September 12, 2008

Photo kiosks : Photo-Me Posts Loss

Sept. 12 (Bloomberg) -- Photo-Me International Plc, the U.K. operator of 21,400 photo booths, said business in July was ``disappointing'' and economic conditions in its main markets are ``depressed.''

Photo-Me in July posted a full-year net loss of 19.9 million pounds ($35.2 million) compared with a profit of 7.8 million pounds a year earlier. A shareholder revolt succeeded in ousting the company's board including Chief Executive Officer Serge Crasnianski and Chairman Vernon Sankey in 2007. Thierry Barel was appointed CEO in December and has since cut staff, streamlined logistics and added new services in an effort to return the company to profit.

``Reducing the debt is our priority,'' Barel said today in a phone interview. Photo-Me expects net debt to be ``in the region'' of 25 million pounds at the end of the fiscal year from 45.5 million pounds a year earlier, he said. As of July 31, net debt was 45.1 million pounds, compared with 38 million pounds a year earlier, Photo-Me said today in a regulatory statement.

Revenue in May and June, adjusted for currency swings, ``slightly'' increased, said Photo-Me in the statement. Revenue and profit for the three months ended July 31 were in ``line'' with the company's forecasts. Photo-Me did not give any financial details.

Photo-Me fell 0.25 pence, or 1.8 percent, to 13.5 pence as of 9:21 a.m. in London. The stock has fallen 58 percent this year, trimming the company's market value to 48.6 million pounds.

`Seasonal Business'

``Photo-Me is a seasonal business,'' the Bookham, England- based company said today in the statement distributed by the Regulatory News Service. ``The first quarter contributes an insubstantial amount to annual profit.''

Hardman & Co analysts Roger Hardman and Yvette Riachi estimated in a note on July 16 that Photo-Me will have net debt of 22.2 million pounds by April 30, 2009. Barel said the estimate was ``optimistic.'' Hardman, who does not rate the stock, said the company's debt may be eliminated by April 2010.

``We are pretty confident that the cash situation is improving on a daily basis,'' Barel said. ``Hopefully we will generate more net cash than last year.'' Barel declined to say how much costs will be reduced by in the current fiscal period.

The company, which generates most of its turnover from photo booths, has added new services and expanded kiosk sites as European countries introduce passports and identity cards with biometric features. Photo-me is in talks with 10 companies about developing new services, Barel said.

As of April 30, 2008, the company operated 42,580 vending sites worldwide, about half of which were photo-booths. Digital kiosks amounted to 4,500 sites. Other services included entertainment machines for children, copiers and self-service launderettes. The company plans to add at least 700 kiosks in the current fiscal year, Barel said.

Posted by staff at September 12, 2008 07:22 AM