Strategic Review/IMS
Photo-Me International PLC
19 September 2007
Wednesday 19 September 2007
PHOTO-ME INTERNATIONAL PLC
Strategic Review/Interim Management Statement
PMI (PHTM.L), the digital imaging company, announces that it is to retain its
Vending Division. PMI also reports its first Interim Management Statement, which
covers the period from 1 May to 19 September 2007, as required by the UK Listing
Authority's Disclosure and Transparency Rules.
Update on Strategic Review
Since November 2006, the Board and its advisers have been examining options for
PMI's three principal businesses - vending, minilab manufacturing and wholesale
lab manufacturing - and ways of restructuring the Group so as to permit a
significant return of capital to shareholders. As part of this process, the
Board has been seeking to dispose of the Vending Division. Last month, following
receipt of indicative offers, the Board concluded that there was a sufficient
level of interest for the Vending Division disposal process to move to its next
phase. As these indicative offers have not translated into firm offers at an
acceptable level, in part reflecting turbulence in the debt markets, the Board
has now decided to terminate the Vending Division disposal process.
The PMI Board continues to believe that the Vending Division possesses
considerable fundamental strengths, in particular leading positions in key
territories, technical expertise, an attractive market, and a cash generative
financial profile. The Vending Division has a track record of delivering a
substantial annual EBITDA.
The Board, under its new leadership, continues to examine other elements of the
Strategic Review process and a further update to the market will be given in due
course.
In the period, a further £3.8m of shares were purchased by the Company to add to
the £1.1m in the period from 30 March to 30 April 2007.
Update on Commercial Performance
The first quarter of the year, covering the period from 1 May to 31 July, is
historically one of the two quietest quarters, contributing insubstantially to
annual profit. The most important months tend to be September/October (for
vending) and March/April (for minilab manufacturing).
In the quarter, vending revenue was marginally down in local currency terms in
all three principal territories: the UK & Ireland, France and Japan; in Sterling
terms, the Japanese decrease was more substantial. Minilab manufacturing revenue
decreased, whilst wholesale lab manufacturing revenue was down as a result of a
depressed market and the introduction of a rival technology into the market.
Overall, on a like-for-like basis (disregarding the Deith Group, whose disposal
was completed in April 2007), revenue was 7% below the previous year actual.
Whilst vending in the UK & Ireland has to contend with the triple challenges of
a weak retail market place, high site owner commissions and the unsettling
effect on both the business and staff of recent actual and scheduled Board
resignations, with the related publicity, the outlook for the Group remains
substantially as set out in PMI's Preliminary Announcement of 2 July 2007. The
prospects for PMI's minilab manufacturing business will benefit from the
recently announced contract with the largest retail pharmacy in the USA, for the
exclusive supply of minilabs for the third successive year.
During the period, there was no material change to the Group's financial
position.
As usual, the Board proposes to provide an update on trading and outlook at the
Company's AGM, which this year will be held on 17 October 2007.
Update on Corporate Governance
It was a period of further progress, with considerable change to the Board.
Amongst the executive Directors, Riccardo Costi and Francois Giuntini left the
Board (but not the Group) in July, whilst on 3 September it was announced that
Serge Crasnianski would step down as Chief Executive Officer and as a Director
by 30 November 2007, following a smooth transition to his successor. Amongst the
non-executive Directors, Roger Partington and David Young were appointed in May.
In July, Francis Wahl resigned and Dan David announced his resignation with
effect from the earlier of the conclusion of the Strategic Review or 31 December
2007. On 3 September, Vernon Sankey resigned as Chairman and a Director, with
David Young being elected by the Board to be its Chairman in the interim.
If the Chairman is excluded, one-half of the Directors - Roger Partington,
Martin Reavley and Hugo Swire - are Independent Directors.
The recruitment of a successor Chief Executive Officer, involving a recruitment
company and overseen by a Committee of the Board chaired by Roger Partington, is
well underway. Defining the future strategy for the Vending Division will be a
key priority for the new Chief Executive Officer.
Legal Disclaimer:
This announcement contains statements that are or may be forward-looking
statements with respect to the financial condition, operations and businesses
of PMI. All statements other than statements of historical facts included in
this announcement may be forward-looking statements.
These forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual performance or achievements of
PMI, or industry results, to be materially different from any performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements are based on numerous assumptions regarding the
present and future business strategies of PMI and the environment in which it
will operate in the future which are not necessarily indicative of future
outcomes or the financial performance of PMI and should not be considered in
isolation.
Enquiries:
Photo-Me International plc 01372-455 591
David Young (Chairman)
Serge Crasnianski (CEO)
Jean-Luc Peurois (Finance Director)
Bankside Consultants
Charles Ponsonby 020-7367 8851
Tulchan Communications
David Allchurch 07771-937 173
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