENT OF FINANCIAL POSITION
as at 30 April 2023
Unaudited Unaudited Audited
30 April 30 April 31 October
2023 2022 2022
(Restated) (Restated)
Notes GBP'000 GBP'000 GBP'000
------------------------------------- ------ ---------- ----------- -----------
Assets
Goodwill 9 16,420 19,272 16,320
Other intangible assets 9 15,569 14,088 16,434
Property, plant & equipment 9 104,780 88,337 101,090
Investment property 9 596 585 592
Investment in associates 21 21 21
Financial instruments held at FVTPL 10 5,437 1,501 5,239
Other receivables 3,013 2,773 2,959
------------------------------------- ------ ---------- ----------- -------------
Non-Current Assets 145,836 126,577 142,655
------------------------------------- ------ ---------- ----------- -------------
Inventories 11 33,595 21,737 25,491
Trade and other receivables 20,767 19,197 20,050
Current tax 3,227 3,273 2,990
Cash and cash equivalents 12 113,057 95,773 135,200
------------------------------------- ------ ---------- ----------- -------------
Current assets 170,646 139,980 183,731
------------------------------------- ------ ---------- ----------- -------------
Total assets 316,482 266,557 326,386
------------------------------------- ------ ---------- ----------- -------------
Equity
Share capital 1,890 1,889 1,889
Share premium 10,627 10,599 10,627
Translation reserve 9,689 7,785 8,494
Other reserves 3,096 1,781 2,665
Retained earnings 119,533 121,207 108,974
------------------------------------- ------ ---------- ----------- -------------
Total Shareholders' funds 144,835 143,261 132,649
------------------------------------- ------ ---------- ----------- -------------
Liabilities
Financial liabilities 12 67,726 45,523 82,429
Post-employment benefit obligations 3,884 4,888 3,850
Deferred tax liabilities 7,491 7,781 7,778
------ ---------- ----------- -------------
Non-current liabilities 79,101 58,192 94,057
------------------------------------- ------ ---------- ----------- -------------
Financial liabilities 12 34,140 21,665 35,657
Provisions 1,607 1,351 1,567
Current tax 4,727 668 10,208
Trade and other payables 52,072 41,400 52,248
------------------------------------- ------ ---------- ----------- -------------
Current liabilities 92,546 65,104 99,680
------------------------------------- ------ ---------- ----------- -------------
Total equity and liabilities 316,482 266,557 326,386
------------------------------------- ------ ---------- ----------- -------------
The accompanying notes form an integral part of these condensed
consolidated financial statements.
Refer to notes 9 and 12 for details of restatements.
GROUP CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 30 April 2023
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 April 30 April 31 October
2023 2022 2022
(Restated) (Restated)
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Notes GBP'000 GBP'000 GBP'000
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Cash flow from operating
activities
Profit before tax 27,185 19,946 53,354
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Finance costs 495 404 794
Interest of lease liabilities 555 725 1,357
Finance income (580) (19) -
Other (gains)/losses (191) 462 1,176
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Operating profit 27,464 21,518 56,681
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Amortisation and impairment of
intangible assets 2,309 4,030 6,772
Depreciation and impairments of
property, plant and equipment 16,358 14,620 28,791
Loss / (profit) on sale of
property, plant and equipment 254 (7,277) (7,490)
Exchange differences (498) (348) (594)
Movements in provisions 77 (863) (809)
Other non cash items (131) (812) (433)
Changes in working capital:
Inventories (8,104) (3,279) (7,033)
Trade and other receivables (772) 3,333 2,295
Trade and other payables (176) (1,084) 9,764
Cash generated from operations 36,781 29,837 87,944
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Interest paid (1,051) (1,129) (2,151)
Taxation paid (12,802) (8,839) (10,895)
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Net cash generated from operating
activities 22,928 19,869 74,898
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Cash flows from investing
activities
Acquisition of subsidiaries - (739) (739)
Proceeds from disposal of
subsidiaries 209 152 152
Investment in intangible assets (1,372) (1,266) (2,486)
Proceeds from sale of intangible
assets 41 - 71
Purchase of property, plant and
equipment (19,767) (13,123) (32,670)
Proceeds from sale of property,
plant and equipment 1,079 7,945 8,997
Investment in financial
instruments - - (4,450)
Interest received 580 19 -
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Net cash in investing activities (19,230) (7,012) (31,125)
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Cash flows from financing
activities
Issue of ordinary shares to equity
shareholders 1 - 28
Acquisition of minority interest - (2,985) (2,985)
Repayment of principal of leases (2,707) (2,105) (6,196)
Repayment of borrowings (16,288) (9,862) (24,622)
Increase in borrowings 863 186 61,773
Dividends paid to owners of the
Parent (9,829) - (35,497)
Net cash utilised in financing
activities (27,960) (14,766) (7,499)
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Net (decrease) / increase in cash
and cash equivalents (24,262) (1,909) 36,274
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Cash and cash equivalents at
beginning of year 135,200 98,378 98,378
Exchange gain / (loss) on cash and
cash equivalents 2,119 (696) 548
----------------------------------- ------ ----------------------- ----------------------- -----------------------
Cash and cash equivalents at end
of year 12 113,057 95,773 135,200
----------------------------------- ------ ----------------------- ----------------------- -----------------------
The accompanying notes form an integral part of these condensed
consolidated financial statements.
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 April 2023
Attributable
to
owners
Share Share Other Translation Retained of the Non-controlling
capital premium reserves reserve earnings Parent interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
At 1 November
2021 1,889 10,599 1,781 7,654 106,051 127,974 1,720 129,694
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Profit for the
period - - - - 16,432 16,432 - 16,432
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Other
comprehensive
(expense)/income:
Exchange
differences - - - 131 - 131 (11) 120
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Total other
comprehensive
(expense) /
income - - - 131 - 131 (11) 120
Total
comprehensive
(expense) /
income - - - 131 16,432 16,563 (11) 16,552
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Transactions with
owners
of the Parent:
Acquisition of
minority - - - - (1,276) (1,276) (1,709) (2,985)
Total transactions
with owners of
the Parent - - - - (1,276) (1,276) (1,709) (2,985)
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
At 30 April 2022 1,889 10,599 1,781 7,785 121,207 143,261 - 143,261
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Share Share Other Translation Retained
capital premium reserves reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
At 1 November 2022 1,889 10,627 2,665 8,494 108,974 132,649
--------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Profit for the period - - - - 20,388 20,388
--------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Other comprehensive
(expense)/income:
Exchange differences - - - 1,195 - 1,195
Total other comprehensive
(expense) / income - - - 1,195 - 1,195
--------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Total comprehensive
(expense) / income - - - 1,195 20,388 21,583
--------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
Transactions with owners
of the Parent:
Shares issued in the period 1 - - - - 1
Share options - 431 - - 431
Dividends - - - - (9,829) (9,829)
Acquisition of minority - - - - - -
Total transactions with
owners of the Parent 1 - 431 - (9,829) (9,397)
--------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
At 30 April 2023 1,890 10,627 3,096 9,689 119,533 144,835
--------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- ----------------- ---------------------
The accompanying notes form an integral part of these condensed
consolidated financial statements
NOTES
1. General information and authorization of the Interim
Report
Me Group International plc (the "Company") is a public limited
company incorporated and registered in England and Wales and whose
shares are quoted on the London Stock Exchange, under the symbol
MEGP. The registered number of the Company is 735438 and its
registered office is at Unit 3B, Blenheim Rd, Epsom, KT19 9AP.
The principal activities of the Group continue to be the
operation, sale, and servicing of a wide range of instant-service
equipment. The Group operates coin-operated automatic photobooths
for identification and fun purposes, and a diverse range of vending
equipment, including digital photo kiosks, laundry machines, and
business service equipment, and amusement machines.
The condensed consolidated interim financial statements of Me
Group International plc (the "Company") for the six months ended 30
April 2023 ("the Interim Report") were approved and authorised for
issue by the Board of Directors on 11 July 2023. These condensed
consolidated interim financial statements comprise the Company and
its subsidiaries (together the "Group") and are presented in pounds
sterling, rounded to the nearest thousand.
2. Basis of preparation and accounting policies
The financial statements have been prepared in accordance with
IAS 34. The accounting policies applied are consistent with those
that were applied in the Company's consolidated financial
statements for the 12 months ended 31 October 2022 and that are
expected to be applied in its consolidated financial statements for
the year ended 31 October 2023.
New accounting standards
Adopted by the Group
The Group has adopted the following new standards and amendments
for the first time in these financial statements with no material
impact.
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
-- Annual Improvements to IFRS Standards 2018-2020
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
-- Reference to the Conceptual Framework (Amendments to IFRS 3)
Not yet adopted by the Group
Certain new accounting standards and interpretations have been
published that are not mandatory for the current period and have
not been early adopted by the Group. These new standards and
interpretations, which are not expected to have a material effect
on the Group, are set out below.
Date required to
be
adopted by the
Description Group
--------------------------------------------------- ----------------
IFRS 17 Insurance Contracts 1 January 2023
Disclosure of Accounting Policies (Amendments
to IAS 1 and IFRS Practice Statement 2) 1 January 2023
Definition of Accounting Estimate (Amendments
to IAS 8) 1 January 2023
--------------------------------------------------- ----------------
IAS 12 Income Taxes: Deferred Tax related to Assets
and Liabilities arising
from a Single Transaction 1 January 2023
--------------------------------------------------- ----------------
The condensed consolidated interim financial statements comprise
the unaudited financial information for the six months ended 30
April 2023. They do not include all of the information and
disclosures required for full annual financial statements, and
should be read in conjunction with the Group's financial statements
for the period ended 31 October 2022. The condensed financial
statements do not constitute statutory accounts within the meaning
of section 434 of the UK Companies Act 2006.
The consolidated financial statements of the Group as at and for
the period ended 31 October 2022 are available at www.me-group.com
or upon request from the Company's registered office at Unit 3B,
Blenheim Rd, Epsom, KT19 9AP, Surrey.
The Interim Report is unaudited but has been reviewed by the
auditors and their report to the Company is included in the Interim
Report. The comparative figures for the financial period ended 31
October 2022 are not the Company's statutory accounts for that
financial year. Those accounts have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The
report of the auditors (i) was unmodified, (ii) did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without modifying their report, and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
Accounting policies and estimates
The accounting policies applied by the Group in this Interim
Report are the same as those applied in the Group's financial
statements for the 12 months period ended 31 October 2022.
Estimates and significant judgements
The preparation of the condensed consolidated financial
information requires management to make estimates and assumptions
that affect the reported amounts of revenue, expenses, assets and
liabilities and the disclosure of contingent liabilities at the
date of the condensed consolidated financial information. Such
estimates and assumptions are based on historical experience and
various other factors that are believed to be reasonable in the
circumstances and constitute management's best judgement at the
date of the financial statements. In future, actual experience may
deviate from these estimates and assumptions, which could affect
the financial statements as the original estimates and assumptions
are modified, as appropriate, in the period in which the
circumstances change.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were in the same areas as those that applied
in the consolidated financial statements as at and for the period
ended 31 October 2022.
Use of non-GAAP profit measures
The Group measures performance using earnings before interest,
tax, depreciation and amortisation ("EBITDA"). EBITDA is a common
measure used by a number of companies, but is not defined in
IFRS.
The Group measures cash on a net cash basis as explained in note
12.
Going Concern
The Annual Report for the period ended 31 October 2022 provided
a full description of the Group's business activities, its
financial position, cash flows, funding position and available
facilities together with the factors likely to affect its future
development, performance and position. It also detailed risks
associated with the Group's business. This interim report provides
updated information on these subjects for the six months to 30
April 2023.
The Group has at the date of this Interim Report, sufficient
financing available for its estimated requirements for at least the
next twelve months, together with the proven ability to generate
cash from its trading performance. This provides the Directors with
confidence that the Group is well placed to manage its business
risks successfully in the context of the current financial
conditions and the general outlook in the global economy.
After reviewing the Group's annual budgets, plans and financing
arrangements, the Directors consider that the Group has adequate
resources to continue operating for the foreseeable future. The
board considers it appropriate to adopt the going concern basis of
accounting in preparing the interim financial statements and has
not identified any material uncertainties to the company's ability
to continue to do so over a period of at least twelve months from
their date of approval.
3. Segmental analysis
IFRS 8 requires operating segments to be identified, based on
information presented to the Chief Operating Decision Maker (CODM)
in order to allocate resources to the segments and monitor
performance. The Group reports its segments on a geographical
basis: Asia Pacific, Continental Europe and United Kingdom &
Ireland. The Group's Continental European operations are
predominately based in Western Europe and, with the exception of
the Swiss operations, use the Euro as their domestic currency. The
Board, being the CODM, believe that the economic characteristics of
the European operations, together with the fact that they are
similar in terms of operations, use common systems and the nature
of the regulatory environment allow them to be aggregated into one
reporting segment.
Seasonality of operations
Historically, the second half of the financial year is
seasonally the strongest for the Group in terms of profits.
Segmental results are reported before intra-group transfer
pricing charges.
United
Asia Continental Kingdom
Pacific Europe & Ireland Corporate Total
Six months to 30 April
2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ -------------- ---------- ---------
Total revenue 24,235 96,130 26,172 - 146,537
Inter segment sales - (2,708) (7) - (2,715)
-------------------------------- ------------ ------------ -------------- ---------- ---------
Revenue from external
customers 24,235 93,422 26,165 - 143,822
-------------------------------- ------------ ------------ -------------- ---------- ---------
EBITDA 5,794 33,322 9,126 (2,112) 46,130
-------------------------------- ------------ ------------ -------------- ---------- ---------
Depreciation, amortisation
and impairment (2,539) (12,363) (3,597) (167) (18,666)
Operating profit 3,255 20,959 5,529 (2,279) 27,464
-------------------------------- ------------ ------------ -------------- ---------- ---------
Operating profit 27,465
Other gains 191
Finance income 580
Finance costs (1,050)
Profit before tax 27,185
-------------------------------- ------------ ------------ -------------- ---------- ---------
Tax (6,797)
-------------------------------- ------------ ------------ -------------- ---------- ---------
Profit for the period 20,388
-------------------------------- ------------ ------------ -------------- ---------- ---------
Capital expenditure (excluding
Right of Use assets) 4,000 13,953 2,817 369 21,139
-------------------------------- ------------ ------------ -------------- ---------- ---------
United
Asia Continental Kingdom
Pacific Europe & Ireland Corporate Total
Six months to 30 April
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
Total revenue 19,793 80,597 19,866 - 120,256
Inter segment sales - (4,994) (2) - (4,996)
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
Revenue from external
customers 19,793 75,603 19,864 - 115,261
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
EBITDA 4,531 29,262 7,532 (1,157) 40,168
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
Depreciation, amortisation
and impairment (2,638) (12,266) (3,337) (409) (18,650)
Operating profit 1,893 16,996 4,195 (1,566) 21,518
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
Operating profit 21,518
Other losses (462)
Finance income 19
Finance costs (1,129)
Profit before tax 9,946
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
Tax (3,514)
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
Profit for the period 16,432
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
Capital expenditure (excluding
Right of Use assets) 1,725 7,595 3,933 1,136 14,389
-------------------------------- ------------------ ------------ ---------- ---------------- ---------
United
Asia Continental Kingdom
Pacific Europe & Ireland Corporate Total
12 months to 31 October
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Total revenue 39,945 187,897 41,996 - 269,838
- -
Inter segment sales - (10,058) - - 10,058)
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Revenue from external
customers 39,945 177,839 41,996 - 259,780
-------------------------------- ------------ ------------ ------------ ---------------- ----------
EBITDA 9,094 75,497 15,388 (7,738) 92,241
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Depreciation, amortisation
and impairment (7,136) (24,234) (3,868) (322) (35,560)
Operating profit/loss
excluding associates 1,958 51,263 11,520 (8,060) 56,681
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Operating profit 56,681
Other losses (1,176)
Finance income -
s (2,151)
Profit before tax 53,354
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Tax (14,561)
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Profit for the period 38,793
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Capital expenditure (excluding
Right of Use assets) 4,218 20,056 9,522 1,359 35,156
-------------------------------- ------------ ------------ ------------ ---------------- ----------
Total revenue from external customers is analysed below:
Six months Six months 12 months
to to to
30 April 30 April 31 October
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------- ----------- -----------
Total revenue from external customers:
Sales of equipment, spare parts &
consumables 9,524 9,779 20,459
Sales of services 1,546 1,746 3,895
11,071 11,525 24,355
Vending revenue 132,751 103,736 235,425
---------------------------------------- ----------- ----------- -----------
Total revenue 143,822 115,261 259,780
---------------------------------------- ----------- ----------- -----------
There were no key customers in the period ended 30 April 2023
(2022: none).
4. Other gains and losses
Other gains and losses comprise of transactions relating to
financial instruments held at FVTPL, other financial instruments
and the disposal of subsidiaries. They have been disclosed
separately in order to improve a reader's understanding of the
financial statements and are not disclosed within operating profit
as they are non-trading in nature.
Six months to Six months to 12 months to
30 April 30 April 31 October
2023 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------------------------------------- ---------------- ------------------ -------------
Other gains and losses
Gain/(loss) on disposal of subsidiary 57 (462) (459)
Fair value gain/(loss) on financial instrument held at FVTPL 111 - (330)
Loss on available for sale financial instruments - - (20)
Other gains/(losses) 23 - (367)
191 (462) (1,176)
------------------------------------------------------------- ---------------- ------------------ -------------
Six months to 30 April 2023
The Group generated a profit on disposal of GBP57,000 from the
disposal of its Korean subsidiary Photo-Me Korea Company Limited,
recognized in other gains in the income statement.
Six months to 30 April 2022
The Group incurred a loss on disposal of GBP462,000 from the
disposal of its Spanish subsidiary La Wash Group, recognized in
other losses in the income statement.
5. Taxation
Six months to Six months to 12 months to
30 April 30 April 31 October
2023 2022 2022
GBP'000 GBP'000 GBP'000
---------------------------- -------------- -------------- -------------
Profit / (loss) before tax 27,185 19,946 53,354
Total taxation charge (6,797) (3,514) (14,561)
Effective tax rate 25.0% 17.6% 27.3%
---------------------------- -------------- -------------- -------------
The tax charge in the Group Income Statement is based on
management's best estimate of the full year effective tax rate
based on expected 12 Months profits to 31 October 2023.
The UK main rate of corporation tax increased from 19% to 25% on
1 April 2023.
The Group undertakes business in multiple tax jurisdictions.
6. Dividends paid and proposed
30 April 2023 31 October 2022
----------------------------- -------------------------
pence GBP'000 pence GBP'000
per share per share
---------------------------------- ----------- ---------------- ----------- ------------
Dividends Paid
Special dividend
Approved by the Board on 18 July
2022 - - 6.50 24,572
Final dividend
2021 approved at AGM held on 29
April 2022 - - 2.89 10,925
Interim dividend
2022 approved by the board on
18 July 2022 2.60 9,829 - -
2.60 9,829 9.39 35,497
---------------------------------- ----------- ---------------- ----------- ------------
Dividends Proposed
Final dividend
2022 approved at AGM held on 28
April 2023 3.00 11,345 - -
Special dividend
2022 approved by the board on
20 April 2023 0.60 2,269 - -
3.60 13,613 - -
---------------------------------- ----------- ---------------- ----------- ------------
The Board proposed a final dividend of 3.00p per ordinary share
in respect of the year ended 31 October 2022, which was approved by
shareholders at the Annual General Meeting held on 28 April 2023
and paid on 12 May 2023.
The Board proposed an additional, special dividend of 0.60p per
ordinary share in respect of the year ended 31 October 2022, which
was approved by the Board on 20 April 2023 and paid on 19 May
2023.
7. Earnings per share
Diluted earnings per share amounts are calculated by dividing
the net earnings attributable to shareholders of the Parent by the
weighted average number of shares outstanding during the period
plus the weighted average number of shares that would be issued on
conversion of all the dilutive potential shares into shares. The
Group has only one category of dilutive potential shares being
share options granted to senior staff, including directors, as
detailed in note 8.
The earnings and weighted average number of shares used in the
calculation of earnings per share are set out in the table
below:
Six months to Six months to 12 months to
30 April 30 April 31 October
2023 2022 2022
---------------------------------------------------------- -------------- -------------- -------------
Basic earnings per share 5.39 4.35 10.26
Diluted earnings per share 5.34 4.35 10.23
---------------------------------------------------------- -------------- -------------- -------------
Earnings available to shareholders (GBP'000) 20,388 16,432 38,793
Weighted average number of shares in issue in the period
- Basic ('000) 378,152 378,012 378,052
- Including dilutive share options ('000) 381,795 378,012 379,100
8. Share based payments
The Group grants share options to senior staff, including
directors, allowing them to purchase Ordinary shares of 0.5p each.
As at 30 April 2023, the total number of options granted and within
their vesting period or available to exercise was 11,723,030.
All options can be exercised, in normal circumstances, within a
period of four years from the grant date, providing that the
performance criterion or performance condition has been achieved.
The subscription price for all options is based upon the average
market price on the three days prior to the date of grant. Options
are restricted, or may lapse, if the grantee leaves the employment
of the Group before the first exercise date.
All options are equity settled options.
Options granted after 2005 are covered by the new ME Group
Executive Share Option Scheme. The vesting of options is subject to
an EPS-based performance condition relating to the extent to which
the Company's basic EPS for the third financial year, following the
date of grant, reaches a sliding scale of challenging EPS targets.
Options are normally granted over shares worth up to 150% of a
participant's salary each year. In exceptional cases as part of the
terms of attracting senior management, options in excess of that
number may be granted.
In accordance with IFRS 2 Share-based Payments, share options
granted to senior management including directors after November
2002 have been fair-valued and the Company has used the
Black-Scholes option pricing model. This model takes into account
the terms and conditions under which the options were granted.
The charge for share-based payments in the six months to 30
April 2023 was GBP431,000.
9. Non-current assets: Goodwill, other intangibles, property,
plant and equipment and investment property
Goodwill Other Property, plant Investment
intangible & equipment property
assets
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------ --------- ----------- ---------------- -----------
Net book value at 1 November 2021 15,305 19,988 91,973 597
Exchange adjustment 159 (109) 1,092 10
Additions - photobooths & vending machines - - 27,205 -
Additions - other assets - 2,486 5,465 -
Additions - right of use assets - - 7,298 -
Additions - new subsidiaries 1,652 98 11 -
Transfers - - - -
Amortisation / Depreciation - (6,772) (32,219) (15)
(Impairment) / Reversal of impairment - - 3,443 -
Disposals at net book value - (71) (3,178) -
Net book value at 31 October 2022 17,116 15,620 101,090 592
Purchase price allocation adjustment (Note 13) (796) 814 - -
Net book value at 31 October 2022 (restated) 16,320 16,434 101,090 592
------------------------------------------------ --------- ----------- ---------------- -----------
Exchange adjustment 100 182 1,537 12
Additions - photobooths & vending machines - - 16,926 -
Additions - other assets - 1,372 2,841 -
Additions - right of use assets - - - -
Additions - new subsidiaries - - - -
Transfers - (69) 69
Amortisation / Depreciation - (2,309) (16,319) (8)
(Impairment) / Reversal of impairment - - (31) -
Disposals at net book value - (41) (1,333) -
Net book value at 30 April 2023 16,420 15,569 104,780 596
------------------------------------------------ --------- ----------- ---------------- -----------
10. Fair values of financial instruments by class
There is no difference between the fair values and the carrying
values of financial assets and financial liabilities held in the
Group's statement of financial position.
The Group holds an investment in Max Sight Group Holdings Ltd,
which as a listed company. This investment is valued at level 1.
The Group owns 109,972,500 Max Sight Group Holdings Ltd's shares
valued at 0,065 HKD per share as at 30 April 2023, giving a value
at that date of GBP788,643.
On 27 October 2022, the Group subscribed to 500,000 convertible
bonds in Energy Observer Developments SAS, a privately held
company. This investment is valued at level 3 as its value is
linked to the equity value of Energy Observer Developments SAS,
which is not observable market data. At 30 April 2023 the
investment is valued at EUR5,127,000 (GBP4,648,000), being the
EUR5,000,000 principal plus accrued interest. In the absence of
observable relevant market data, the bond's issue price plus
accrued interest is deemed to be the best measure of fair value.
There are no material Level 2 investments held by the Group or
Company
Financial instruments by category
The tables below show financial instruments by category held by
the Group.
At 30 April 2023 Fair Value
Loans and Through Total
receivables Profit &
Loss
GBP'000 GBP'000 GBP'000
----------------------------------- --------------------- --------------------- --------
Assets per statement of financial
position
Financial instruments held
at FVTPL - 5,437 5,437
Financial assets - held at
amortised cost:
Trade and other receivables 11,924 - 11,924
Cash and cash equivalents 113,057 - 113,057
124,981 5,437 130,418
--------------------- --------------------- --------
Other financial Total
liabilities
at
amortised
cost
GBP'000 GBP'000
----------------------------------- --------------------- --------------------- --------
Liabilities per statement
of financial position
Borrowings 88,649 88,649
Leases 13,216 13,216
Trade and other payables 52,072 52,072
153,937 153,937
--------------------- --------
At 30 April 2022 Fair Value
Loans and Through Total
receivables Profit & (Restated)
Loss
(Restated)
GBP'000 GBP'000 GBP'000
Assets per statement of financial
position
Financial instruments held
at FVTPL - 1,501 1,501
Financial assets - held at
amortised cost:
Trade and other receivables 18,423 - 18,423
Cash and cash equivalents 95,773 - 95,773
114,196 1,501 115,697
Other financial Total
liabilities
at
amortised
cost
GBP'000 GBP'000
Liabilities per statement
of financial position
Borrowings 53,603 53,603
Leases 13,585 13,585
Trade and other payables 41,400 41,400
108,588 108,588
At 31 October 2022 Fair Value
Loans and Through Total
receivables Profit & (Restated)
Loss
(Restated)
GBP'000 GBP'000 GBP'000
----------------------------------- --------------------- --------------------- -----------
Assets per statement of financial
position
Financial instruments held
at FVTPL - 5,239 5,239
Financial assets - held at
amortised cost:
Trade and other receivables 11,434 - 11,434
Cash and cash equivalents 135,200 - 135,200
146,634 5,239 151,873
--------------------- --------------------- -----------
Other financial Total
liabilities
at
amortised
cost
GBP'000 GBP'000
----------------------------------- --------------------- --------------------- -----------
Liabilities per statement
of financial position
Borrowings 102,163 102,163
Leases 15,923 15,923
Trade and other payables 52,248 52,248
170,334 170,334
--------------------- -----------
11. Inventories
Unaudited Unaudited Audited
30 April 30 April 31 October
2023 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------- ---------- ---------- -----------
Raw materials and consumables 24,884 15,857 18,774
Finished goods 8,711 5,880 6,717
------------------------------- ---------- ---------- -----------
33,595 21,737 25,491
------------------------------- ---------- ---------- -----------
At 30 April 2023 the Group held a high volume of spare parts and
materials, in preparation for upcoming machine upgrades and
refurbishments. Inventory of new machines also increased versus 30
April 2022 and 31 October 2022 levels.
12. Net cash
Unaudited Unaudited Audited
30 April 30 April 31 October
2023 2022 2022
(Restated) (Restated)
GBP'000 GBP'000 GBP'000
---------- ----------- -----------
Cash and cash equivalents per statement of financial position 113,057 95,773 135,200
Non-current borrowings (59,836) (34,673) (72,365)
Current borrowings (28,813) (18,930) (29,799)
--------------------------------------------------------------- ---------- ----------- -----------
Net cash 24,408 42,170 33,036
--------------------------------------------------------------- ---------- ----------- -----------
At 30 April 2022 and 31 October 2022 certain restricted deposits
were included in net cash which have now been reclassified to other
receivables. Comparative figures have been restated to show net
cash excluding the restricted deposits. The value of restricted
deposits reclassified out of net cash was GBP984,000 at 30 April
2022 and GBP985,000 at 31 October 2022. The value of restricted
deposits included in other receivables at 30 April 2023 was
GBP985,000.The restatement had no impact on opening retained
earnings or prior period EPS.
Cash and cash equivalents per the cash flow comprise cash at
bank and in hand and short-term deposit accounts with an original
maturity of less than three months, less bank overdrafts.
Net cash is a non-GAAP measure since it is not defined in
accordance with IFRS but is a key indicator used by management in
assessing operational performance and financial position strength.
The inclusion of items in net cash as defined by the Group may not
be comparable with other companies' measurement of net cash/debt.
The Group includes in net cash: cash and cash equivalents and
certain financial assets (mainly deposits), less instalments on
loans and other borrowings.
The table above, which is not currently required by IFRS,
reconcile the Group's net cash to the Group's statement of cash
flows. Management believes the presentation of the tables will be
of assistance to shareholders.
13. IFRS3 Business Combinations
Dreamakers
On 31 March 2022 the Group acquired 100% of the issued share
capital of Dreamakers for a consideration of EUR3,900,000
(GBP3,274,000), obtaining control of the company on that date.
Dreamakers, which operates under the trading name 'VIP BOX', is
a France based, market leader in the rental and sale of selfie
stations for private and professional events. This acquisition
supports the Group's strategic aim of product diversification. The
acquisition was funded from the Group's cash resources.
Due to the proximity of the transaction to the prior period
reporting date, the purchase price allocation, including
determination of the fair value of intangible assets recognised on
consolidation, had not been finalised when the prior period
financial statements were approved.
With the purchase price allocation now complete, the Group has
during the period adjusted the provisional amounts that were
recorded in the prior period financial statements by increasing
intangible assets by EUR929,000 (GBP814,000) and reducing goodwill
by the same amount (see note 9).
As part of the purchase price allocation, the Group has
recognised separately identifiable acquired intangible assets in
accordance with IAS38 and had their fair values assessed by an
independent expert.
The fair value adjustments in respect of acquired intangible
assets are due to the recognition of EUR255,000 (GBP223,000) in
respect of Dreamakers' marketing database; EUR190,000 (GBP166,000)
in respect of contractual customer relationships and order backlog;
and EUR484,000 (GBP425,000) in respect of brand related assets.
The balance of residual goodwill is EUR1,060,000
(GBP929,000).
A deferred tax liability of EUR21,000 (GBP18,000), in respect of
the order backlog intangible asset, has been recognised and
reflected in the adjusted goodwill value.
14. Changes to the composition of the Group
Disposal of Photo-Me Korea
On 30 November 2022 the group disposed of its South Korean
subsidiary, Photo-Me Korea Company Limited. This was for
consideration of GBP209,000. The group generated a profit of
GBP57,000 which has been recognised in other gains in the income
statement.
15. Events after statement of financial position date
On 3 July 2023, the Group's Japanese subsidiary, ME Group Japan
K.K. entered into a binding conditional agreement to buy the
automated-photobooth business owned and operated by two
subsidiaries of FUJIFILM Corporation in Japan.
The total transaction consideration is approximately GBP5.5
million (Japanese Yen 996 million) and is capped at that amount but
may reduce subject to an adjustment mechanism under the binding
conditional agreement. The Group expects to fund the transaction by
means of a new local loan facility on commercially advantageous
terms. Should this not be available, the Group will fund the
transaction from its existing cash resources. The Group believes
that the Transaction will complete by the end of September 2023
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
HALF-YEARLY FINANCIAL REPORT
We confirm that to the best of our knowledge:
-- The condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- The Interim Management Report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed set of financial statements and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or performance of the
entity during that period and any changes in the related party
transactions described in the last annual report that could do
so.
By order of the Board
Sir John Lewis OBE (Non-executive Chairman)
Serge Crasnianski (Chief Executive Officer and Deputy
Chairman)
12 July 2023
INDEPENT REVIEW REPORT
We have been engaged by Me Group International PLC ("the
Company") to review the financial information for the six months
ended 30th April 2023 which comprises the Group Condensed Statement
of Comprehensive Income, the Group Condensed Statement of Financial
Position, the Group Condensed Statement of Cash Flows and the Group
Condensed Statement of Changes in Equity and the related
explanatory notes. We have read the other information contained in
the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial
information.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
issued by the Auditing Practices Board and our Engagement Letter
dated 5th July 2023. Our work has been undertaken so that we might
state to the Company those matters we are required to state to them
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review
work, for this report, or for the conclusions we have formed.
Responsibilities of directors
The interim report, including the financial information
contained therein, is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the
interim report in accordance with International Accounting Standard
34, 'Interim Financial Reporting', in accordance with Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority which requires that the interim report must be
prepared and presented in a form consistent with that which will be
adopted in the company's annual accounts having regard to the
accounting standards applicable to such annual accounts.
In preparing the half-yearly financial report, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Responsibilities of auditors
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusion, including our Conclusions Relating to Going Concern,
are based on procedures that are less extensive than audit
procedures.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed financial information in
the interim report does not give a true and fair view of the
financial position of the Company as at 30th April 2023 and of its
financial performance and its cash flows for the six months then
ended, in accordance with International Accounting Standard 34,
'Interim Financial Reporting and Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Signed:
Mazars LLP
Chartered Accountants
30 Old Bailey
London
EC4M 7AU
Date: 12 July 2023
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR EANXFFDNDEFA
(END) Dow Jones Newswires
July 12, 2023 02:00 ET (06:00 GMT)
ME (AQSE:MEGP.GB)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
ME (AQSE:MEGP.GB)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
