TIDMPHTM
RNS Number : 4587P
Photo-Me International PLC
10 June 2020
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
10 June 2020
Photo-Me International plc
("Photo-Me" or "the Group")
Trading Update
Photo-Me International plc (PHTM.L), the instant-service
equipment group, announces an update on the Group's trading for the
12 months ended 30 April 2020 and its cash position.
Trading Update
As previously announced, the COVID-19 pandemic has severely
impacted all the Group's end markets, and the majority of expected
Group revenue in March and April did not materialise. Trading has
also been weaker in Asia (especially China) since the second part
of January to date.
Consequently, the Group's overall trading performance for the
four months ended 30 April 2020 was significantly affected. Total
Group revenue is now expected to be 5.5% lower than in the previous
12 months to 30 April 2019. Profit before tax before deduction of
the provisions detailed below is expected to be approximately GBP28
million, compared with GBP42.6 million for the 12 months to 30
April 2019, with a similar reduction in operating cash flows.
The Board has acted (and continues to act) to mitigate the
impact of the current environment on the business and to preserve
cash. Steps taken to date include reducing capital expenditure;
utilising governmental support schemes available to the Group, such
as furloughing employees through job retention schemes, deferring
repayment of loans and withdrawal of the interim dividend payment
to shareholders. All members of the Board will take a voluntary 20%
reduction in salary, from 1 July 2020 to at least the end of
December 2020, and bonus payments for all management are being
reviewed.
Nevertheless, the Group has decided to include provisions of
GBP14 million to GBP18 million, which mainly relates to impairment
of goodwill and write down of the carrying value of non-profitable
machines due to the disruption caused by the unprecedented COVID-19
situation. This also includes a provision for the anticipated cost
of a major reorganisation of Photo-Me's UK business which has
experienced a significant loss in identification revenue, due to
reduced consumer activity. The Government's policy to accept photos
taken at home for passport identification, has taken a significant
part of Photo-Me's market share for ID photos. In response to this
and the challenging COVID-19 trading environment, the Group plans
to restructure its UK operations. The Group also plans to
restructure its operations in China and South Korea. In addition,
there are provisions for receivables from customer defection, and
installation of security tools in the photobooths.
Profit before tax for the 12 months ended 30 April 2020
(including the provision of GBP14 million to GBP18 million) is now
expected to be in the range of GBP10 million to GBP14 million.
Update on funding and liquidity
As at 30 April 2020, the Group had gross cash of GBP66.5
million, drawn debt facilities of GBP58.5 million (to be repaid by
April 2025), resulting in a net cash balance of GBP8 million.
Since the end of April 2020, the Group has obtained additional
debt funding to ensure that it has sufficient liquidity during this
uncertain period. A EUR30 million loan was secured with three
French banks participating under the French government-backed "PGE"
scheme. The Group has the right to make the loan repayment after
one and within five years without penalty.
The Group continues to comply with all its banking covenants
.
With this additional funding in place, the Board believes that
the Group has the financial resources to ensure it has sufficient
liquidity available and anticipates it will continue to operate
within its banking covenants, subject to a modest improvement in
trading conditions over the coming months.
Looking forward
As previously announced on 27 March 2020, the Board has
withdrawn current market guidance until more clarity is known
around the outlook of the business becomes clearer.
Since the period end, total Group revenue has remained at the
lower levels seen in March and April. The ongoing governmental
travel bans and restrictions on the movement of people continue to
reduce demand significantly for photo ID via photobooths as well as
the use of children's rides, which together account for
approximately 63% of Group revenue. The Board is reasonably
confident that as lockdown restrictions are eased, consumer demand
will return; however, it is likely it will take time to recover to
pre-COVID-19 levels. The Group continues to diversity its
operations through its Laundry and KIS Food business areas.
The Board continues to closely monitor the COVID-19 situation as
lockdown measures are eased and will review its options and take
further action where possible to restructure the business and align
operations to the current market conditions and consumer activity
levels.
As announced, the Board has extended the Group's current
financial year end to 31 October 2020. The Group intends to
announce an interim statement from 1 May 2019 to April 2020 on 7
July 2020.
ENQUIRIES
Photo-Me International plc +44 (0) 1372 453 399
Serge Crasnianski, CEO
Stéphane Gibon, CFO
Hudson Sandler +44 (0) 20 7796 4133
Wendy Baker/ Emily Dillon/ Nick Moore photo-me@hudsonsandler.com
NOTES TO EDITORS
Photo-Me International plc (LSE: PHTM) operates, sells and
services a wide range of instant-service vending equipment,
primarily aimed at the consumer market.
The Group operates vending units across 18 countries and its
technological innovation is focused on three principal areas:
-- Identification: photobooths and integrated biometric identification solutions
-- Laundry: unattended laundry services, launderettes, B2B services
-- Kiosks: high-quality digital printing
The Group entered the self-service fresh fruit juice equipment
market in April 2019, with the acquisition of Sempa. T his will
become a key business area ('KIS Food') alongside Identification,
Laundry and Kiosks, and will be a significant part of the Group's
future growth strategy.
In addition, the Group operates vending equipment such as
children's rides, amusement machines and business service
equipment.
Whilst the Group both sells and services this equipment, the
vast majority of units are operated and maintained by Photo-Me.
Photo-Me pays the site owner a commission based on turnover, which
varies depending on the country and location of the machine.
The Group has built long-term relationships with major site
owners and its equipment is generally sited in prime locations in
areas of high footfall such as supermarkets, shopping malls
(indoors and outdoors) and public transport venues. The equipment
is maintained and serviced by an established network of 700 field
engineers.
The Company's shares have been listed on the London Stock
Exchange since 1962.
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END
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