Profit Before Tax is also up despite a decline in photobooth takings, with its laundry business the main driver of growth.
Companies: ME Group International plc
Photo-Me International (LON: PHTM) has announced its Interim results for the first half of FY18 which show strong growth in its laundry business but declining takings in its core Photobooth division.
On a reported basis Revenues grew 10.5% to £122m and reported EBITDA grew 11%, bolstered by the Group's acquisition of Inox in July and favourable currency tailwinds.
The Group has operations covering photobooths, photo printing kiosks and laundry services, with over 47,000 sites in 18 countries.
Takings in its Printing Kiosk operations have declined and Management has flagged £2m in costs to help restructure the division to include more automated sites.
Its Laundry division has been the main driver of growth, reporting Revenue growth of 75% to £17m. Management said they expect Revenues from its laundry sites to represent half of total Revenues "in the medium term".
In its Photobooth division, the Group plans to install 300 new sites that enable customers to digitally upload passport photos for online passport applications.
An Interim dividend of 3.7p will be issued, up 20% from H1 16.
Brokers finnCap and N+1 Singer both released notes today, outlining their views on the Group's future. finnCap's note commented:
"With accretion from Inox offset by the restructuring of Photo-Me Retail, we leave existing forecasts and 215p PT (22x FY18 adj. EPS) unchanged. Forecast DPS growth for FY18 remains an attractive 20%."
"We make no changes to our forecasts today. With H1 now reported and in line, we highlight the inflection underway in underlying profit. Our £51m PBT implies 14.7% growth in H2 (i.e. c12% at CER vs -2% in H1). Of particular importance is 1) a pick-up in UK Photo/ID performance due to imminent regulation change, which PHTM has played a key part in, and recent price increases, plus 2) higher than expected performance from Laundry... We maintain a target of 225p. Buy."
The Group currently trades at a forecast PE ratio of 18x, slightly above the industry median of 16x, and has a 12-month forecast dividend yield of 4%.
Image: Proactive Investor
