TIDMPHTM

RNS Number : 8906S

Photo-Me International PLC

19 July 2022

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.

19 July 2022

Photo-Me International plc

("Photo-Me", "ME Group", "the Group" or "the Company")

INTERIM RESULTS FOR THE SIX MONTHSED 30 APRIL 2022

Strong half-year performance underpins full year outlook ahead of expectations

ME Group name change to better reflect diversification focus and business strategy

Photo-Me International plc (PHTM.L), the instant-service equipment group, announces its results for the six months ended 30 April 2022 (the "Period").

Results summary

 
                                                    Reported 
                                   Six months ended  Six months ended  Change 
                                      30 April 2022     30 April 2021 
                                   ----------------  ----------------  ------ 
Revenue                                   GBP115.3m          GBP94.6m   21.9% 
                                   ----------------  ----------------  ------ 
EBITDA (excluding associates)(1)           GBP40.2m          GBP28.7m   40.1% 
                                   ----------------  ----------------  ------ 
Reported profit before tax                 GBP19.9m          GBP12.0m   65.8% 
                                   ----------------  ----------------  ------ 
Adjusted profit before tax(2)              GBP16.0m          GBP12.9m   24.0% 
                                   ----------------  ----------------  ------ 
Profit after tax                           GBP16.4m           GBP9.4m   74.5% 
                                   ----------------  ----------------  ------ 
Cash generated from operations             GBP29.8m          GBP22.4m   33.0% 
                                   ----------------  ----------------  ------ 
Gross Cash                                 GBP96.8m          GBP95.3m    1.6% 
                                   ----------------  ----------------  ------ 
Net cash                                   GBP43.2m          GBP16.9m  155.6% 
                                   ----------------  ----------------  ------ 
Earnings per share (diluted)                  4.35p             2.49p     N/A 
                                   ----------------  ----------------  ------ 
Interim dividend per Ordinary                  2.6p               nil     N/A 
 share 
                                   ----------------  ----------------  ------ 
Special dividend per Ordinary                  6.5p               nil     N/A 
 share 
                                   ----------------  ----------------  ------ 
 

(1) EBITDA is Reported profit before tax, less total depreciation and amortisation, less other net gain, finance costs and income.

(2) Adjusted profit before tax for the six months to 30 April 2022 is profit before tax adjusted to exclude profit on sale of property and loss on disposal of subsidiary La Wash

(3) Refer to note 8 for the reconciliation of net cash to cash and cash equivalents as per the financial statements.

Financial summary

-- Revenue was up 21.9% to GBP115.3 million (H1 2021: GBP94.6 million), resulting mostly from the continued easing of Covid-19 related restrictions across the Group's key operating markets and subsequent positive impact of increased demand for passports and other official documentation

   --   EBITDA increased by 40.1% to GBP40.2 million (H1 2021: GBP28.7 million) 
   --   Reported profit before tax increased by 65.8% to GBP19.9 million (H1 2021: 12.0 million) 
   --   Cash generated from operations was up 33.0% to GBP29.8 million (H1 2021: GBP22.4 million) 
   --   Net cash position of GBP43.2 million, an increase of 155.6% (30 April 2021: GBP16.9 million) 

Operational summary

-- Photobooth business saw a stronger than anticipated recovery as travel and social restrictions were eased. Revenue was up 27.4% which is a testament to the resilience of the photobooth market

-- Laundry division operations continued to perform well with total laundry revenue (Revolution laundry operations and sale of machines) up 8.4% to GBP25.9 million

-- Expansion of Revolution laundry operations continued and revenue was up 37.5% to GBP25.3 million. The total number of Revolution units in operation grew by 15.9%

-- Continued focus on new product innovation and diversification of operations to meet ever-changing consumer needs, with new products launched and technology partnerships announced

-- ME Group corporate brand rolled out across the majority of operations - plan to change listed entity name shortly, to align to the new corporate brand strategy and reflect broader based concession offer.

Outlook

-- Expect performance for the year ending 31 October 2022 to show revenue growth of at least 20% compared with FY 2021

-- EBITDA to be in the range of GBP79 to GBP84 million, assuming that Covid-19 or other social restrictions are not re-imposed in our key markets

   --   Adjusted profit before tax expected to be in the range of GBP47 million to GBP50 million 

Serge Crasnianski, CEO and Deputy Chairman, said:

"We are proud to announce an extremely strong first half performance, ahead of the Board's expectations. Demand for our machines continues to grow at pace, as economies reopen and confidence returns among consumers globally, and we are working hard to keep up with evolving trends and consumer needs.

We look forward to maintaining this strong growth as we celebrate our 60(th) year as a listed company, investing strongly in innovation and rapidly upgrading to the next generations of our machines across all business areas, including photobooths, laundry and food vending. The opportunities for the Group and our consumers are endless, supported by our ME Group corporate brand which better reflects our strategic diversification. Our plans to change the listed entity name later this year will be an important start to the next chapter of our growth story.

We are also very pleased to reward our loyal shareholders with a special dividend this year as a result of the Company's strong cash position, particularly after the freeze on dividends during the worst of the pandemic. This along with our progressive dividend policy reflects the Board's optimism for the future.

"We are grateful to all our partners and our employees who have helped us throughout the challenges posed by Covid-19. The Board believes that the Group's ability to come through the pandemic in such good shape and increase its profitability is testimony to the strong fundamentals of the Group and its resilience in the face of adverse economic headwinds. "

Enquiries:

 
 Photo-Me International plc                     +44 (0) 1372 453 399 
                                                 ir@photo-me.co.uk 
 Serge Crasnianski, Chief Executive & Deputy 
  Chairman 
 Stéphane Gibon, Chief Financial Officer 
 Hudson Sandler                                 +44 (0) 20 7796 4133 
                                                 photo-me@hudsonsandler.com 
 Wendy Baker / Charlotte Cobb / Nick Moore 
 

An investor presentation will be available to download later today at www.me-group.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 20 countries and its technological innovation is focused on four principal areas:

   --    Photo.ME   - Photobooths and integrated biometric identification solutions 
   --    Wash.ME   - Unattended laundry services and launderettes 
   --    Print.ME     - High-quality digital printing kiosks 
   --    Feed.ME    - Vending equipment for the food service market 

The Group entered the self-service fresh fruit juice equipment market in April 2019, with the acquisition of Sempa, and the acquisition of SGER (Resto'clock) in June 2021, a French Pizza vending equipment company for the self-service food equipment market. Feed.ME will become a key business area - alongside photobooths and identification (Photo.ME), laundry (Wash.ME), and printing kiosks (Print.ME) - and is a significant part of the Group's future growth strategy.

In addition, the Group operates other vending equipment such as children's rides, amusement machines, and business service equipment.

Whilst the Group both sells and services this equipment, the majority of units are owned, operated and maintained by Photo-Me International plc. The Group pays the site owner a commission based on turnover, which varies depending on the country, location and the type 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), public transport hubs, and administration buildings (City Halls, Police etc.). Equipment is maintained and serviced by an established network of 650 field engineers.

The Company's shares have been listed on the London Stock Exchange since 1962.

ME Group is a trademark and trading name of Photo-Me International plc.

www.me-group.com

CHAIRMAN'S STATEMENT

The Group's first half performance was ahead of the Board's expectations, with a strong recovery seen across all operating markets, except for Asia. The easing of restrictions and the ability for consumers to socialize and travel created strong demand for our services, driving demand for photo ID and laundry services. We are pleased to report that trading has now returned to pre-pandemic levels in Continental Europe, the UK and the Republic of Ireland.

We have a proven and stable concessions-based business model. Our dominant market positions in unique locations give us pricing power to mitigate inflationary pressures in the markets where we operate. Our established and long-standing partnerships offer long-term contracts for siting our machines. Generally, in 90% of cases these contracts are renewed by tacit renewal. Alongside our track record of innovation and new product development the Group is well positioned to grow the number of units in operation in each of its core divisions, increasing the yield per machine and attracting new users to our breadth of instant service equipment. This means a significant profit before tax contribution is made with marginal increases in revenues, which is boosted by appropriate marketing capex and commercial improvement of our machines across all our territories.

Innovation and growth strategy

The Group's strong first half performance was driven predominantly by the post-Covid recovery however the Directors believe that the Company's growth moving forward will be driven more by the ME Group growth strategy, which is focused on diversifying our operations through innovation and new technologies to meet the ever-changing needs of our customers and consumers. We leverage our in-house R&D capabilities in France (primary facility), Vietnam and Japan and our 50-strong team of dedicated engineers. Our services are centered on providing a state-of-the-art user experience underpinned by technology, and an omnichannel approach across our vending estate.

Good strategic progress was achieved in the Period, with a focus on our key investment priorities of (i) creation of the next generation photobooths; (ii) continued expansion of laundry operations; and (iii) growth of our food vending equipment business. Each of these areas of investment increases the asset base of the Company and establishes long-term revenue streams for the Company moving forward.

Notably in the Period, the number of Revolution laundry units in operation increased by 15.9% to 4,360. Further fresh juice machines were installed and the rollout of pizza vending machines accelerated and averaged 20 per month.

As anticipated, the contribution from laundry and food vending equipment operations has increased as a proportion of the Group's total revenue and EBITDA. This is a trend the Board expects to continue moving forward, providing a more balanced revenue profile.

In addition to the above, the Board will continue to identify selected bolt-on acquisitions which meet its return-on-investment criteria. Any acquisitions will be in line with the growth strategy of the Company, as set out above. It will also consider opportunities to extend the Group's footprint into new European markets, with the Group having recently entered Italy, Finland and Australia.

Further details are set out in the Chief Executive's Business and Financial Review.

ME Group corporate brand

Adoption of our new corporate brand, ME Group, which is a trademark and trading name of Photo-Me International plc, continued apace and with most subsidiary companies now operating under the ME Group name. This new identity supports our growth strategy and better reflects the diversity of the Group's operations today. It also enhances our brand proposition amongst our consumers and customers.

The Group plans to change its listed entity name, to align to the new corporate brand strategy, in autumn 2022. The proposed name change reflects the transition of the Company from one that has historically been viewed as a consumer product and services company, predominantly based around the ownership of photobooths, into a broader based infrastructure company targeting multiple revenue streams.

Corporate responsibility

We remain committed to strengthening our CSR activity to deliver our goals through inventing eco-responsible local services to support growth by integrating social, environmental, and economic expectations into our strategy and operations. Details of our CSR approach and KPIs is available on the Group's website me-group.com.

Dividends

Given the strong performance of the Company since the end of Covid restrictions including during the six months ended 30 April 2022 set out above, and the Board's confidence in the future performance of the Company, the Board is pleased to announce that it is adopting a distribution policy under which for the foreseeable future it will pay annual dividends in excess of 50% of its annual profits after tax subject to market and capital requirements. This total will be split between interim dividends (1/3) (generally to be paid in the month of November) and final dividends (2/3) (generally to be paid in the month of May).

The Board has therefore declared an interim dividend for the six-month period ended 30 April of 2.6 pence per Ordinary Share (the "Interim Dividend"), payable on 3 November 2022 to shareholders on the register at 14 October 2022, the ex-dividend date being 13 October 2022.

The Board is also pleased to announce that it has approved an additional return of approximately GBP24.57 million to shareholders by way of a special dividend of 6.5 pence per ordinary share (the "Special Dividend") which will be payable on 1 September 2022 to shareholders on the register at 12 August 2022, the ex-dividend date being 11 August 2022. The Directors would like to thank all shareholders who supported the Company during the Covid pandemic and feel a special dividend, at this time, is an appropriate way to return excess capital. This Special Dividend is in addition to the Interim Dividend, which totals GBP9.84 million, and the anticipated final dividend for the year ending 31 October 2022.

The level of the Special Dividend takes into account:

   1.    The Group's capital expenditure programme 
   2.    The intention to maintain a progressive dividend policy 
   3.    The level of distributable reserves available to pay dividends 
   4.    The likelihood of making acquisitions 

The Board and Executive team

There have been several changes to the composition of the Board of Directors. On 29 April 2022, Jean-Marcel Denis resigned as a Non-executive Director with immediate effect. René Proglio, Non-executive Director and member of the Audit Committee succeeded Mr Denis as Chairman of the Audit Committee. On 16 May 2022, Sigieri Diaz Della Vittoria Pallavicini resigned as an Independent Non-executive Director for personal reasons with immediate effect.

On behalf of the Board, I would like to extend our sincere thanks to Jean-Marcel for his years of dedicated and loyal service and to Sigieri for his contribution to the Group. We wish them both all the best for the future.

The Group has a strong Board of Directors, which for some time has been focused on succession for both Executive and Non-executive Directors, and the management team. Our Corporate Governance structure enables the leadership team to work together closely to deliver our growth strategy. Our Strategic Committee chaired by Jean-Marc Janailhac, is focused on delivering our strategy and future developments, new products, new joint ventures, communication and marketing, commercial, sales force and training, maintenance, productivity, quality and training - all drivers of our growth strategy.

Looking ahead

Trading in the first half was strong and ahead of initial expectations, which was achieved against a backdrop of continued economic and consumer uncertainty across many of our operating markets. Cost pressures are being experienced across many industries and the Group is not immune to these. We have seen a significant increase in supply chain and raw materials costs. Nonetheless, our strong proposition and market position gives the Group significant pricing power. This will help to limit the impact of these headwinds on the Group's financial performance in the second half and FY23 whilst we continue to innovate and diversify our operations and attract new customers and consumers.

As previously announced, the Board believes that following the strong first half the Group's performance for the year ending 31 October 2022 will show revenue growth of not less than 20% compared with FY 2021 whilst EBITDA is now expected to be in the range of GBP79 to GBP84 million and adjusted profit before tax is expected to be in the range of GBP47 million to GBP50 million, assuming that Covid-19 or other social restrictions are not re-imposed in our key markets.

CHIEF EXECUTIVE'S BUSINESS AND FINANCIAL REVIEW

Financial performance

Reported revenue for the six months ended 30 April 2022 was GBP115.3 million, an increase of 21.9% compared with the six months ended 30 April 2021 ("H1 2021"), mainly driven by a strong recovery across our markets in Continental Europe, the UK and the Republic of Ireland. Trading in Asia was more subdued due to endemic Covid-19 cases remaining at a higher level and consequently social restrictions remaining in place for a longer period of time.

The performance of our laundry operations was very strong, with revenue up 8.4% compared with H1 2021. Our photobooth business benefitted from pent-up demand for passports and other official documents and product delivered via our photobooth estate. This resulted in revenue increasing by 27.4%.

Reported EBITDA (excluding associates) increased by 40.1% to GBP40.2 million (H1 2021: GBP28.7 million), which delivered an EBITDA margin of 34.9% (H1 2021: 30.3%).

Reported profit before tax was 65.8% higher at GBP19.9 million (H1 2021: GBP12.0 million). Adjusted profit before tax (after specific items) was up 24.0% to GBP16.0 million (H1 2021: GBP12.9 million).

The table below provides a reconciliation of reported profit before tax to adjusted profit before tax.

 
                                                     Six months      Six months 
                                                 ended 30 April           ended 
                                                           2022   30 April 2021 
----------------------------------------------  ---------------  -------------- 
Reported profit before tax                             GBP19.9m        GBP12.0m 
 Specific items - restructuring costs                         -         GBP0.3m 
 Specific items - impairments                                 -         GBP1.3m 
 Specific items - sales of Inox assets                        -       GBP(0.7)m 
 Specific items - sale of property, provisions        GBP(4.4)m               - 
 Other losses - loss on La Wash disposal                GBP0.5m               - 
Adjusted profit before tax                             GBP16.0m        GBP12.9m 
----------------------------------------------  ---------------  -------------- 
 

The Group remained cash flow positive, with significantly improved cash generated from operations of GBP29.8 million (H1 2021: GBP22.4 million).

We continue to invest in future growth. Excluding intangibles, capital expenditure was GBP14.4 million, mainly related to laundry capex of GBP8.5 million and investment in VIP box of GBP1.3 million (H1 2021: GBP22.5 million). Capex decreased for two reasons in the Period. Firstly, photobooth capex was temporarily kept at a low level ahead of significant investment when the next generation machines are ready to be installed. Secondly, the rate of Revolutions installations slowed down due to supply chain constraints.

Funding and liquidity

As at 30 April 2022, the Group had gross cash of GBP96.8 million and a net cash balance of GBP43.2 million. The Group continues to comply with its banking covenants. We did not have the benefit of any government facilities in the Period.

The Board continues to believe it has sufficient liquidity to navigate potential headwinds from the pandemic.

Overview of principal business areas

Below is an overview of the Group's four principal business areas: Identification (Photo.ME), Laundry (Wash.ME), Kiosks (Print.ME) and Food (Feed.ME). In addition, the Group operates other vending equipment.

   Photo.ME       Photobooths and integrated biometric identification solutions 
 
                                       Six months       Six months   Change 
                                   ended 30 April   ended 30 April 
                                             2022             2021 
                                  ---------------  ---------------  ------- 
Number of units in operation               27,617           28,095   (1.7)% 
% of total Group vending estate 
 (units)                                    63.7%            62.9%     1.3% 
Total revenue                            GBP66.9m         GBP52.5m    27.4% 
Capex                                     GBP1.4m          GBP3.3m  (57.6)% 
EBITDA                                   GBP23.5m 
 

Having been severely impacted by the pandemic, as restrictions were eased and consumers were able to travel and socialise again, we saw strong Photo ID demand for passports and other official documentation, as well as other products delivered via our photobooth estate. This was particularly the case in France, and also in the UK despite the Government's acceptance of home taken photos for official documents. In Asia activity levels were still curtailed by some restrictions during the Period, however we are confident that activity levels will return once these restrictions are eased.

In the UK, we have successfully mitigated the decline in revenue experienced due to the introduction of home taken ID photos through the implementation of various marketing initiatives, machine maintenance and the removal of unprofitable machines. As a result, average revenue and visits per machine have increased by 22% and 58% respectively when compared with pre-pandemic levels (in 2019). In addition, our partnership with Her Majesty's Passport Office ('HMPO') and our secure digital upload technology direct to the UK Government server via our photobooths avoids verification delays that can otherwise be experienced when using self-taken photos. This further underpins the long-term future of our photobooth estate.

During Q2 2022, we reviewed the end-user pricing of our photobooths and the cost per use was increased by 33% from EUR6 to EUR8. This change in price has not impacted consumer demand to date and we plan to implement similar price increases across most of our operating markets during H2. The full benefit of this will be evident in FY 2023.

The average revenue per machine (excluding VAT) was GBP4,941 per year. EBITDA was 35.1% of the revenue during the period (six-month). Due to seasonality, this performance is expected to be higher in the second half of the financial year (31 October 2022).

As a consequence of the above, revenue grew by 27.4% to GBP66.9 million (H1 2021: GBP52.5 million) representing 58% of Group revenue. EBITDA was GBP23.5 million, contributing 63.9% of Group EBITDA (excluding the property sale).

Capex reduced by 57.6% to GBP1.4 million. The decision was taken to pause investment in photobooth capex until our next generation photobooth is available for installation in H1 2023, at which point we will extensively invest in this business area.

At 30 April 2022, the total number of photobooths in operation had reduced by 1.7% to 27,617 units, reflecting the restructuring programme undertaken in FY 2021. Photo.ME operations accounted for 63.7% of the Group's total vending units.

Innovation and new product development

Our photobooth business has showed its resilience and stability by returning to pre-pandemic levels of activity. It remains an important part of our long-term growth strategy and we are continuing to evolve our offer as to attract new users of our equipment, supported by our marketing activities.

The digital transformation of both the photobooth and print kiosk businesses has been a priority for the Group, evolving our offer from a hardware- to cloud-based architecture. This fundamental paradigm change in technology is still in development stage.

Our face ID anti-spoofing technology was recognised as compliant under international Biometrics Presentation Attack Detection standards (ISO/IEC 30107-3) by the French biometrics and security technologies experts at Cabinet Louis Reynaud Labs ("CLR Labs").

We are developing entertainment functions and fun products within our photobooths to meet the needs of the younger generation, including social media and sharing functions. We acquired VIP Box, the French leader in selfie station event rentals in April 2022, which strengthens our offering in the photo-entertainment market. This acquisition will help to further extend our leadership and influence in the photobooth and print kiosk markets across the event sector internationally.

In addition, we are developing multiservice photobooths and kiosks to integrate the consumer journey into specific omnichannel automated services. We plan to deploy or exchange next generation photobooths starting from H1 2023 for three next year, up to a total of 10,000 machines.

   Wash.ME        Unattended Revolution laundry services and launderettes 
 
                                            Six months  Six months   Change 
                                                 ended       ended 
                                              30 April    30 April 
                                                  2022        2021 
                                            ----------  ----------  ------- 
Total laundry units deployed (owned, 
 sold, acquisitions)                             5,565       5,298     5.0% 
Total revenue from laundry operations         GBP25.9m    GBP23.9m     8.4% 
 
  Revolution (excludes Launderettes): 
  Number of Revolution units in operation        4,360       3,762    15.9% 
% of total Group vending estate (number 
 of units)                                       10.1%        8.4%    19.8% 
Total revenue from Revolution                 GBP25.3m    GBP18.4m    37.5% 
Revolution capex                               GBP8.5m     GBP8.1m     4.9% 
EBITDA                                        GBP13.2m 
 

Total revenue from laundry operations grew by 8.4% to GBP25.9 million, driven by continued growth of our Revolution laundry estate. The total number of laundry units deployed (owned, sold, acquired) has increased 5.0%. However the Group has sold La Wash and following this disposal we no longer operate B2B laundry services except for a small level of activity in Ireland.

Growth of the number of Revolution installations was significantly impacted by supply chain constraints.

Revolution laundry operations

Revolution laundry operations performed very strongly. The number of units in operation increased by 15.9%, with an average of 50 units installed per month. Revolution machines now account for 10.1% of the total Group vending estate by number of units (H1 2021: 8.4%) and remain a key driver of growth.

Revenue from Revolution operations grew by 37.5% to GBP25.3 million, reflecting our continued emphasis on expanding our laundry activities and representing 21.9% of Group revenue. EBITDA was GBP13.2 million, contributing 35.9% of Group EBITDA (excluding property sale).

As a result, average revenue per machine excluding VAT was GBP12,884 per year. EBITDA was 52.2% of the revenue in HY1 2022. Due to seasonality, this performance is expected to be higher in the second half of the financial year.

Revolution capex increased by 4.9% to GBP8.5 million to fund expansion, primarily in UK, Ireland, Portugal and France.

We have continued to deliver on our sustainability commitment and reduce our impact on the environment. To date, we have installed 223 Photovoltaic solar panels on Revolution units in France.

Innovation and new product development

We launched our new low-cost Revolution laundry machine, the "Flex", to expand our product range and extend our distribution of launderettes into co-living locations and at retailers with limited available footprint. This indoor and outdoor line-up unit is based on our recently developed modular configuration self-service laundry range. Several installations across Europe have been successfully completed and early trading results have been extremely positive. The Group aims to further deploy this new product rapidly across Continental Europe to take advantage of the strong market opportunity.

In addition, the Revolution Laundry Compact V3 has been a commercial success everywhere in Europe and this success continues to grow. It will slowly be replaced by the "Optimus" model in the coming months, an" industrial concept bringing substantial savings in production costs and flexibility of deployment.

   Print.ME         High-quality digital printing service 
 
                                          Six months  Six months   Change 
                                               ended       Ended 
                                            30 April    30 April 
                                                2022        2021 
 
Number of units in operation                   4,848       5,211   (7.0)% 
% of total Group vending estate (units)        11.2%       11.7%   (4.4)% 
Revenue                                      GBP5.2m     GBP6.0m  (13.3)% 
Capex                                        GBP0.1m     GBP0.2m  (50.0)% 
EBITDA                                       GBP1.6m 
 

The total number of kiosks in operation at 30 April 2022 was 4,848, a reduction of 7.0% due to the removal of unprofitable machines which were relocated to France. Kiosks accounted for 11.2% of the total number of vending units in operation.

Revenue was GBP5.2 million, a decrease of 13.3%, due to a decline in average revenue per machine and the removal of machines and representing 4.5% of Group revenue, EBITDA was GBP1.6 million, contributing 4.2% of Group EBITDA.

The average revenue per machine (excluding VAT) was GBP2,172 per year. EBITDA was 30.8% of the revenue on HY1 2022. Due to seasonality, this performance will of course be higher for the full year ending 31 October 2022.

In line with the Group's ongoing strategy to limit kiosk investment to premium sites and its focus on expansion of laundry operations, kiosks capex was 50% lower in the Period at GBP0.1 million.

The Group plans to refresh its kiosk machines portfolio during H2 2022 by investing in 500 new kiosks in France.

   Feed.ME         Vending equipment for the food service market 

Vending equipment for the food service market is the newest of the Group's business areas. Operations and new product development are currently focused on two areas (i) self-service fresh fruit juice equipment for the B2B market and (ii) pizza vending machines targeted at the B2B hospitality market (restaurants, takeaways).

Revenue solely from the sale of equipment was GBP3.1 million and this business area contributed 2.7% to Group revenue. EBITDA was GBP1.2 million, contributing 3.2% of Group EBITDA (excluding the property sale).

Fresh fruit juice equipment

Progress was made to expand our presence in the self-service fruit juice equipment market and offer a wider variety of self-service fresh juice options in all territories where the Group has an existing footprint. Following delays due to the pandemic, the Group's professional apple and pineapple machines were installed across France, Belgium and Japan. Furthermore, nine of the Group's innovative 'juice wall concept' were deployed in the Period.

Pizza vending equipment

Our pizza vending machines offer consumers pizzas 24/7 which are ready to eat in four minutes. The machines are sold or leased to site owners. Our strategy is to enhance our presence in the pizza vending equipment market, with the aim of becoming a leader in the European market.

To date, we have accelerated the rate of installations to an average of 20 per month in France and have plans to deploy further machines in Spain, Belgium and the Netherlands.

Our goal is to scale this up to c.100 machines per month by the end of 2023 across additional geographies, including the UK, Switzerland and Belgium.

Innovation and new product development

Our professional fresh fruit juice range is due to be expanded in coming months, to include grape, kiwi, and pear products.

In May 2022, we announced a technological partnership with groundbreaking digital platform Digitiz.me, which will accelerate the Group's development in the fast-growing connected food vending market.

Digitiz.me supports the digitisation of food vending machines, enabling professionals in the food and wider hospitality sector to work with a powerful omnichannel platform that enables them to easily connect to their equipment via the web, mobile or interactive terminals, and from a single interface. Through the partnership, omnichannel software offering an all-in-one complete solution will be rolled out across all ME Group food vending equipment to offer consumers an easy and integrated experience. This will revolutionize the way our food vending machines function and deliver value for our partners.

In June 2022 we launched Boxpresso, our new connected fridge, in partnership with Digitiz.me. This kiosk combines our two unique technologies of integrated omnichannel software and 'Ovenbox' packaging, which enables pizzas to be stored and cooked all in one box, providing consumers a quality product and a seamless user experience.

We also plan to launch 64-pizza Multiquattro V3 and 96-pizza capacity kiosks in October 2022, with a completely new design as well as a new industrialization process that will enable us to decrease production costs and optimize logistics costs.

Other vending equipment

At 30 April 2022, the Group operated 6,460 other vending units, such as children's rides, photocopiers and other miscellaneous machines (H1 2021: 7,509).

These machines are primarily situated alongside our principal activities, and benefit from existing site owner relationships and where operating synergies can be captured, such as leveraging the same 650-strong field engineer and maintenance network.

During the pandemic a number of these machines were unprofitable and were removed from the estate as part of the restructuring program. As a result, other vending equipment accounts for 14.9% of the Group's total vending estate by number of units (H1 2021: 16.8%) and 3.6% of the total Group revenue (H1 2021: 5.7%).

REVIEW OF PERFORMANCE BY GEOGRAPHY

The Group's financial performance is set out below, in line with the segments as operated by the Board and the management of Photo-Me and is consistent with the information prepared to support the Board's decision-making. Although the Group is not managed around product lines, some commentary below relates to the performance of specific products in the relevant geographies.

Vending units in operation

 
                        At 30 April 2022      At 30 April 2021      Change 
                       No. of   % of total   No. of   % of total 
                        units                 units 
--------------------  -------  -----------  -------  -----------  -------- 
 Continental Europe    25,047        57.8%   24,913        55.8%      0.5% 
 UK & Republic 
  of Ireland            6,874        15.9%    8,356        18.7%   (17.7)% 
 Asia Pacific          11,415        26.3%   11,371        25.5%      0.4% 
--------------------  -------  -----------  -------  -----------  -------- 
 Total                 43,336       100.0%   44,640       100.0%    (2.9)% 
--------------------  -------  -----------  -------  -----------  -------- 
 

The total number of vending units in operation at 30 April 2022 reduced by 2.9% to 43,336 (at 30 April 2021: 44,640), reflecting the removal of unprofitable machines as part of our restructuring programme. Likewise, the decline in the UK & Republic of Ireland is due to the removal of 1,482 unprofitable machines (mainly children's rides and photobooths).

Key financials

The Group reports its financial performance based on three geographic regions of operation:

(i) Continental Europe; (ii) the UK & Republic of Ireland; and (iii) Asia Pacific.

Revenue by geographic region

 
                            Six months ended   Six months ended   Change 
                               30 April 2022      30 April 2021 
-------------------------  -----------------  -----------------  ------- 
Continental Europe                  GBP75.6m           GBP58.7m    28.8% 
UK & Republic of Ireland            GBP19.9m           GBP13.3m    49.6% 
Asia Pacific                        GBP19.8m           GBP22.5m  (12.0)% 
-------------------------  -----------------  -----------------  ------- 
Total                              GBP115.3m           GBP94.6m    21.9% 
-------------------------  -----------------  -----------------  ------- 
 

Operating profit by geographic region

 
                            Six months ended   Six months ended   Change 
                               30 April 2022      30 April 2021 
-------------------------  -----------------  -----------------  ------- 
Continental Europe                  GBP17.0m           GBP10.1m    68.3% 
UK & Republic of Ireland             GBP4.2m            GBP2.0m   110.0% 
Asia Pacific                         GBP1.9m            GBP2.7m  (29.6)% 
Corporate costs                    GBP(1.6)m          GBP(1.3)m  (23.1)% 
-------------------------  -----------------  -----------------  ------- 
Total                               GBP21.5m           GBP13.4m    59.3% 
-------------------------  -----------------  -----------------  ------- 
 

Operating revenue evolution (last six months by quarter)

The table below provides a detailed breakdown of operating revenue evolution by geographic region and business area in Q1 FY 2022 vs November 2020 to January 2021, Q2 FY 2022 vs February to April 2021 and H1 2022 vs November 2020 to April 2021.

 
                                Q1            Q2        H1 2022 
                          Nov 2021      Feb 2022       Nov 2021 
                       to Jan 2022   to Apr 2022    to Apr 2022 
--------------------  ------------  ------------  ------------- 
 CONTIENTIAL EUROPE 
 Photo.ME                      40%           39%            40% 
 Print.ME                     -13%           -8%           -11% 
 Wash.ME                       33%           29%            31% 
 Other Vending                -24%            5%           -12% 
--------------------  ------------  ------------  ------------- 
 Total                         28%           31%            30% 
--------------------  ------------  ------------  ------------- 
 
 UK & REPUBLIC OF 
  Ireland 
 Photo.ME                      82%          125%           106% 
 Print.ME                     -30%          -84%           -56% 
 Wash.ME                       53%           43%            48% 
 Other Vending                 92%          107%            98% 
--------------------  ------------  ------------  ------------- 
 Total                         63%           82%            72% 
--------------------  ------------  ------------  ------------- 
 
 ASIA 
 Photo.ME                       2%          -28%           -17% 
 Print.ME                      -6%          -20%           -13% 
 Wash.ME                       78%           83%            80% 
 Other Vending                528%           72%           127% 
--------------------  ------------  ------------  ------------- 
 Total                          9%          -23%           -11% 
--------------------  ------------  ------------  ------------- 
 
 TOTAL 
 Photo.ME                      31%           19%            24% 
 Print.ME                     -14%          -13%           -14% 
 Wash.ME                       39%           33%            36% 
 Other Vending                 43%           48%            45% 
--------------------  ------------  ------------  ------------- 
 Total                         29%           21%            25% 
--------------------  ------------  ------------  ------------- 
 

Continental Europe

Revenue increased by 28.8% to GBP75.6 million, driven by a strong performance in photobooth and laundry activity throughout the first half, particularly in France. France also gradually benefited in Q2 from increased consumer pricing at the point of use from EUR6 to EUR8 for official documents.

Photo.ME and Wash.ME operating revenue were up 40% and 31% respectively in H1. Print.ME and Other vending operations saw a slower recovery, but notably demand improved in Q2. The region contributed 65.6% of total Group revenue. Operating profit increased by 68.3% to GBP17.0 million.

We sold an office building for GBP7.1 million in April 2022, which had a GBP4.4 million positive impact on profit before tax. In November 2021 we sold La Wash, our Spanish B2B laundry service franchise business at a loss of GBP(0.5) million.

As at 30 April 2022, there were 25,038 units in operation in the region, which represented 57.8% of the Group's total vending estate. Continental Europe remains the largest region of operation by both machine volume and contribution to total Group revenue.

UK & Republic of Ireland

Revenue was up 49.6% to GBP19.9 million primarily driven by a strong performance in photobooth (Photo.ME) and laundry (Wash.ME) activity.

Operating revenue from Photo.ME was up 106%, due to a significant increase in demand for photo ID for passports and official documents. This business area was severely impacted during the pandemic, however as Photo ID demand rose, traditional photobooth activity became stronger. Home taken photo ID had a limited impact on activity.

Wash.ME also performed strongly, with operating revenue up 48%. Revolution units in operation in the region increased by 115 units compared with H2 2022.

Other vending equipment, which was also severely impacted by restrictions during the pandemic, saw operating revenue recover, up 98%.

Operating profit increased by 110% to GBP4.2 million, which reflected the successful restructuring programme in the region, which included the removal of unprofitable machines and bolstering of the management team in the region.

As at 30 April 2022, 6,874 units were in operation, a reduction of 17.7%, which represents 15.9% of the Group's total vending estate.

Asia Pacific

Performance was hampered by ongoing Covid-19 restrictions during the Period, notably in Japan in Q2. Trading conditions in China have also remained challenging. Consequently, revenue in the region decreased by 12.0% to GBP19.8 million.

Operating revenue in the region for Photo.ME and Print.ME was down 17% and 13% respectively. While laundry activities were more resilient, with Wash.ME operating revenue up 80%, and other vending equipment was up 127%, operating profit was therefore GBP1.9 million, a decline of 29.6%.

As at 30 April 2022, 11,415 units were in operation, an increase of 0.4%. Units situated in Asia Pacific represented 26.3% of the Group's total units in operation.

The Board is confident that trading in Japan will return when restrictions are eased, as has been the case so successfully in Europe, which bodes well for the coming months.

PRINCIPAL RISKS

Similar to any business, the Group faces risks and uncertainties that could impact the achievement of the Group's strategy. These risks are accepted as inherent to the Group's business. The Board recognises that the nature and scope of these risks can change; it therefore regularly reviews the risks faced by the Group as well as the systems and processes to mitigate them.

The table below sets out what the Board believes to be the principal risks and uncertainties, their impact, and actions taken to mitigate them.

 
 ECONOMIC 
 
   Nature of risk                   Description and impact                 Mitigation 
-------------------------------  -------------------------------------  ------------------------------------- 
 
   COVID-19                         COVID-19 has continued                 The Group continues to 
                                    to cause disruption                    monitor the COVID-19 situation 
                                    to worldwide markets                   closely particularly given 
                                    and supply chains, including           the emergence of the Omicron 
                                    those that Photo-Me                    variant of COVID-19, and 
                                    operates within. In                    continually reviews operational 
                                    the UK government guidance             practices, updating its 
                                    around COVID-19, especially            practices in line with 
                                    in light of the Omicron                government guidelines 
                                    variant, continued to                  and other relevant guidance. 
                                    evolve and restrict 
                                    footfall through the                   The pandemic cleaning 
                                    course of 2021.                        regime continues, to help 
                                                                           reduce the risk of cross 
                                                                           contamination between 
                                                                           the Company's customers. 
 
                                                                           Measures taken include 
                                                                           providing employees with 
                                                                           face shields, surgical 
                                                                           masks, gloves, hand sanitizer. 
                                                                           The cleaning equipment 
                                                                           additions such as SD90 
                                                                           and DEW remain in use. 
 Global economic conditions       Economic growth has                    The Group focuses on maintaining 
                                   a major influence on                   the characteristics and 
                                   consumer spending.                     affordability of its needs-driven 
                                                                          products. 
                                   A sustained period of 
                                   economic recession and 
                                   a period of high inflation             Like most businesses around 
                                   could lead to a decrease               the world, the Group has 
                                   in consumer expenditure                had to face a significant 
                                   in discretionary areas.                increase in supply chain 
                                                                          and raw material costs, 
                                                                          however, its strong position 
                                                                          in the markets in which 
                                                                          it operates gives the 
                                                                          Group significant pricing 
                                                                          power. 
 
                                                                          The Group has no exposure 
                                                                          to the invasion of Ukraine 
                                                                          by Russia. 
 Volatility of foreign            The majority of the                    The Group hedges its exposure 
  exchange rates                   Group's revenue and                    to currency fluctuations 
                                   profit is generated                    on transactions, as relevant. 
                                   outside the UK, and                    However, by its nature, 
                                   the Group's financial                  in the Board's opinion, 
                                   results could be adversely             it is very difficult to 
                                   impacted by an increase                hedge against currency 
                                   in the value of sterling               fluctuations arising from 
                                   relative to                            translation in consolidation 
                                   those currencies.                      in a cost- effective manner. 
 REGULATIONS 
 
   Nature of risk                   Description and impact                 Mitigation 
-------------------------------  -------------------------------------  ------------------------------------- 
 
   Centralisation of                In many European countries             The Group has developed 
   the production of                where the Group operates,              new systems that respond 
   ID photos                        if governments were                    to this situation, leveraging 
                                    to implement centralised               3D technology in ID security 
                                    image capture, for biometric           standards, and securely 
                                    passport and other applications,       linking our booths to 
                                    or widen the acceptance                the administration repositories. 
                                    of self-made or home-                  Solutions are in place 
                                    made photographs for                   in France, Ireland, Germany, 
                                    official document applications,        Switzerland and the UK; 
                                    the Group's revenues                   discussions in Belgium 
                                    and profits could be                   and The Netherlands). 
                                    affected. 
                                                                           Furthermore, the Group 
                                                                           also ensures that its 
                                                                           ID products remain affordable 
                                                                           and of a high-quality. 
 Brexit                           The UK left the EU on                  The Board is continually 
                                   31 January 2020. This                  reviewing the potential 
                                   has led to changes in                  impact on the Group's 
                                   UK regulations as modifications        operations following the 
                                   to numerous arrangements               UK's leaving the EU. 
                                   between the UK and other 
                                   members of the EU and                  Any potential developments, 
                                   EEA, affecting trade                   including new information 
                                   and customs conditions,                and policy indications 
                                   taxation, movements                    from the UK Government 
                                   of resources, among                    and the EU, is scrutinised 
                                   other things.                          with a view to enhancing 
                                                                          the Group's ability to 
                                                                          take appropriate action 
                                                                          targeted at managing and, 
                                                                          where possible, minimising 
                                                                          adverse repercussions 
                                                                          of Brexit. 
 
                                                                          The specific impact of 
                                                                          Brexit on the Group will 
                                                                          depend on the details 
                                                                          of any potential renegotiation 
                                                                          of the Brexit deal between 
                                                                          the UK and the EU. 
 
                                                                          The business carried out 
                                                                          post-transition impact 
                                                                          assessments to include 
                                                                          all customs documentation, 
                                                                          licences, permits, consents, 
                                                                          certificates, rules of 
                                                                          origin, commodity codes, 
                                                                          and delays at the borders. 
 
                                                                          The Board foresees that 
                                                                          in the short-term the 
                                                                          negative impact of the 
                                                                          uncertainty overshadowing 
                                                                          the general UK economy 
                                                                          could spill over into 
                                                                          the Group's UK operations. 
 STRATEGIC 
 
   Nature of risk                   Description and impact                 Mitigation 
-------------------------------  -------------------------------------  ------------------------------------- 
 
   Identification of                The failure to identify                Management teams constantly 
   new business opportunities       new business areas may                 review demand in existing 
                                    impact the ability of                  markets and potential 
                                    the Group to grow in                   new opportunities. The 
                                    the long-term.                         Group continues to invest 
                                                                           in research in new products 
                                                                           and technologies. Furthermore, 
                                                                           the Group also ensures 
                                                                           that its ID products remain 
                                                                           affordable and of a high-quality. 
 Inability to deliver             The realisation of long-term           The Group regularly monitors 
  anticipated benefits             anticipated benefits                   the performance of its 
  from the launch of               depends mainly on the                  entire estate of machines. 
  new products                     continued growth of                    New technology-enabled 
                                   the laundry and food                   secure ID solutions are 
                                   businesses and the successful          heavily trialled before 
                                   development of integrated              launch and the performance 
                                   secure ID solutions.                   of operating machines 
                                                                          is continually monitored. 
 MARKET 
 
   Nature of risk                   Description and impact                 Mitigation 
-------------------------------  -------------------------------------  ------------------------------------- 
 
   Commercial relationships         The Group has well-established,        The Group's major key 
                                    long-term relationships                relationships are supported 
                                    with a number of site-owners.          by medium-term contracts. 
                                    The deterioration in                   The Group actively manages 
                                    the relationship with,                 its site-owner relationships 
                                    or ultimately the loss                 at all levels to ensure 
                                    of, a key account would                a high quality of service. 
                                    have an adverse, albeit 
                                    contained, impact on 
                                    the Group's results, 
                                    bearing in mind that 
                                    the Group's turnover 
                                    is spread over a large 
                                    client base and none 
                                    of the accounts represent              The Group continues to 
                                    more than 2% of Group                  monitor the situation 
                                    turnover.                              in both the French and 
                                                                           the UK markets. 
                                    To maintain its performance, 
                                    the Group needs to have 
                                    the ability to continue 
                                    trading in good conditions 
                                    in France and the UK, 
                                    taking into account 
                                    the situation in these 
                                    two countries. 
 OPERATIONAL 
 
   Nature of risk                   Description and impact                 Mitigation 
-------------------------------  -------------------------------------  ------------------------------------- 
 
   Reliance on foreign              The Group sources most                 Extensive research is 
   manufacturers                    of its products from                   conducted into quality 
                                    outside the UK. Consequently,          and ethics before the 
                                    the Group is subject                   Group procures products 
                                    to risks associated                    from any new country or 
                                    with international trade.              supplier. The Group also 
                                                                           maintains very close relationships 
                                                                           with both its suppliers 
                                                                           and shippers to ensure 
                                                                           that risks of disruption 
                                                                           to production and supply 
                                                                           are managed appropriately. 
 Reliance on one single           The Group currently                    The Board has decided 
  supplier of consumables          buys all its paper for                 to hold a strategic stock 
                                   photobooths from one                   of paper, allowing for 
                                   single supplier. The                   6-10 months' worth of 
                                   failure of this supplier               paper consumption, to 
                                   could have a significant               allow enough time to put 
                                   adverse impact on paper                in place alternative solutions. 
                                   procurement. 
 Reputation                       The Group's brands are                 The protection of the 
                                   key assets of the business.            Group's brands in its 
                                   Failure to protect the                 core markets is sustained 
                                   Group's reputation and                 by products with certain 
                                   brands could lead to                   unique features. The appearance 
                                   a loss of trust and                    of the machine is subject 
                                   confidence. This could                 to high maintenance standards. 
                                   result in a decline                    Furthermore, the reputational 
                                   in our customer base.                  risk is diluted as the 
                                                                          Group also operates under 
                                                                          a range of brands. 
 Product and service              The Board recognises                   The Group continues to 
  quality                          that the quality and                   invest in its existing 
                                   safety of both its products            estate, to ensure that 
                                   and services is of critical            it remains contemporary, 
                                   importance and that                    and in constant product 
                                   any major failure will                 innovation to meet customer 
                                   affect consumer confidence.            needs. 
 
                                                                          The Group also has a program 
                                                                          in place to regularly 
                                                                          train its technicians. 
 TECHNOLOGICAL 
 
   Nature of risk                   Description and impact                 Mitigation 
-------------------------------  -------------------------------------  ------------------------------------- 
 
   Failure to keep up               The Group operates in                  The Group mitigates this 
   with advances in                 fields where upgrades                  risk by continually focusing 
   technology                       to new technologies                    on R&D. 
                                    are critical. 
 Cyber risk: Third                The Group operates an                  The Group undertakes an 
  party attack on secure           increasing number of                   ongoing assessment of 
  ID data transfer                 photobooths capturing                  the risks and ensures 
  feeds                            ID data and transferring               that the infrastructure 
                                   these data directly                    meets the security requirements. 
                                   to government databases. 
 
 

GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 April 2022

 
                                                              Unaudited     Unaudited            Audited 
                                                             Six months    Six months          12 months 
                                                                  to 30   to 30 April      to 31 October 
                                                                  April          2021               2021 
                                                                   2022 
                                                  Notes        GBP '000      GBP '000           GBP '000 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Revenue                                              3         115,261        94,581            214,404 
 Cost of sales                                                 (85,634)      (69,019)          (161,467) 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Gross profit                                                    29,627        25,562             52,937 
 Other operating income                                             159           156                317 
 Administrative expenses                                        (8,268)      (12,289)           (23,919) 
 Operating Profit                                     3          21,518        13,429             29,335 
 Other net gains/(losses)                             4           (462)            20              1,998 
 Finance income                                                      19             -                177 
 Finance cost                                                   (1,129)       (1,442)            (2,955) 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Profit before tax                                               19,946        12,007             28,555 
 Total tax charge                                     5         (3,514)       (2,611)            (6,703) 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Profit for the period                                           16,432         9,396             21,852 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 
   Other comprehensive income 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Items that are or may subsequently 
  be classified to Profit and Loss: 
  Exchange differences arising on translation 
  of foreign operations                                             120       (1,402)            (6,987) 
 Taxation on exchange differences                                     -           (7)                  - 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Total Items that are or may subsequently 
  be classified to 
  profit and loss                                                   120       (1,409)            (6,987) 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Items that will not be classified 
  to profit and loss: 
 Remeasurement gains in defined benefit 
  obligations and other post-employment 
  benefit obligations                                                 -             -                560 
 Deferred tax on remeasurement gains                                  -             -               (94) 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Total Items that will not be classified 
  to Profit and Loss                                                  -             -                466 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Other comprehensive (expense)/income 
  for the period 
  net of tax                                                        120       (1,409)            (6,521) 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Total Comprehensive income/(expense) 
  for the period                                                 16,552         7,987             15,331 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Profit for the Year Attributable 
  to: 
 Owners of the Parent                                            16,432         9,396             21,713 
 Non-controlling interests                                            -             -                139 
----------------------------------------------  -------   -------------  ------------  ----------------- 
                                                                 16,432         9,396             21,852 
----------------------------------------------  -------   -------------  ------------  ----------------- 
Total comprehensive income attributable 
 to: 
 Owners of the Parent                                            16,552         8,044             15,192 
 Non-controlling interests                                            -          (57)                139 
----------------------------------------------  -------   -------------  ------------  ----------------- 
                                                                 16,552         7,987             15,331 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 
  Earnings per Share 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 Basic Earnings per Share                             7           4.35p         2.49p              5.78p 
 Diluted Earnings per Share                           7           4.35p         2.48p              5.77p 
----------------------------------------------  -------   -------------  ------------  ----------------- 
 
 
 

All results derive from continuing operations.

The accompanying notes form an integral part of these condensed consolidated financial statements.

GROUP CONDENSED STATEMENT OF FINANCIAL POSITION

as at 30 April 2022

 
                                        Unaudited  Unaudited      Audited 
                                         30 April   30 April   31 October 
                                             2022       2021         2021 
 
                                 Notes    GBP'000    GBP'000      GBP'000 
-------------------------------  -----  ---------  ---------  ----------- 
Assets 
Goodwill                             8     19,272     13,675       17,642 
Other intangible assets              8     14,088     17,212       16,860 
Property, plant & equipment          8     88,337     93,776       91,973 
Investment property                  8        585        662          597 
Investment in associates                       21         56           21 
Financial instruments held 
 at FVTPL                                   1,501        957        1,501 
Trade and other receivables                 1,789      1,742        1,868 
-------------------------------  -----  ---------  ---------  ----------- 
Non-current assets                        125,593    128,041      130,462 
-------------------------------  -----  ---------  ---------  ----------- 
 
Inventories                                21,737     18,022       18,458 
Trade and other receivables                19,197     20,419       22,451 
Current tax                                 3,273         55        1,417 
Cash and cash equivalents            9     96,757     96,257       99,362 
-------------------------------  -----  ---------  ---------  ----------- 
Current assets                            140,964    134,753      141,688 
-------------------------------  -----  ---------  ---------  ----------- 
Total assets                              266,557    262,794      272,150 
-------------------------------  -----  ---------  ---------  ----------- 
 
Equity 
Share capital                               1,889      1,889        1,889 
Share premium                              10,599     10,599       10,599 
Translation and other reserves              9,566     14,962        9,435 
Retained earnings                         121,207     92,775      106,051 
-------------------------------  -----  ---------  ---------  ----------- 
Equity attributable to 
 owners of the Parent                     143,261    120,225      127,974 
Non-controlling interests                       -      1,632        1,720 
-------------------------------  -----  ---------  ---------  ----------- 
Total Shareholders' funds                 143,261    121,857      129,694 
-------------------------------  -----  ---------  ---------  ----------- 
 
Liabilities 
Financial liabilities                9     45,523     41,653       55,058 
Post-employment benefit 
 obligations                                4,888      5,510        4,933 
Deferred tax liabilities                    7,781      6,737        8,571 
Provisions                                      -          -          338 
-------------------------------  -----  ---------  ---------  ----------- 
Non-current liabilities                    58,192     53,899       68,900 
-------------------------------  -----  ---------  ---------  ----------- 
 
Financial liabilities                9     21,665     46,542       25,877 
Provisions                                  1,351        411        1,828 
Current tax                                   688      1,506        3,367 
Trade and other payables                   41,400     38,579       42,484 
-------------------------------  -----  ---------  ---------  ----------- 
Current liabilities                        65,104     87,038       73,556 
-------------------------------  -----  ---------  ---------  ----------- 
Total equity and liabilities              266,557    262,794      272,150 
-------------------------------  -----  ---------  ---------  ----------- 
 

The accompanying notes form an integral part of these condensed consolidated financial statements.

GROUP CONDENSED STATEMENT OF CASH FLOWS

for the six months ended 30 April 2022

 
                                                            Unaudited         Unaudited          Audited 12 
                                                           Six months        Six months           months to 
                                                                   to                to          31 October 
                                                             30 April          30 April                2021 
                                                                 2022              2021 
                                              Notes            GBP000            GBP000              GBP000 
-------------------------------------------  ------  ----------------  ----------------  ------------------ 
 Cash flow from operating activities 
 Profit before tax                                             19,946            12,007              28,555 
 Finance cost                                                   1,129             1,442               2,955 
 Finance income                                                  (19)                 -               (177) 
 Other losses/( gains)                                            462              (20)             (1,998) 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Operating profit/(loss)                                       21,518            13,429              29,335 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Amortisation of intangible assets                              4,030             1,837               5,419 
 Depreciation of property, plant 
  and equipment                                                14,620            11,760              30,328 
 (Profit)/loss on sale of property, 
  plant and equipment                                         (7,277)               767               (368) 
 Exchange differences                                           (348)             (156)               (355) 
 Other items                                                    (812)             (604)                 680 
 Changes in working capital: 
 Inventories                                                  (3,279)           (1,411)             (1,847) 
 Trade and other receivables                                    3,333           (3,679)             (5,780) 
 Trade and other payables                                     (1,084)           (1,172)               8,278 
 Provisions                                                     (863)             1,616                 400 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Cash generated from operations                                29,837            22,387              66,090 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Interest paid                                                (1,129)             (365)             (2,956) 
 Taxation paid                                                (8,839)           (6,015)             (9,269) 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Net cash generated from operating 
  activities                                                   19,869            16,007              53,865 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Cash flows from investing activities 
 Acquisition of subsidiaries net 
  of cash acquired                                              (739)           (6,575)            (10,133) 
 Acquisition of minority interest                             (2,985) 
 Proceeds from sale of subsidiary                                 152                 -               1,050 
 Investment in intangible assets                              (1,266)             (691)             (2,529) 
 Purchase of property, plant and 
  equipment                                                  (13,123)          (15,993)            (26,376) 
 Proceeds from sale of property, 
  plant and equipment                                           7,945             1,235               3,904 
 Interest received                                                 19               106                  73 
 Dividends received from associates                                 -                 -                 104 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Net cash utilised in investing 
  activities                                                  (9,997)          (21,918)            (33,907) 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Cash outflows from financing activities 
 Repayment of capital element of 
  finance leases                                              (2,105)             (181)             (4,600) 
 Repayment of borrowings                                      (9,862)          (11,137)            (22,365) 
 Increase in borrowings                                           186             6,310               5,093 
 Decrease in assets held to maturity                                -                 -                  25 
 Net cash utilised in financing 
  activities                                                 (11,781)           (5,008)            (21,847) 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Net Decrease in cash and cash equivalents                    (1,909)          (10,947)             (1,899) 
 Cash and cash equivalents at beginning 
  of year                                                      99,362           107,177             107,177 
 Exchange loss on cash and cash 
  equivalents                                                   (696)                 -             (5,926) 
---------------------------------------------------  ----------------  ----------------  ------------------ 
 Cash and cash equivalents at end 
  of year                                         9            96,757            96,257              99,362 
-------------------------------------------  ------  ----------------  ----------------  ------------------ 
 
 

The accompanying notes form an integral part of these condensed consolidated financial statements.

GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 April 2022

 
                             Share     Share      Other  Translation   Retained  Attributable          Non-      Total 
                           capital   premium   reserves      reserve   earnings     to owners   controlling 
                                                                                       of the     interests 
                                                                                       Parent 
                           GBP'000   GBP'000    GBP'000      GBP'000    GBP'000       GBP'000       GBP'000    GBP'000 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 
   At 1 November 2020        1,889    10,599      1,781       14,533     83,379       112,181         1,689    113,870 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Profit for period               -         -          -            -      9,396         9,396             -      9,396 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Other comprehensive 
  expense 
 Exchange differences            -         -          -        (647)          -         (647)          (57)      (704) 
 Tax on exchange                 -         -          -          (7)          -           (7)             -        (7) 
 Transfers between 
  reserves                       -         -          -        (698)          -         (698)             -      (698) 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Total other 
  comprehensive 
  expense                        -         -          -      (1,352)          -       (1,352)          (57)    (1,409) 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Total comprehensive 
  (expense)/income               -         -          -      (1,352)      9,396         8,044          (57)      7,987 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 
   At 30 April 2021          1,889    10,599      1,781       13,181     92,775       120,225         1,632    121,857 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 
 
                             Share     Share      Other  Translation   Retained  Attributable          Non-      Total 
                           capital   premium   reserves      reserve   earnings     to owners   controlling 
                                                                                       of the     interests 
                                                                                       Parent 
                           GBP'000   GBP'000    GBP'000      GBP'000    GBP'000       GBP'000       GBP'000    GBP'000 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 
   At 1 November 2021        1,889    10,599      1,781        7,654    106,051       127,974         1,720    129,694 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Profit for period               -         -          -            -     16,432        16,432             -     16,432 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Other comprehensive 
  expense 
 Exchange differences            -         -          -          131          -           131          (11)        120 
 Total other 
  comprehensive 
  expense                        -         -          -          131          -           131          (11)        120 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Total comprehensive 
  (expense)/income               -         -          -          131     16,432        16,563          (11)     16,552 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Acquisition of minority         -         -          -            -    (1,276)       (1,276)       (1,709)    (2,985) 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 Total transactions 
  with owners of the 
  parent                         -         -          -            -    (1,276)       (1,276)       (1,709)    (2,985) 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 
   At 30 April 2022          1,889    10,599      1,781        7,785    121,207       143,261             -    143,261 
------------------------  --------  --------  ---------  -----------  ---------  ------------  ------------  --------- 
 

The accompanying notes form an integral part of these condensed consolidated financial statements

NOTES

   1.   Corporate information 

The condensed consolidated interim financial statements of Photo-Me International plc (the "Company") for the six months ended 30 April 2022 ("the Interim Report") were approved and authorised for issue by the Board of Directors on 18 July 2021. These condensed consolidated interim financial statements comprise the Company and its subsidiaries (together the "Group") and are presented in pounds sterling, rounded to the nearest thousand.

The Company is a public limited company, incorporated and domiciled in England, whose shares are quoted on the London Stock Exchange, under symbol PHTM. Its registered number is 735438 and its registered office is at Unit 3B, Blenheim Rd, Epsom, KT19 9AP, Surrey.

Photo-Me's principal activity is the operation of unattended vending equipment aimed primarily at the consumer market. The largest part of the estate comprises photobooths and digital printing kiosks, with the remainder including laundry units, amusement machines and business service equipment. The Group manages these on a geographical basis with the principal operations of the Group in the United Kingdom and Ireland, Continental Europe, and Asia.

   2.   Basis of preparation and accounting policies 

The financial statements have been prepared in accordance with IAS 34. The accounting policies applied are consistent with those that were applied in the Company's consolidated financial statements for the 12 months ended 31 October 2021 and that are expected to be applied in its consolidated financial statements for the year ended 31 October 2022. The condensed consolidated interim financial statements comprise the unaudited financial information for the six months ended 30 April 2022. They do not include all of the information and disclosures required for full annual financial statements, and should be read in conjunction with the Group's financial statements for the period ended 31 October 2021. The condensed financial statements do not constitute statutory accounts within the meaning of section 434 of the UK Companies Act 2006.

The consolidated financial statements of the Group as at and for the period ended 31 October 2021 are available at www.me-group.com or upon request from the Company's registered office at Unit 3B, Blenheim Rd, Epsom, KT19 9AP, Surrey.

The Interim Report is unaudited but has been reviewed by the auditors and their report to the Company is included in the Interim Report. The comparative figures for the financial period ended 31 October 2021 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors (i) was unmodified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without modifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Accounting policies and estimates

The accounting policies applied by the Group in this Interim Report are the same as those applied in the Group's financial statements for the 12 months period ended 31 October 2021.

New standards adopted in the period:

There are a number of new and revised standards and interpretations, not all of which are applicable to the Group, which have been issued and are effective for the year 2022 and future reporting periods. The most significant standards and interpretations were listed in the Group's 2021 Annual Report, however none of these are likely to have a material impact on the Group's financial statements.

Estimates and significant judgements

The preparation of the condensed consolidated financial information requires management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial information. Such estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances and constitute management's best judgement at the date of the financial statements. In future, actual experience may deviate from these estimates and assumptions, which could affect the financial statements as the original estimates and assumptions are modified, as appropriate, in the period in which the circumstances change.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were in the same areas as those that applied in the consolidated financial statements as at and for the period ended 31 October 2021.

Use of non-GAAP profit measures

The Group measures performance using earnings before interest, tax, depreciation and amortisation ("EBITDA"). EBITDA is a common measure used by a number of companies, but is not defined in IFRS.

The Group measures cash on a net cash basis as explained in note 8.

Going Concern

The Annual Report for the period ended 31 October 2021 provided a full description of the Group's business activities, its financial position, cash flows, funding position and available facilities together with the factors likely to affect its future development, performance and position. It also detailed risks associated with the Group's business. This interim report provides updated information on these subjects for the six months to 30 April 2022.

The Group has at the date of this Interim Report, sufficient financing available for its estimated requirements for at least the next twelve months, together with the proven ability to generate cash from its trading performance. This provides the Directors with confidence that the Group is well placed to manage its business risks successfully in the context of the current financial conditions and the general outlook in the global economy.

After reviewing the Group's annual budgets, plans and financing arrangements, the Directors consider that the Group has adequate resources to continue operating for the foreseeable future and that it is therefore appropriate to continue to adopt the going concern basis in preparing this Interim Report.

   3.   Segmental analysis 

IFRS 8 requires operating segments to be identified based on information presented to the Chief Operating Decision Maker (CODM), in order to allocate resources to the segments and monitor performance.

The Group monitors performance at operating profit level before interest and taxation.

In accordance with IFRS 8, no segment information is provided for assets and liabilities in the disclosures below, as this information is not regularly provided to the CODM.

Seasonality of operations

Historically, the second half of the financial year is seasonally the strongest for the Group in terms of profits.

 
                                                              United 
                                             Continental     Kingdom 
                                     Asia         Europe   & Ireland    Corporate     Total 
                                  GBP'000        GBP'000     GBP'000      GBP'000   GBP'000 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Six months ended 30 April 
 2022 
Total revenue                     19,793   80,597         19,866      -            120,256 
Inter segment sales               -        (4,994)        (2)         -            (4,996) 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Revenue from external customers   19,793   75,603         19,864      -            115,261 
--------------------------------  -------  -------------  ----------  -----------  -------- 
EBITDA                            4,531    29,262         7,532       (1,157)      40,168 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Depreciation and amortisation     (2,638)  (12,266)       (3,337)     (409)        (18,650) 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Operating profit excluding 
 associates                       1,893    16,996         4,195       (1,566)      21,518 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Operating profit                                                                   21,518 
Other gains                                                                        (462) 
Finance income                                                                     19 
Finance costs                                                                      (1,129) 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Profit before tax                                                                  19,946 
Tax                                                                                (3,514) 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Profit for period                                                                  16,432 
--------------------------------  -------  -------------  ----------  -----------  -------- 
Capital expenditure (excluding 
 right of use assets)             1,725    7,595          3,933       1,136        14,389 
--------------------------------  -------  -------------  ----------  -----------  -------- 
 
 
                                                             United 
                                            Continental     Kingdom 
                                    Asia         Europe   & Ireland    Corporate     Total 
                                 GBP'000        GBP'000     GBP'000      GBP'000   GBP'000 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Six months ended 30 April 
 2021 
Total revenue                    24,012   58,716         13,321      -            96,049 
Inter segment sales              (1,468)  -              -           -            (1,468) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Revenue from external 
 customers                       22,544   58,716         13,321      -            94,581 
-------------------------------  -------  -------------  ----------  -----------  -------- 
EBITDA                           6,418    19,572         3,908       (1,202)      28,696 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Depreciation and amortisation    (3,736)  (9,507)        (1,879)     (145)        (15,267) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Operating profit excluding 
 associates                      2,682    10,065         2,029       (1,346)      13,429 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Operating profit                                                                  13,429 
Other gains                                                                       20 
Finance income                                                                    - 
Finance costs                                                                     (1,442) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Profit before tax                                                                 12,007 
Tax                                                                               (2,611) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Profit for period                                                                 9,396 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Capital expenditure (excluding 
 right of use assets)            9,782    9,988          2,572       135          22,477 
-------------------------------  -------  -------------  ----------  -----------  -------- 
 
 
                                                             United 
                                            Continental     Kingdom 
                                    Asia         Europe   & Ireland    Corporate     Total 
                                 GBP'000        GBP'000     GBP'000      GBP'000   GBP'000 
-------------------------------  -------  -------------  ----------  -----------  -------- 
12 months ended 31 October 
 2021 
Total revenue                    39,751   152,257        29,644      -            221,652 
Inter segment sales              -        (7,248)        -           -            (7,248) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Revenue from external 
 customers                       39,751   145,009        29,644      -            214,404 
-------------------------------  -------  -------------  ----------  -----------  -------- 
EBITDA                           8,062    54,809         8,587       (6,381)      65,077 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Depreciation and amortisation    (6,024)  (25,174)       (3,643)     (901)        (35,742) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Operating profit excluding 
 associates                      2,038    29,635         4,944       (7,282)      29,335 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Operating profit                                                                  29,335 
Other gains                                                                       1,998 
Finance income                                                                    177 
Finance costs                                                                     (2,955) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Profit before tax                                                                 28,555 
Tax                                                                               (6,703) 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Profit for period                                                                 21,852 
-------------------------------  -------  -------------  ----------  -----------  -------- 
Capital expenditure (excluding 
 right of use assets)            2,993    20,749         5,974       245          29,961 
-------------------------------  -------  -------------  ----------  -----------  -------- 
 
   4.   Other gains and losses 
 
                                  Six months  Six months to  12 months to 
                                          to       30 April    31 October 
                                    30 April           2021          2021 
                                        2022 
                                     GBP'000        GBP'000       GBP'000 
Disposal of Subsidiary                 (462)              -         1,093 
Fair value gain on financial 
 instrument held at FVTPL                  -              -           546 
Gain/(loss) on available 
 for sale financial instruments            -              -            26 
Other gains                                -             20           333 
                                       (462)             20         1,998 
--------------------------------  ----------  -------------  ------------ 
 

The Group incurred a loss on disposal of GBP462,000 from the disposal of its Spanish subsidiary La Wash Group, recognised in other losses in the income statement.

   5.   Taxation 
 
                           Six months  Six months to  12 months to 
                                   to       30 April    31 October 
                             30 April           2021          2021 
                                 2022 
                              GBP'000        GBP'000       GBP'000 
Profit/(loss) before tax       19,946         12,007        28,555 
Total taxation charge         (3,514)        (2,611)       (6,703) 
-------------------------  ----------  -------------  ------------ 
Effective tax rate             17,6 %          21.7%        23.5 % 
-------------------------  ----------  -------------  ------------ 
 

The tax charge in the Group Income Statement is based on management's best estimate of the full year effective tax rate based on expected 12 Months profits to 31 October 2022.

The corporation tax rate for the period ended 30 April 2022 was 19%. The Finance Bill 2021 was substantively enacted on 24 May 2021, legislating that the UK Corporation Tax rate will increase from 19% to 25% with effect from 1 April 2023.

The Group undertakes business in multiple tax jurisdictions.

   6.   Dividends 

Dividends paid and proposed

 
               30 April 2022     31 October 2021 
          ------------------  ------------------ 
          Pence per  GBP'000  Pence per  GBP'000 
              share               share 
--------  ---------  -------  ---------  ------- 
Interim         2.6    9,840          -        - 
 
Final             -        -          -        - 
--------  ---------  -------  ---------  ------- 
 

No dividends were paid in the year ended 31 October 2021.

The Board proposed a final dividend of 2.89p per ordinary share in respect of the year ended 31 October 2021, which was approved by shareholders at the Annual General Meeting held on 29 April 2022 and paid on 13 May 2022.

   7.   Earnings per share 

The earnings and weighted average number of shares used in the calculation of earnings per share are set out in the table below:

 
                                       Six months    Six months       12 months 
                                      to 30 April   to 30 April   to 31 October 
----------------------------------- 
                                             2022          2021            2021 
-----------------------------------  ------------  ------------  -------------- 
Basic earnings per share                     4.35         2.49p           5.78p 
Diluted earnings per share                   4.35         2.48p           5.77p 
-----------------------------------  ------------  ------------  -------------- 
Earnings available to shareholders 
 (GBP'000)                                 16,432         9,396          21,852 
Weighted average number of shares 
 in issue in the period 
- basic ('000)                            378,012       378,011         378,012 
- including dilutive share options 
 ('000)                                   378,012       378,212         378,938 
-----------------------------------  ------------  ------------  -------------- 
 
   8.   Non-current assets - intangibles, property, plant and equipment and investment property 
 
                                              Intangible    Property,   Investment 
                                   Goodwill       assets      plant &     property 
                                                            equipment 
                                    GBP'000      GBP'000      GBP'000      GBP'000 
 
 Net book value at 1 November 
  2020                               13,767       13,466       90,285          652 
------------------------------  -----------  -----------  -----------  ----------- 
 Exchange adjustment                  (228)          202      (4 981)         (39) 
 Additions - photobooths 
  & vending machines                      -            -       22 563            - 
 Additions - other assets                 -        2 529        4 866            - 
 Additions - right of use                 -            -        9 741            - 
 Additions - new subsidiaries         4 685        7 644        2 481            - 
 Amortisation / Depreciation 
  / Impairment                        (582)      (4 837)     (30 312)         (16) 
 Transfers                                -      (1 144)        1 144            - 
 Disposals at net book value              -      (1 000)      (3 814)            - 
------------------------------  -----------  -----------  -----------  ----------- 
 Net book value at 31 October 
  2021                               17 642       16 860       91 973          597 
------------------------------  -----------  -----------  -----------  ----------- 
 Exchange adjustment                   (22)         (76)        (729)          (4) 
 Additions - photobooths                  -            -       11,120            - 
  & vending machines 
 Additions - other assets                 -        1,266        2,003            - 
 Additions - right of use                 -            -          781            - 
 Additions - new subsidiaries         1,652           96           25            - 
 Transfers                                -            -            -            - 
 Amortisation / Depreciation 
  / Impairment                            -      (4,030)     (14,612)          (8) 
 Disposals at net book value              -         (28)      (2,224)            - 
------------------------------  -----------  -----------  -----------  ----------- 
 Net book value at 30 April 
  2022                               19,272       14,088       88,337          585 
------------------------------  -----------  -----------  -----------  ----------- 
 
   9.   Net cash 
 
                                            30 April   30 April   31 October 
                                                2022       2021         2021 
                                             GBP'000    GBP'000      GBP'000 
 Cash and cash equivalents per statement 
  of financial position                       96,757     96,257       99,362 
 Non-current borrowings                     (34,673)   (35,372)     (44,323) 
 Current borrowings                         (18,930)   (44,007)     (20,120) 
-----------------------------------------  ---------  ---------  ----------- 
 Net cash                                     43,155     16,878       34,919 
-----------------------------------------  ---------  ---------  ----------- 
 

At 30 April 2022, GBP984,000 (30 April 2021: GBP984,000; 31 October 2021: GBP984,000) of the total net cash comprised bank deposit accounts that are subject to restrictions and are not freely available for use by the Group.

Cash and cash equivalents per the cash flow comprise cash at bank and in hand and short-term deposit accounts with an original maturity of less than three months, less bank overdrafts.

Net cash is a non-GAAP measure since it is not defined in accordance with IFRS but is a key indicator used by management in assessing operational performance and financial position strength. The inclusion of items in net cash as defined by the Group may not be comparable with other companies' measurement of net cash/debt. The Group includes in net cash: cash and cash equivalents and certain financial assets (mainly deposits), less instalments on loans and other borrowings.

The table above, which is not currently required by IFRS, reconcile the Group's net cash to the Group's statement of cash flows. Management believes the presentation of the tables will be of assistance to shareholders.

10. IFRS3 Business Combinations

The Group continues to expand with the recent acquisition of 100% of Vip Box, the French leader in the rental and sale of selfie stations for private and professional events.

This acquisition supports the Group's strategic aims of product diversification.

The transaction completed on the 31 March 2022 for a consideration of EUR3,900,000 (GBP3,274,000).

The acquisition was funded from the Group's cash resources.

Deferred consideration

Of the total consideration, EUR600,000 (GBP504,000) is deferred and contingent on future performance. The deferred payment will be due 12 months from the acquisition date. The value will be determined based on Vip Box's profit before tax over the 12 months following the acquisition date.

Management expects Vip Box to meet the maximum profit before tax target, so have accrued the maximum contingent consideration value of EUR600,000 and included this amount in the total consideration.

Acquired assets and liabilities

Due to the proximity of the transaction to the reporting date, the purchase price allocation, including determination of the fair value of intangible assets recognised on consolidation has not been finalised.

Goodwill has been calculated using the provisional fair values of the assets and liabilities acquired, with a value of GBP1,652,000 recognised in the Group's Statement of Financial Position.

Pending receipt of the final valuations of the assets acquired, in accordance with IFRS3, the accounts will be adjusted retrospectively within the measurement period of no more than one year from the acquisition date.

Revenue and profit contribution

The acquired business contributed revenues of GBP142,000 and profit before tax of GBP30,000 to the Group for the period from 31 March 2022 to 30 April 2022.

11. Changes to the composition of the Group

Disposal of La Wash Group

On 8 April 2022, the Group disposed of its Spanish B2B laundry business La Wash Group. This was for consideration of GBP152,000. The Group incurred a loss of GBP462,000 which has been recognised in other losses in the income statement.

Acquisition of non-controlling interest in SCI du Lotissement d'Echirolles

The Group owned 61% of SCI Lotissement d'Echirolles (SCI), with the remaining 39% previously being held by a third party non-controlling interest.

In April 2022, the Group acquired the remaining 39% from the non-controlling interest increasing its ownership of SCI to 100%. The consideration paid for the non-controlling interest was EUR3,554,000 (GBP2,985,000).

In accordance with IAS27 this acquisition was accounted for as an equity transaction. The Group's non-controlling interest in SCI has been reduced to nil and the excess of consideration paid over non-controlling interest fair value has been recognised as a reduction in Group equity. Therefore, the total impact to equity was the consideration paid of EUR3,554,000 (GBP2,985,000).

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEARLY FINANCIAL REPORT

We confirm that to the best of our knowledge:

-- The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

   --    The Interim Management Report includes a fair review of the information required by: 

(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the year and

(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

John Lewis (Non-executive Chairman)

Serge Crasnianski (Chief Executive Officer and Deputy Chairman)

18 July 2022

INDEPENT REVIEW REPORT

We have been engaged by Photo-Me International PLC ("the Company") to review the financial information for the six months ended 30(th) April 2022 which comprises the Group Condensed Statement of Comprehensive Income, the Group Condensed Statement of Financial Position, the Group Condensed Statement of Cash Flows and the Group Condensed Statement of Changes in Equity and the related explanatory notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices Board and our Engagement Letter dated 20(th) June 2022. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Respective responsibilities of directors and auditor

The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with International Accounting Standard 34, 'Interim Financial Reporting', in accordance with Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority which requires that the interim report must be prepared and presented in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Our responsibility is to express to the Company a conclusion on the condensed set of financial information in the interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed financial information in the interim report does not give a true and fair view of the financial position of the Company as at 30(th) April 2022 and of its financial performance and its cash flows for the six months then ended, in accordance with International Accounting Standard 34, 'Interim Financial Reporting and Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Signed:

Mazars LLP

Chartered Accountants

30 Old Bailey

London

EC4M 7AU

Date: 19 July 2022

Note:

a) The maintenance and integrity of the Photo-Me International plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

CAUTIONARY STATEMENT AND DISCLAIMERS

This Interim Financial Report is addressed to the shareholders of Photo-Me International plc and has been prepared solely to provide information to them. This report is intended to inform the shareholders of the Group's performance during the six months to 30 April 2022. It has been prepared to provide additional information to shareholders to enable them to access the Group's strategies, performance and the potential for those strategies to succeed. It should not be relied upon for any other purpose.

This Interim Financial Report contains certain forward-looking statements which are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries and markets in which the Group operates. It is believed that the expectations reflected in this report are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently expected. No assurances can be given that the forward looking statements in this Interim Financial Report will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation.

DISTRIBUTION OF REPORT

This Interim Report is released to the London Stock Exchange. It may be viewed and downloaded from the Company's Investor Relations section on the website www.me-group.com.

Shareholders and others who require a copy of the report may obtain a copy by contacting the Company Secretary at the Company's registered office.

Photo-Me International plc

Unit 3B Blenheim Road Epsom

Surrey KT19 9AP

Tel: +44 (0)1372 453399

Fax: +44 (0)1372 459064

e-mail: ir@photo- me.co.uk

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

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