Sorry picture for Photo-Me

18-12-2007

Sorry picture for Photo-Me
Photo booth operator Photo-Me has reported a sharp fall in half-year profits and warned it is "unlikely to be profitable" in the second-half.

In a statement today the company confirmed its underlying pre-tax profit for the six months to October 31st was £7.3 million, 39 per cent lower than the £11.9 million reported for the same period of 2006.

Photo-Me also reported a three per cent fall in half-year revenues, which dropped to £107.1 million.

Operating profit at the company's principal vending division, which includes its photo booth operations, was down 21 per cent to £10.9 million over the period.

The fall was accompanied by a one per cent drop in revenues for the unit, which slumped to £79.1 million in an "adverse vending environment".

Photo-Me also revealed its manufacturing operations made a pre-exceptional operating loss of £0.5 million, compared to a profit of £1 million for the same period of 2006.

The company said the profit fall was shared between its minilabs and wholesale photo labs, with the drop in the latter reflecting the impact of a delayed product launch.

Photo-Me, which warned last month its full-year results were unlikely to meet market expectations, claimed it had been faced with the "distraction" associated with the abandoned sale of its vending division and restructuring at the company.

The photo firm abandoned the planned sale of its vending business in September, after failing to find a buyer, while the company was also recently forced by activist shareholders to replace both its chairman and chief executive.

Current Photo-Me chairman David Young said the firm "had to contend with the unsettling effect on customers, staff and suppliers of the related uncertainty and also of the unsought prominence of the group's corporate affairs".

He added: "In these circumstances, the pre-exceptional result for the half-year, whilst lower than that for the half-year to October 31st 2006, is disappointing but understandable."

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