Photo-Me International PLC (LON:PHTM) issued a profit warning as consumer demand for its vending equipment and services has remained “severely impacted” by the coronavirus pandemic.
With the Group's instant-service photo booths and children's rides typically situated in railway stations and shopping centres, the return of government lockdown restrictions and ongoing constraints on international travel have hurt the business after a “slight return” of consumer activity in the summer.
Group revenue for the six months to the end of October 2020 is expected to be down 26% on the same time last year with profit before tax for the 18-month period to end-October expected to be roughly £0.5mln.
However, the group said it was cash flow positive in the period and ended the period with a net cash balance of £22mln. It has agreed to new banking covenants to give it more flexibility, it added.
Revenue from photobooths has fallen 26% since the start of May while the smaller children's rides business was even more deeply affected.
However, its Revolution laundry machines have been resilient, with average revenue down just 2% compared with the same period last year, leading management to instal 203 machines since May.
In another effort at diversification, new “professional apple and pineapple juice machines” have been developed and are undergoing market testing with “promising results” in a number of locations across France and Belgium.
Furthermore, directors plan to reduce the number of photo booths by around 17%, with almost 5,000 unprofitable photobooths and children's rides being sold or scrapped across the UK, Europe, China and South Korea.
