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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Photo-me International Plc | LSE:PHTM | London | Ordinary Share | GB0008481250 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 107.00 | 107.00 | 107.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPHTM
RNS Number : 9272Y
Photo-Me International PLC
11 December 2017
11 December 2017
Photo-Me International plc
("Photo-Me" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHSED 31 OCTOBER 2017
Solid first half as laundry remains primary growth accelerator
Photo-Me International plc ('Photo-Me" or "the Group"), the instant service equipment group, announces its results for the six-month period ended 31 October 2017.
Results Highlights
Hot Features
Premium
Reported At constant
currency
--------------------------------- -----------------------
Six months Six months Change Six months Change(1)
ended ended ended
31 Oct 31 Oct 31 Oct
2017 2016 2016(1)
GBP122.2 GBP113.4
Revenue m GBP110.6m +10.5% m +7.8%
GBP44.9 GBP41.6
EBITDA(2) m GBP40.3m +11.4% m +7.9%
Profit Before GBP32.9 +6.1 GBP31.9
Tax m GBP31.0m % m +3.1%
GBP47.1 (30.7)
Net Cash(3) m GBP68.0m %
+9.6
EPS (diluted) 6.40p 5.84p %
Interim dividend
per Ordinary +20.1
share 3.71p 3.09p %
(1) For constant currency comparatives, average rates of exchange used were GBP/EUR 1.13 (H1 2017: 1.20), GBP/Yen 145 (H1 2017: 139)
(2) Refer to the note 3 to the financial statements for the reconciliation of EBITDA to PBT
(3) Refer to the note 8 to the financial statements for the reconciliation of Net Cash to Cash and cash equivalents as per the financial statements
Financial Highlights
-- Revenue was up 10.5% to GBP122.2 million (up 7.8% at constant currency)
-- Reported EBITDA was up 11.4% and EBITDA margin expanded to 36.7%, up 300bpts, including GBP2.3 million profit on the sale of property and GBP0.9 million one-off costs in relation to the UK retail estate
-- Reported profit before tax was GBP32.9 million, up 6.1% (up 3.1% at constant currency)
-- Net cash was GBP47.1 million, reflecting a total of GBP68.6 million in higher dividend payments (GBP34.6 million) and investments in future growth (GBP34.0 million) since 31 October 2016, up GBP7.9 million from GBP39.2 million at 30 April 2017
-- Interim dividend increased by 20.1% to 3.71 pence per Ordinary share, in line with the stated progressive dividend policy
-- Total laundry revenues up 75% to GBP17.3 million (H1 2017: GBP9.9 million)
Operational Highlights
-- Continued strong performance led by Continental Europe in all three key business areas: identification, laundry and printing kiosks.
-- Further progress in the deployment of ID security technology: -- Continued rollout of encrypted passport photo ID upload technology in Ireland.
-- In the UK, positive conclusion of discussions with Her Majesty's Passport Office and of the testing of the new online passport service; E-passport photobooths being rolled out across the UK, from mid December 2017.
-- Laundry remains the primary growth driver of the Group: -- Manufacturing capacity increased in H2 2018 in support of growth target. -- B2B services extended through acquisitions, with further opportunities under review. -- Action taken to boost profitability of UK digital printing business:
-- Photo-Me Retail operations being refocused to provide unattended digital printing kiosk activities, with the phased closure of manned retail outlets
-- This will result in a total one-off restructuring cost of GBP2.0 million in the current financial year, of which GBP0.9 million has been accounted for in the period ended 31 October 2017.
-- Continued investment in innovation for future growth focused on:
-- Complementary products and technologies with multiple applications, such as a banking front-end application for the Group's booths.
-- Ongoing upgrade to support market leading position.
Commenting on the results, Serge Crasnianski, Chief Executive Officer, said:
"The Group has once again performed strongly, with good operational progress made against our strategy to diversify operations.
In the first half, further excellent progress was achieved in the deployment of laundry operations, a key growth driver for the Group. As a result, the Board anticipates that laundry revenue will become an increasing proportion of total Group revenue as we get closer to achieving our mid-term deployment targets."
ENQUIRIES:
Photo-Me International +44 (0) 1372 453 399 Gabriel Pirona, CFO ir@photo-me.com Hudson Sandler LLP +44 (0) 20 7796 4133 Wendy Baker/Emily Dillon/Jasper photo-me@hudsonsandler.com Bartlett
An interview with Serge Crasnianski, CEO, and Gabriel Pirona, CFO, commenting on the interim results is available to view at www.photo-me.com and www.brrmedia.co.uk/event/161041
An audio webcast of the analyst and investor presentation will be available to download later today at www.photo-me.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 more than 47,300 vending units across 18 countries and its technological innovation is focused on three principal areas:
-- Identification: photobooths and integrated biometric identification solutions -- Laundry: unattended laundry services -- Kiosks: high-quality digital printing
In addition, the Group operates vending equipment such as children's rides, amusement machines and business service equipment.
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) and public transport venues. The equipment is maintained and serviced by an established network of 700 field engineers.
The Company's shares have been fully-listed on the London Stock Exchange since 1962.
CHAIRMAN'S STATEMENT
Results
The Group continues to perform in line with expectations, delivering strong reported revenue growth and further operational progress in the first half.
The increase in revenues reflects expansion both through acquisitions as well as the continued extension of our laundry business, particularly in Continental Europe. This reflects our strategy to invest consistently in future growth. Furthermore, given the international nature of the business, with 80% of profits generated from operations outside of the United Kingdom, the Group has benefited from favourable currency movements.
Reported revenue increased by 10.5% to GBP122.2 million. The rapid growth in our automated laundries and the unattended digital photo printing kiosks have largely mitigated lower photobooth takings in the UK and Japan.
Reported EBITDA increased by 11.4% to GBP44.9 million, resulting in a 300 bpts improvement in reported EBITDA margin to 36.7% of revenue. Profit before tax increased by 6.1% to GBP32.9 million. At constant currency, revenue increased by 7.8 % and profit before tax increased by 3.1%. Those results include the profit of GBP2.3 million on the sale of the head-office building in Bookham, as well as a one-off charge of GBP0.9 million in relation to the UK retail estate.
The Group remains highly cash generative, with cash generated from operations of GBP39.9 million. The Group's net cash position as at 31 October 2017 was GBP47.1 million, compared with net cash of GBP68.0 million as at 31 October 2016, following dividend payments and investments of GBP34.6 million and GBP34.0 million respectively, in the last 12 months, reflecting the progressive dividend policy, and our ongoing investment in the expansion of existing services and new product innovation. Compared to 30 April 2017, net cash increased by GBP7.9 million, from GBP39.2 million, while in the same period GBP18.6 million was invested in future growth and GBP11.6 million paid out as dividends.
Update on Photo-Me Retail
As previously announced, the Group has undertaken a review of the progress of its Photo-Me Retail operations, the business resulting from the acquisition of the UK Photo Division of Asda Stores in November 2016, in order to reshape the digital printing operations and boost profitability.
In line with the Board's strategy to improve profitability, the Photo-Me Retail business is being refocused to provide online and unattended digital printing kiosks services, as the manned retail outlets are being progressively closed. This action will result in a one-off charge of GBP2.0 million, of which GBP0.9 million has been accounted for in the period to 31 October 2017.
The Board is confident the action taken will improve the future profitability of these operations.
Strategy
The Group remains focused on three market segments: identification, laundry and digital kiosks, currently operating across 18 countries.
The Board is committed to diversifying operations and developing new technologies with multiple applications, which can be rapidly deployed across new and existing geographies, to provide a rapid return on investment.
This strategy is based on expanding the number of units in operation, increasing the yield per unit, and minimising production and operational costs to the Group.
During the first half, we continued to expand the laundry business, increased the breadth of our identification solutions and invested further in research and development. Details of our strategic progress are set out in the Business and Financial Review.
Dividends
The Board is declaring an interim dividend of 3.71 pence per Ordinary Share, an increase of 20.1% compared with the interim dividend of 3.09 pence per ordinary share paid last year.
This increase is in line with the Group's progressive dividend policy and the Board's pledge in 2016 to increase the ordinary dividend by 20% for the financial years ending 30 April 2017 and 30 April 2018. Since 1 May 2016, the Group has returned GBP44.3 million to shareholders by way of dividends.
The interim dividend will be paid on 11 May 2018 to shareholders on the register on 6 April 2018. The ex-dividend date will be 5 April 2018.
Outlook
The Group's performance in the first half was in line with the Board's expectation, notwithstanding the challenges of the macroeconomic environment.
Good operational progress has been made, particularly in the identification and laundry businesses in Continental Europe. The expansion of the Group's estate of automated laundries has continued apace. Sales of laundry equipment have increased according to expectations and the Board is actively looking for further business-to-business laundry acquisition opportunities in Europe. In the medium term, it is anticipated that laundry revenue will grow significantly as a proportion of the total Group revenues and satisfactory progress is being made towards our target of 6,000 total laundry units (owned and sold) deployed by the end 2020.
In the second half, the Group will benefit from the enhanced profitability of Photo-Me Retail's operations once the refocus of activities towards unattended services is complete.
Whilst remaining mindful of the macroeconomic environment, foreign exchange movements and consumer sentiment, the Board remain confident about the Group's prospects.
CHIEF EXECUTIVE'S BUSINESS AND FINANCIAL REVIEW
The Group has performed strongly in the first half. As at 31 October 2017, the Group's estate comprised 47,325 units, an increase of 1.2% compared with the prior year period. Units were added principally in the laundry business (up 47.1%) and in digital kiosks (up 5.6%), while some 800 unprofitable amusement machines were retired, mainly in Asia.
Vending units in operation
As at As at Change
31 October 31 October year on
2017 2016 year
-------------------- ---------------- ---------
No of % of total No of % of
units units total
Continental
Europe 24,229 51% 23,605 50% +2.6%
UK & Republic
of Ireland 12,951 27% 12,602 27% +2.8%
Asia & ROW 10,145 22% 10,553 23% (3.9)%
------- ----------- ------- ------- ---------
47,325 100% 46,760 100% +1.2%
Laundry units
The growth strategy for the laundry business, which was launched in 2012, is predicated on leveraging our well-established relationship with site owners to access prime locations, mainly where we already operate other instant service equipment, such as photobooths.
H1 2018 H1 2017 Change
-------------------------- --------- -------- -------
Owned and operated
units 2,332 1,579 +47.7%
Average monthly takings
per owned unit (EUR)(4) EUR1,508 EUR1,400 +7.7%
(4) Average calculated on mature estate (machines in France, Ireland and Portugal with at least one month full month takings)
Further progress has been achieved by the Group in the laundry business, with total laundry revenues across the Group up 74.7% to GBP17.3 million compared with the prior year period (H1 2017: GBP9.9 million).
The revenue relating to our operated laundry estate increased by 54.2% to GBP11.1 million in the period (H1 2017: GBP7.2 million), due to 47.7% increase in the size of our owned and operated laundry machines estate and a 7.7% increase in average takings per unit to EUR1,508.
Investment programme
A key part of our strategy is the ongoing investment in new technologies to develop new and complementary products and services, to support future growth and create shareholder value.
Cashflow from our operations has remained strong at GBP39.9 million. This has enabled the Board to invest GBP18.7 million in the first half of the financial year, primarily in the roll-out of Revolution laundries and the purchase of launderette shops in Europe, while in the same period, a total of GBP11.6 million was returned to shareholders through dividend payments.
Strategic progress
Photo identification (photobooths and integrated biometric identification solutions)
We have continued to expand our services in Ireland through the deployment of our encrypted photo ID upload technology in our photobooths for Online Passport Applications. Since the Irish Government launched the new system in April 2017, approximately 200 photobooths have been enabled with secure digital upload technologies. We are on track to upgrade a total of 300 units by the end of the financial year.
As previously announced, in the UK, discussions with Her Majesty's Passport Office regarding the new online passport service and testing have concluded positively. The service is being rolled out to photobooths across the UK from mid December 2017.
The progressive rollout of secure and direct data transfer technologies in photobooths in Germany has continued with approximately 20 photobooths upgraded.
Laundry (unattended laundry services)
The owned and operated laundry segment remains a key driver of growth for the Group, with revenues from laundry expected to represent half of total Group revenue in the medium term.
In the first half, the Group delivered strong growth from its laundry operations, with additional units deployed across all regions.
During the period, our manufacturing partner transferred production of the Revolution machine from Hungary to a new facility in Poland. Whilst this transition resulted in a short term slowdown in production, the new facility has the capacity to support production of 150 Revolution units per month from the second half of the financial year. This increase in production volumes will enable the Group to accelerate deployment in the longer term.
The Group remains on track to reach its target to deploy 6,000 (owned and sold) units by the end of 2020.
The Group made good progress on expanding its presence in the launderette market through the acquisition of underperforming launderette businesses in attractive locations. There are currently 66 outlets in operation, including six shops in Japan. Japan is a particularly attractive market where the lifestyle and laundry market dynamics offer significant opportunities for growth.
As part of the strategy to complement its laundry offering, the Group is expanding its activities in the business to business laundry services through acquisitions. Further to the October 2015 acquisition of Fowler (UK) Limited, in July 2017, the Group acquired Inox Equip Limited and Tersus Limited. These UK based B2B laundry operations provide bespoke professional design, procurement and installation of laundry and catering facilities for blue chip companies and institutions such as care homes and hospitals. In line with its strategy, the Group continues to actively seek out further bolt-on acquisitions in this area. The revenues of the B2B laundry services amounted to GBP4.1 million for the six months to 31 October 2017.
Kiosks (High quality digital printing)
The Group has continued to invest in the further deployment of digital kiosks. Compared to the same period last year, a global net total of 311 digital printing kiosks were deployed, mainly in the UK leveraging the Group's presence across the Asda network via the Photo-Me Retail business.
The Group is pleased with the performance of the new equipment, achieving average monthly gross takings per unit of GBP800 across the estate and reaching GBP1,500 in the UK.
The Group will pursue its strategy to further expand the roll-out of the SpeedLab Cube and SpeedLab Bio released last year, offering both the latest state-of -the art digital printing technology and a significantly enhanced consumer experience, creating potential for further growth.
Investment in innovation
Investment in new technologies and products has continued, particularly focused on offering technology via our photobooth network to provide customers with front-end retail banking services and proprietary 3D Capture and enrolment technologies. The Group believes that those new self-service banking front-end booths address the need from financial institutions to find additional, cost effective platforms to support their traditional network, especially in the context of the rationalisation of the banking industry.
Once again, the Group showcased selected new products at TRUSTECH, a large event dedicated to Trust Based Technology in Cannes (France) which took place in November.
At this year's event, The Group's banking booth technology won the 2017 Sesames Award for Best eTransactions Solution, and its 3D Enrolment Kiosk product was a finalist. The Awards are given in recognition of the best innovations in payments, identification, digital security and wireless technology.
Registered office
In July 2017, the Group completed the sale of its head office buildings in Bookham, Surrey. The freehold was sold to Shanly Homes Limited (SHL) for a consideration of GBP2.5 million. The book value of the assets sold was GBP0.1 million and therefore the profit on the sale amounts to approximately GBP2.3 million, taking into account ancillary costs amounting to GBP0.1 million.
This disposal was part of the Group's review of the property portfolio and consolidated its head office and UK operations into one location. This strategy has rationalised the Group's property footprint and has enabled it to achieve further efficiencies in its UK operations.
The Group's new registered office is Unit 3B Blenheim Road, Epsom, KT19 9AP.
REVIEW OF PERFORMANCE BY GEOGRAPHY
The commentaries on the financial performance of the business are set out below in line with the segments as operated by the Board and the management of Photo-Me and consistently with the information prepared to support the Board decision process. Although the Group is not managed around product lines, some commentary below relates to the performance of specific products in the relevant geographies.
Key financials
The Group reports its financial performance based on three principal geographic areas of operation; Continental Europe, UK & Republic of Ireland and Asia & the Rest of the World.
Revenue Operating profit
Six months Six months
ended 31 October ended 31 October
---------------- --------------------------------- ----------------------------------
2017 2016 2016(5) Change 2017 2016 2016(5) Change
GBPm GBPm GBPm % GBPm GBPm GBPm %
Continental
Europe 66.1 61.1 64.6 8.2% 22.5 22.0 23.0 +2.3%
UK & ROI (inc.
corporate) 33.5 25.4 25.5 31.9% 7.9 4.4 4.3 +79.6%
Asia & ROW 22.6 24.1 23.3 (6.2)% 2.50 3.7 3.7 (31.9)%
------ ------ -------- ------- ------ ------ -------- --------
Total 122.2 110.6 113.4 +10.5% 32.9 30.1 31.0 +14.6%
---------------- ------ ------ -------- ------- ------ ------ -------- --------
(5) For constant currency comparatives, average rates of exchange used were GBP/EUR 1.13 (2016: 1.20), GBP/Yen 145 (2016: 139)
Continental Europe
Continental Europe continued to perform extremely strongly in the first half across all business areas. The division, which operates in ten countries, remains the largest contributor to the Group's performance representing 54.1% of total Group revenue (H1 2017: 55.2%) and 68.3% of operating profit (H1 2017: 73.1%).
As at 31 October 2017, the Group had a total of 24,229 units in operation in Continental Europe (H1 2017: 23,605), representing 51% of the total estate sited in the division. This 2.6% increase was driven by the continued roll out of the Group's laundry operations in this region.
France, which is the largest contributor to the Continental Europe segment, performed strongly with revenue (in local currency) up 3.2%, and gross takings from the estate of automated Revolution laundries and the launderette outlets increased by 40.4%.
In Portugal, the success of the laundry deployment is evidenced by the shift in the product mix over the last three years. Between 2015 and 2017, revenue from laundry operations has increased from nil in 2015 to EUR0.7 million for the same period this year. Laundry revenues now represent 63% of revenue in the country. The profit before tax and excluding group fees increased by 118% in the same period.
At constant currency, revenues for the segment increased by 2.3%, primarily driven by a 39.4% increase in takings from our operated laundry machines, as well as the recent upgrades to the photobooth estate with digital security features and roll out of further kiosks.
UK & Republic of Ireland (including Corporate)
The UK & Republic of Ireland contributed 27.4% of Group revenue in the first six months (H1 2017: 24.0%), and 24.0% of operating profit (H1 2017: 14.6%). The division's increased contribution to Group revenue and operating profit reflects continued expansion in laundry in Ireland and the UK, and the successful roll-out of the secure digital upload technology for the Irish Online Passport Service.
Ireland has been a focus for the laundry roll out programme and the country has seen revenues from laundry operations increase from EUR 0.1 million in the six months ended 31 October 2015 to EUR2.1 million during the same period this year. Laundry revenues now account for 70% of the country's total revenue. The profit before tax (excluding group fees) increased by 835% reflecting the speed of shift in product mix since the deployment programme commenced.
As at 31 October 2017, 27% of the Group's estate was sited in this region, the same as prior year. The estate increased by 2.8% to 12,951 machines, reflecting the expansion in the laundry business as well as the roll-out of the new SpeedLab Bio and SpeedLab Cube digital printing kiosks.
As previously mentioned, there has been some softening in the UK market due to consumer disposable income constraints. This resulted in lower revenue from the UK's photo identification operations in the first half, with slightly reduced demand for photo identification. This backdrop will be mitigated by actions to improve operational efficiencies in the business and maximise profitability in the UK. Price rises from GBP5 to GBP6 have been successfully implemented across the UK photobooth estate.
The restructuring of Photo-Me Retail to focus on unattended digital printing kiosks (detailed above) will improve the profitability of the business segment in the second half of the financial year, although there will be a negative impact on revenue in this geography.
Revenue was GBP33.5 million, an increase of 31.9% (acquisitions contribute GBP8.2 million). Operating profit in this segment was GBP7.9 million (H1 2017: GBP4.3 million), with acquisitions accounting for GBP0.7 million, and this also includes a profit of GBP2.3 million on the sale of the head office building in Bookham, as well as a one-off charge of GBP0.9m relating to the first phase of the restructuring of the Photo-Me Retail Business.
Asia & Rest of the World
Asia and the Rest of the World contributed 18.5% of Group revenue (H1 2017: 21.8%) and 7.7% of operating profit (H1 2017: 12.3%). Japan remaining the largest business in the region.
At 31 October 2017, 22% of the Group's estate was sited in Asia and the Rest of the World (H1 2017: 23%) comprising 10,145 machines. This represents a decrease of 3.9%, mainly due to the retirement of some 800 unprofitable amusement machines.
Revenues in this region were GBP22.6 million, a decline of 6.2%, mainly reflecting the impact of currency exchange rates. At constant rates of exchange, the year on year decrease of 3.0% reflected more challenging market conditions and a lower contribution from the Japan My Number ID card programme, compared with the prior year period.
In Japan, the largest of the Group's operations in the region, the Group sees future growth mainly arising from the investment in launderette shops. There are six shops now open.
Photo identification competition has remained high with new entrants looking to capitalise on the longer-term opportunity presented by the Japanese government's My Number initiative which is expected to be made compulsory in the medium term.
Statement of Financial Position
Shareholders' equity as at 31 October 2017 totalled GBP126.8 million (30 April 2017: GBP128.0 million), equivalent to 33.7 pence (30 April 2017: 34.0 pence) per share.
The Group's net financial position remains strong, with a net cash balance of GBP47.1 million as at the 31 October 2017 (30 October 2016: GBP68.0 million, 30 April 2017: GBP39.2 million), reflecting GBP18.7 million of investments and GBP11.6 million distributed to shareholders through dividend payments.
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 and so 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.
Nature of Description and Mitigation
the risk impact
------------------- --------------------------------- --------------------------------------------------------------
Economic
------------------- --------------------------------- --------------------------------------------------------------
Global economic Economic growth The Group focuses on maintaining the characteristics and
conditions has a major influence affordability of its needs driven
on consumer spending. and regulatory products.
A sustained period
of economic recession
could lead to a
decrease in consumer
expenditure in discretionary
areas.
Volatility The majority of The Group naturally hedges its exposure to currency
of foreign the Group's revenue fluctuations on transactions, as relevant.
exchange and profit is generated However, by its nature, in the Board's opinion, it is very
rates outside the UK, difficult to hedge against currency
and the Group results fluctuations arising from translation in consolidation in a
could be adversely cost-effective manner.
impacted by an increase
in the value of
sterling relative
to those currencies.
Regulations
------------------- --------------------------------- --------------------------------------------------------------
Centralisation In many European The Group has developed new systems that respond to this
of production countries where situation, leveraging 3D technology
of ID photos the Group operates, in ID security standards, and securely linking our booths to
if governments were the administration repositories
to implement centralised (solutions in place in France, Ireland, Germany and
image capture, for Switzerland, discussions in the UK, Belgium
biometric passport and Holland).
and other applications
or widen the acceptance Furthermore, the Group also ensures that its ID products
of self-made or remain affordable and of high quality.
home-made photographs
for official document In the UK, the Group is lobbying both alone, and in tandem
applications, the with its trade association, to
Group's revenues propose a solution similar to the ANTS system in France which
and profits could sends photos electronically,
be seriously affected. maintaining the integrity of the photos, compliance with ICAO
standards and, in the Board's
opinion, posing less threat to national security.
Brexit The UK's referendum The Board is keeping the potential impacts of the referendum
decision to leave decision to leave the EU on all
the EU ("Brexit") the Group's operations under review.
will most probably
lead to changes Any potential developments, including new information and
in regulations in policy indications from the UK government
the UK as well as and the EU, will be looked at carefully on a continual basis
modifications to with a view to enhancing the
numerous arrangements ability to take appropriate action targeted at managing and
between the UK and where possible minimising any
other members of adverse repercussions of Brexit.
the EU, affecting
trade and customs The specific impact of Brexit on the Group will depend on the
conditions, taxation, details of the conditions of
movements of resources, the break-up to be negotiated between the UK and the European
etc. Union.
The Board foresees however that, while in the short term the
negative impact of the uncertainty
overshadowing the general UK economy could also overspill on
the Group's UK operations. In
the long term, potential 're-nationalisation' of UK identity
documents (including the conversion
of the EU burgundy passports to the navy blue British
version) as well as strengthened immigration
regulations, could lead to increased requests for the Group's
secure identification products.
Business Since early 2015, The Company has engaged advisers to reduce its exposure to
rates the Valuation Office business rates. The Company has
Authority has been received advice that the vast majority of the affected estate
issuing significantly should not be subject to business
increased assessments rates, and therefore it has systematically appealed before
for some of the the Valuation Tribunal the assessments
Company's estate, received, while negotiating with the authorities to reduce
mainly photobooths that exposure. The Company believes
and printing kiosks, that following the latest decision by the Upper Tribunal on
and in some instances 12 April 2017 in the ATM case,
applying rates that the risk should be capable of successful
the Company considers mitigation.Discussions are ongoing with the Valuation
unreasonable. The Office Agency on this matter.
census campaign
led by the Government
is part of the well-publicised
strategy to systematically
increase the amount
of tax collected
through business
rates. The business
tax risk is limited
to the Company's
operations in the
UK. The Company
has expensed the
cost of the tax
charge as reasonably
estimated.
Strategic
------------------- --------------------------------- --------------------------------------------------------------
Identification Failure to identify Management teams constantly review demand in existing
of new business new business areas markets and potential new opportunities.
opportunities may impact the ability The Group continues to invest in research into new products
of the Group to and technologies.
grow in the long
term.
Inability The realisation The Group regularly monitors the performance of its entire
to deliver of long-term anticipated estate of machines. New technology
anticipated benefits depends enabled secure ID solutions are heavily trialled before
benefits mainly upon the launch and the performance of operating
from the continued growth machines is monitored consistently.
launch of of the laundry business
new products and the successful
development of integrated
secure ID solutions.
Market
------------------- --------------------------------- --------------------------------------------------------------
Commercial The Group has well-established The Group's major key relationships are supported by
relationships long-term relationships medium-term contracts. We actively manage
with a number of our site-owner relationships at all levels to ensure a high
site-owners. The quality of service.
deterioration in
the relationship
with, or ultimately
the loss of, a key
account would 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
more than 1% of
Group turnover.
Operational
------------------- --------------------------------- --------------------------------------------------------------
Reliance The Group sources Extensive research is conducted into quality and ethics
on foreign most of its products before the Group procures products
manufacturers from outside the from any new country or supplier. The Group also maintains
UK. Consequently, very close relationships with both
the Group is subject its suppliers and shippers to ensure that risks of
to risks associated disruption to production and supply are
with international managed appropriately.
trade.
Reliance The Group currently The Board has decided to hold a strategic stock of paper,
on one single buys all its paper allowing for 6 to 10 months' worth
supplier for photobooths of paper consumption, to allow enough time to put in place
of consumables from one single alternative solutions.
supplier. The failure
of this supplier
could have a significant
adverse impact on
paper procurement.
.
Reputation The Group's brands The protection of the Group's brands in its core markets is
are key assets of sustained by products with certain
the business. Failure unique features. The appearance of the machine is subject to
to protect the Group's high maintenance standards. Furthermore,
reputation and brands the reputational risk is diluted as the Group also operates
could lead to a under a range of brands.
loss of trust and
confidence. This
could result in
a decline in the
customer base.
Product and The Board recognises The Group continues to invest in its existing estate, to
service quality that the quality ensure that it remains contemporary,
and safety of both and in constant product innovation to meet customer needs.
its products and The Group also has a programme
services is of critical in place to regularly train its technicians.
importance and that
any major failure
will affect consumer
confidence.
Technological
Failure to The Group operates The Group mitigates this risk by continually focusing on
keep up with in fields where R&D.
advances upgrades to new
in technology technologies are
mission critical,
particularly in
relation to photography
Cyber risk: The Group operates The Group performs an ongoing assessment of the risks and
third party an increasing number ensures that the infrastructure
attack on of photobooths capturing meets the security requirements.
our secure ID data and transferring
ID data transfer it directly to governmental
feeds databases
------------------- --------------------------------- --------------------------------------------------------------
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 October 2017
Unaudited Unaudited Audited
6 months Year
6 months to 31 to 30
to 31 October October April
2017 2016 2017
Total Total Total
GBP
Notes GBP '000 GBP '000 '000
--------------------------- ----- -------------- --------- ---------
Revenue 3 122,228 110,608 214,653
Cost of Sales (84,387) (73,530) (156,427)
--------------------------- ----- -------------- --------- ---------
Gross Profit 37,841 37,078 58,226
Other Operating Income 748 698 2,203
Administrative Expenses (5,822) (7,800) (13,818)
Share of Post-Tax Profits
from Associates 136 94 196
--------------------------- ----- -------------- --------- ---------
Operating Profit 3 32,903 30,070 46,807
Finance Revenue 126 1,092 1,488
Finance Cost (147) (137) (256)
--------------------------- ----- -------------- --------- ---------
Profit before Tax 3 32,882 31,025 48,039
Total Tax Charge 4 (8,589) (8,932) (12,901)
--------------------------- ----- -------------- --------- ---------
Profit for Year 24,293 22,093 35,138
--------------------------- ----- -------------- --------- ---------
Earnings per Share
--------------------------- ----- -------------- --------- ---------
Basic Earnings per Share 6 6.43p 5.86p 9.30p
Diluted Earnings per Share 6 6.40p 5.84p 9.27p
--------------------------- ----- -------------- --------- ---------
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME (continued)
for the six months ended 31 October 2017
6 months to
6 months to 31 October 2017 31 October 2016 Year to 30 April 2017
Other Comprehensive Income GBP '000 GBP '000 GBP '000
------------------------------------------------ --------------------------- ---------------- ---------------------
Items that are or may subsequently be classified
to profit and loss:
Exchange Differences Arising on Translation of
Foreign Operations 629 11,511 1,862
Taxation on exchange differences (2) 918 1,058
------------------------------------------------ --------------------------- ---------------- ---------------------
Total items that are or may subsequently be
classified to profit and loss 627 12,429 2,920
Items that will not be classified to profit and
loss:
Remeasurement (losses)/gains in defined benefit
obligations and other post-employment benefit
obligations - - (48)
Deferred tax on remeasurement (losses)/gains - - 21
------------------------------------------------ --------------------------- ---------------- ---------------------
Total Items that will not be classified to
Profit and Loss - - (27)
------------------------------------------------ --------------------------- ---------------- ---------------------
Total Comprehensive Income for the period 24,920 34,522 38,031
------------------------------------------------ --------------------------- ---------------- ---------------------
Profit for the period Attributable to:
Owners of the Parent 24,216 22,020 34,991
Non-controlling interests 77 73 147
------------------------------------------------ --------------------------- ---------------- ---------------------
24,293 22,093 35,138
------------------------------------------------ --------------------------- ---------------- ---------------------
Total comprehensive income attributable to:
Owners of the Parent 24,784 34,278 37,799
Non-controlling interests 136 244 232
------------------------------------------------ --------------------------- ---------------- ---------------------
24,920 34,522 38,031
------------------------------------------------ --------------------------- ---------------- ---------------------
The accompanying notes form an integral part of these condensed consolidated financial statements.
GROUP CONDENSED STATEMENT OF FINANCIAL POSITION
as at 31 October 2017
Unaudited Unaudited Audited
31 October 31 October 30 April
2017 2016 2017
Notes GBP'000 GBP'000 GBP'000
----------------------------- ----- ---------- ---------- --------
Assets
Non-current assets
Goodwill 7 13,415 12,000 11,812
Other intangible assets 7 14,030 14,061 13,451
Property, plant & equipment 7 81,223 72,366 74,989
Investment property 7 684 715 662
Investment in - associates 1,927 2,211 2,095
Other financial assets
- held to maturity 8 1,829 2,440 2,389
Other financial assets
- available for sale 219 87 81
Deferred tax assets 3,670 4,246 3,641
Trade and other receivables 2,061 1,844 2,025
----------------------------- ----- ---------- ---------- --------
119,058 109,970 111,145
----------------------------- ----- ---------- ---------- --------
Current assets
Inventories 22,684 20,724 19,418
Trade and other receivables 22,765 19,594 18,542
Current tax 3,691 310 288
Cash and cash equivalents 8 63,123 77,182 47,505
----------------------------- ----- ---------- ---------- --------
112,263 117,810 85,753
----------------------------- ----- ---------- ---------- --------
Assets held for sale - 96 96
----------------------------- ----- ---------- ---------- --------
Total assets 231,321 227,876 196,994
----------------------------- ----- ---------- ---------- --------
Equity
Share capital 1,884 1,882 1,882
Share premium 9,384 8,967 8,999
Translation and other
reserves 13,817 22,672 13,249
Retained earnings 101,701 101,332 103,831
----------------------------- ----- ---------- ---------- --------
Equity attributable
to owners of the Parent 126,786 134,853 127,961
Non-controlling interests 1,477 1,353 1,341
----------------------------- ----- ---------- ---------- --------
Total equity 128,263 136,206 129,302
----------------------------- ----- ---------- ---------- --------
Liabilities
Non-current liabilities
Financial liabilities 8 14,248 9,656 8,192
Post-employment benefit
obligations 5,478 5,597 5,456
Provisions - 10 -
Deferred tax liabilities 3,729 2,279 3,087
Trade and other payables 1,725 3,010 2,310
----------------------------- ----- ---------- ---------- --------
25,180 20,552 19,045
----------------------------- ----- ---------- ---------- --------
Current liabilities
Financial liabilities 8 3,620 1,921 2,490
Provisions 601 2,356 2,072
Current tax 10,634 5,708 4,209
Trade and other payables 63,023 61,133 39,876
----------------------------- ----- ---------- ---------- --------
77,878 71,118 48,647
----------------------------- ----- ---------- ---------- --------
Total equity and liabilities 231,321 227,876 196,994
----------------------------- ----- ---------- ---------- --------
The accompanying notes form an integral part of these condensed consolidated financial statements.
GROUP CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 31 October 2017
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 October 31 October 30 April
2017 2016 2017
Notes GBP'000 GBP'000 GBP'000
----------------------------------- ------ ---------- ---------- --------
Cash flow from operating
activities
Profit before tax 32,882 31,025 48,039
Finance cost 147 137 256
Finance revenue (126) (1,092) (1,488)
------------------------------------------- ---------- ---------- --------
Operating profit 32,903 30,070 46,807
Share of post tax profit
from associates (136) (94) (196)
Amortisation of intangible
assets 1,267 891 2,479
Depreciation of property,
plant and equipment 10,698 9,345 19,944
Profit on sale of property,
plant and equipment (2,195) (173) (887)
Exchange differences (689) 961 (727)
Other items (34) (2,309) (3,877)
Changes in working capital:
Inventories (2,376) (1,086) (1,088)
Trade and other receivables (3,033) 3,302 (1,534)
Trade and other payables 5,070 6,484 2,377
Provisions (1,579) (2,337) (2,045)
------------------------------------------- ---------- ---------- --------
Cash generated from operations 39,896 45,054 61,253
Interest paid (147) (137) (256)
Taxation paid (4,948) (9,698) (11,969)
------------------------------------------- ---------- ---------- --------
Net cash generated from operating
activities 34,801 35,219 49,028
------------------------------------------- ---------- ---------- --------
Cash flows from investing
activities
Acquisition of subsidiaries
net of cash acquired (1,354) - -
Investment in associates - (361) (361)
Loans advanced to associates - - (1,014)
Investment in intangible
assets (1,581) (5,218) (6,686)
Proceeds from sale of intangible
assets - 7 9
Purchase of property, plant
and equipment (15,722) (18,779) (36,652)
Proceeds from sale of property,
plant and equipment 2,799 644 2,783
Purchase of available for
sale investments (134) - -
Interest received 126 68 75
Dividends received from associates 304 133 279
------------------------------------------- ---------- ---------- --------
Net cash used in investing
activities (15,562) (23,506) (41,567)
------------------------------------------- ---------- ---------- --------
GROUP CONDENSED STATEMENT OF CASH FLOWS (continued)
for the six months ended 31 October 2017
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 October 31 October 30 April
2017 2016 2017
Notes GBP'000 GBP'000 GBP'000
------------------------------- ----- ---------- ---------- --------
Cash flows from financing
activities
Issue of Ordinary shares
to equity shareholders 387 816 848
Repayment of capital element
of finance leases (87) (103) (173)
Borrowings 8,795 - 693
Repayment of borrowings (1,961) (867) (1,630)
Decrease in assets held to
maturity 573 11 (29)
Dividends paid to owners
of the Parent (11,633) (9,669) (32,629)
Net cash utilised in financing
activities (3,926) (9,812) (32,920)
------------------------------- ----- ---------- ---------- --------
Net increase in cash and
cash equivalents 15,313 1,901 (25,459)
Cash and cash equivalents
at beginning of period 47,505 71,005 71,005
Exchange loss on cash and
cash equivalents 305 4,276 1,959
------------------------------- ----- ---------- ---------- --------
Cash and cash equivalents
at end of period 8 63,123 77,182 47,505
------------------------------- ----- ---------- ---------- --------
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 31 October 2017
Attributable
to owners
Share Share Other Translation Retained of the Non-controlling
capital premium reserves reserve earnings Parent interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
At 1 May 2016 1,877 8,156 1,874 8,633 101,101 121,641 1,109 122,750
Profit for period - - - - 22,020 22,020 73 22,093
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Other comprehensive
(expense)/income
Exchange differences - - - 12,780 - 12,780 171 12,951
Tax on exchange - - - 918 - 918 - 918
Translation reserve
taken to income
statement on
disposal
of subsidiaries - - - (1,440) - (1,440) - (1,440)
Transfers between
reserves - - (93) - 93 - - -
Total other
comprehensive
(expense)/income - - (93) 12,258 93 12,258 171 12,429
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Total comprehensive
(expense)/income - - (93) 12,258 22,113 34,278 244 34,522
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Transactions with
owners of the Parent
Shares issued in
the period 5 811 - - - 816 - 816
Share options - - - - 151 151 - 151
Dividends - - - - (22,033) (22,033) - (22,033)
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Total transactions
with the Parent 5 811 - - (21,882) (21,066) - (21,066)
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
At 31 October 2016 1,882 8,967 1,781 20,891 101,332 134,853 1,353 136,206
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
At 1 May 2016 1,877 8,156 1,874 8,633 101,101 121,641 1,109 122,750
Profit for year - - - - 34,991 34,991 147 35,138
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Other comprehensive
(expense)/income
Exchange differences - - - 3,192 - 3,192 85 3,277
Tax on exchange - - - 1,058 - 1,058 - 1,058
Translation reserve
taken to income
statement on
disposal
of subsidiaries - - - (1,415) - (1,415) - (1,415)
Transfers between
reserves - - (93) - 93 - - -
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Remeasurement gains
in defined benefit
pension scheme
and other
post-employment
benefit obligations - - - - (48) (48) - (48)
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Deferred tax on
remeasurement gains - - - - 21 21 - 21
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Total other
comprehensive
(expense)/income - - (93) 2,835 66 2,808 85 2,893
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Total comprehensive
(expense)/income - - (93) 2,835 35,057 37,799 232 38,031
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Shares issued in
the period 5 843 - - - 848 - 848
Share options - - - - 296 296 - 296
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Deferred tax on
share options - - - - 6 6 - 6
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Dividends - - - - (32,629) (32,629) - (32,629)
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Total transactions
with the Parent 5 843 - - (32,327) (31,479) - (31,479)
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
At 30 April 2017 1,882 8,999 1,781 11,468 103,831 127,961 1,341 129,302
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 October 2017 continued
Attributable
to owners
Share Share Other Translation Retained of the Non-controlling
capital premium reserves reserve earnings Parent interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
At 1 May 2017 1,882 8,999 1,781 11,468 103,831 127,961 1,341 129,302
Profit for period - - - - 24,216 24,216 77 24,293
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Other comprehensive
(expense)/income
Exchange differences - - - 570 - 570 59 629
Tax on exchange - - - (2) - (2) - (2)
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Total other
comprehensive
(expense)/income - - - 568 - 568 59 627
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Total comprehensive
(expense)/income - - - 568 24,216 24,784 136 24,920
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
Transactions with
owners of the Parent
Shares issued in
the period 2 385 - - - 387 - 387
Share options - - - - 132 132 - 132
Dividends - - - - (26,478) (26,478) - (26,478)
--------------------- -------- -------- --------- ------------ --------------- ---------
Total transactions
with the Parent 2 385 - - (26,346) (25,959) - (25,959)
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
At 31 October 2017 1,884 9,384 1,781 12,036 101,701 126,786 1,477 128,263
--------------------- -------- -------- --------- ----------- --------- ------------ --------------- ---------
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 31 October 2017 ("the Interim Report") were approved and authorised for issue by the Board of Directors on 8 December 2017. 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.
Photo-Me's principal activity is the operation of non-food 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
This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 30 April 2017.
The condensed consolidated interim financial statements comprise the unaudited financial information for the six months ended 31 October 2017 and 31 October 2016, together with the audited results to 30 April 2017. 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 year ended 30 April 2017. 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 for the year ended 30 April 2017 are available at www.photo-me.com or upon request from the Company's registered office at Unit 3B, Blenheim Rd, Epsom, KT19 9AP.
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 year ended 30 April 2017 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 unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying 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 year ended 30 April 2017, except as indicated below.
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 2018 and future reporting periods. The most significant standards and interpretations which are likely to have a more material impact on the Group's financial statements were listed in the Group's 2017 Annual Report. The effect of adopting new standards for the 2018 year end has not had a material impact on this Interim Report.
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 year ended 30 April 2017.
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.
Risks and uncertainties and cautionary statement regarding forward looking statements
The principal risks and uncertainties affecting the business activities of the Group are set out in the "Risks and Uncertainties" section of the Interim Management Report, contained within this Interim Report. The cautionary statement regarding forward looking statements is shown below.
Going Concern
The Annual Report for the year ended 30 April 2017 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 31 October 2017.
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
IFRS8 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 the adjusted operating profit level before special items, interest and taxation.
In accordance with IFRS8, no segment information is provided for assets and liabilities in the disclosures below, as this information is not regularly provided to the Chief Operating Decision Maker.
Seasonality of operations
Historically, the first half of the financial year is seasonally the strongest for the Group in terms of profits, and this is expected to be the case again for the current year ending 30 April 2018.
United
Kingdom
Asia Europe & Ireland Total
6 months to 31 October 2017 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------- ------- ---------- --------
Total revenue 22,609 71,578 33,669 127,856
Inter segment sales (3) (5,423) (202) (5,628)
----------------------------------- ------- ------- ---------- --------
Revenue from external customers 22,606 66,155 33,467 122,228
----------------------------------- ------- ------- ---------- --------
EBITDA 4,707 29,152 10,097 43,956
Depreciation and amortisation (2,323) (6,671) (2,804) (11,798)
----------------------------------- ------- ------- ---------- --------
Operating profit excluding
associates 2,384 22,481 7,293 32,158
Share of post-tax profits from
associates 136
Corporate income excluding
depreciation and amortisation 776
Corporate depreciation and
amortisation (167)
----------------------------------- ------- ------- ---------- --------
Operating profit 32,903
Finance Revenue 126
Finance costs (147)
----------------------------------- ------- ------- ---------- --------
Profit before tax 32,882
Tax (8,589)
----------------------------------- ------- ------- ---------- --------
Profit for period 24,293
----------------------------------- ------- ------- ---------- --------
Capital expenditure 3,499 10,100 3,426 17,025
Corporate capital expenditure 327
----------------------------------- ------- ------- ---------- --------
Total capital expenditure 17,352
----------------------------------- ------- ------- ---------- --------
Reconciliation of operating
profit
United
Kingdom
Asia Europe & Ireland Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------- ------- ---------- --------
Operating profit before associates 2,384 22,481 7,293 32,158
Share of past tax profits from
associates 136 - - 136
Corporate operating profit - 556 53 609
----------------------------------- ------- ------- ---------- --------
Total operating profit 2,520 23,037 7,346 32,903
----------------------------------- ------- ------- ---------- --------
United
Kingdom
Asia Europe & Ireland Total
6 months to 31 October 2016 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------- ------- ---------- --------
Total revenue 24,259 68,243 25,546 118,048
Inter segment sales (127) (7,175) (138) (7,440)
--------------------------------------- ------- ------- ---------- --------
Revenue from external customers 24,132 61,068 25,408 110,608
--------------------------------------- ------- ------- ---------- --------
EBITDA 5,592 28,012 6,904 40,508
Depreciation and amortisation (1,890) (6,016) (2,190) (10,096)
--------------------------------------- ------- ------- ---------- --------
Operating profit excluding
associates 3,702 21,996 4,714 30,412
Share of post-tax profits from
associates 94
Corporate costs excluding depreciation
and amortisation (296)
Corporate depreciation and
amortisation (140)
--------------------------------------- ------- ------- ---------- --------
Operating profit 30,070
Finance Revenue 1,092
Finance costs (137)
--------------------------------------- ------- ------- ---------- --------
Profit before tax 31,025
Tax (8,932)
--------------------------------------- ------- ------- ---------- --------
Profit for period 22,093
--------------------------------------- ------- ------- ---------- --------
Capital expenditure 3,783 9,686 9,838 23,307
Corporate capital expenditure 774
--------------------------------------- ------- ------- ---------- --------
Total capital expenditure 24,081
--------------------------------------- ------- ------- ---------- --------
Reconciliation of operating
profit
United
Kingdom
Asia Europe & Ireland Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------- ------- ---------- --------
Operating profit before associates 3,702 21,996 4,714 30,412
Share of past tax profits from
associates 94 - - 94
Corporate operating profit - 474 (910) (436)
--------------------------------------- ------- ------- ---------- --------
Total operating profit 3,796 22,470 3,804 30,070
--------------------------------------- ------- ------- ---------- --------
Reconciliation of EBITDA
6 months 6 months Year
to 31 to 31 to 30
October October April
2017 2016 2017
GBP
GBP '000 GBP '000 '000
------------------------------ -------- -------- -------
Profit before tax 32,882 31,025 48,039
Finance income (126) (1,092) (1,488)
Finance costs 147 137 256
Depreciation and amortisation 11,965 10,392 22,423
------------------------------- -------- -------- -------
EBITDA 44,868 40,462 69,230
------------------------------- -------- -------- -------
United
Kingdom
Asia Europe & Ireland Total
Year ended 30 April 2017 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------- -------- ---------- --------
Total revenue 49,472 124,739 53,870 228,081
Inter segment sales (128) (13,069) (231) (13,428)
--------------------------------------- ------- -------- ---------- --------
Revenue from external customers 49,344 111,670 53,639 214,653
--------------------------------------- ------- -------- ---------- --------
EBITDA 12,340 46,978 12,349 71,667
Depreciation and amortisation (3,940) (13,038) (5,041) (22,019)
--------------------------------------- ------- -------- ---------- --------
Operating profit excluding
associates 8,400 33,940 7,308 49,648
Share of post-tax profits from
associates 196
Corporate costs excluding depreciation
and amortisation (2,633)
Corporate depreciation and
amortisation (404)
--------------------------------------- ------- -------- ---------- --------
Operating profit 46,807
--------------------------------------- ------- -------- ---------- --------
Finance Revenue 1,488
Finance costs (256)
--------------------------------------- ------- -------- ---------- --------
Profit before tax 48,039
Tax (12,901)
--------------------------------------- ------- -------- ---------- --------
Profit for year 35,138
--------------------------------------- ------- -------- ---------- --------
Capital expenditure 7,227 20,125 15,301 42,653
Corporate capital expenditure 820
--------------------------------------- ------- -------- ---------- --------
Total capital expenditure 43,473
--------------------------------------- ------- -------- ---------- --------
Reconciliation of operating
profit
United
Kingdom
Asia Europe & Ireland Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------- -------- ---------- --------
Operating profit before associates 8,400 33,940 7,308 49,648
Share of post tax profits from
associates 196 - - 196
Corporate operating profit - 938 (3,975) (3,037)
--------------------------------------- ------- -------- ---------- --------
Total operating profit 8,596 34,878 3,333 46,807
--------------------------------------- ------- -------- ---------- --------
4. Taxation
6 months 6 months
to to Year to
31 October 31 October 30 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
---------------------- ----------- ----------- ---------
Profit before tax 32,882 31,025 48,039
Total taxation charge 8,589 8,932 12,901
----------------------- ----------- ----------- ---------
Effective tax rate 26.1% 28.8% 26.9%
----------------------- ----------- ----------- ---------
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 full year profits to 30 April 2018.
The UK 2016 Finance Act was enacted in September 2016 and confirmed the basic rate of UK Corporation tax at 19% for the financial years ending 30 April 2018 and 30 April 2019 and 17% for the financial year ending 30 April 2020.
5. Dividends
Dividends paid and
proposed
31 October 31 October 30 April
2017 2016 2017
--------------- --------------- ---------------
pence pence pence
per per per
share GBP'000 share GBP'000 share GBP'000
------------------------- ------ ------- ------ ------- ------ -------
Interim
H1 2016 paid on 12
May 2016 2.575 9,669 2.575 9,669
H1 2017 paid on 11
May 2017 3.09 11,633
Final
FY 2016 paid 10 November
2016 3.285 12,365 3.285 12,365
FY 2017 approved at
AGM held
on 25 October 2017 3.94 14,845
Special
FY 2016 paid 10 November
2016 2.815 10,595
7.03 26,478 5.86 22,093 8.675 32,629
------------------------- ------ ------- ------ ------- ------ -------
Financial year ending 30 April 2018
Interim dividend for the six months ended 31 October 2017
The Board has declared an interim dividend of 3.71p per share for the six months ended 31 October 2017, to be paid on 11 May 2018 to shareholders on the register on 6 April 2018. The ex-dividend date will be 5 April 2017
Financial year ended 30 April 2017
The Board declared an interim dividend of 3.09p per share for the six months ended 31 October 2016, which was paid to shareholders on 11 May 2017.
The Board proposed a final dividend of 3.94p per share for the year ended 30 April 2017 which was approved by shareholders at the Annual General Meeting held on 25 October 2017. It is included in the amount shown as dividend in transactions with owners of the parent in the Group Statement of Changes in Equity and in current liabilities - trade and other payables in the Group Statement of Financial Position. This dividend was paid on 10 November 2017.
Financial year ended 30 April 2016
The interim dividend for 2016 of 2.575p per share was paid on 12 May 2016.
The final dividend for 2016 of 3.285p per share amounting to GBP12,365,000 was approved by the shareholders at the Annual General Meeting on 20 October 2016. It is included in the amount shown as dividend in transactions with owners of the parent in the Group Statement of Changes in Equity and in current liabilities -trade and other payables in the Group Statement of Financial Position. This dividend was paid on 10 November 2016.
In addition, the Board proposed a special dividend of 2.816p per share, GBP10,596,000 which was paid on 10 November 2016. This dividend is not shown in these consolidated financial statements.
6. 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 Year
to 31 to 31 to 30
October October April
2017 2016 2017
----------------------------------- ---------- ---------- -------
Basic earnings per share 6.43p 5.86p 9.30p
Diluted earnings per share 6.40p 5.84p 9.27p
----------------------------------- ---------- ---------- -------
Earnings available to shareholders
(GBP'000) 24,216 22,020 34,991
Weighted average number of
shares in issue in the period
- basic ('000) 376,572 375,838 376,141
- including dilutive share
options ('000) 378,160 377,312 377,462
----------------------------------- ---------- ---------- -------
7. Non-current assets - intangibles, property, plant and equipment and investment property
Other Property,
Intangible plant Investment
Goodwill assets & equipment property
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- ----------- ------------ ----------
Net book value at 1 May
2016 11,606 8,706 56,094 629
Exchange adjustment 394 1,035 7,217 94
Additions
- photobooths & vending
machines - - 17,229 -
- research & development - 1,637 - -
- other additions - 616 1,286 -
Acquisitions - 2,965 348 -
Transfers - - - -
Depreciation provided
in the period - (891) (9,337) (8)
Net book value of disposals - (7) (471) -
----------------------------- -------- ----------- ------------ ----------
Net book value at 31 October
2016 12,000 14,061 72,366 715
----------------------------- -------- ----------- ------------ ----------
Net book value at 1 May
2016 11,606 8,706 56,094 629
Exchange adjustment 206 547 3,942 48
Additions
- photobooths & vending
machines - - 33,787 -
- research & development - 2,390 - -
- other additions - 4,296 3,000 -
New subsidiaries- net
book value - - - -
Transfers - - - -
Depreciation provided
in the period - (2,479) (19,929) (15)
Transfer to assets held
for sale - - - -
Net book value of disposals - (9) (1,905) -
----------------------------- -------- ----------- ------------ ----------
Net book value at 30 April
2017 11,812 13,451 74,989 662
----------------------------- -------- ----------- ------------ ----------
Net book value at 1 May
2017 11,812 13,451 74,989 662
Exchange adjustment 87 265 1,633 30
Additions
- photobooths & vending
machines - - 13,469 -
- research & development - 1,265 - -
- other additions - 316 2,302 -
Acquisitions 1,516 - 28 -
Depreciation provided
in the period - (1,267) (10,690) (8)
Net book value of disposals - - (508) -
----------------------------- -------- ----------- ------------ ----------
Net book value at 31 October
2017 13,415 14,030 81,223 684
----------------------------- -------- ----------- ------------ ----------
Included in additions for property, plant & equipment are the following amounts under finance leases.
31 October 31 October 30 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
Property, plant & equipment
additions - finance leases 49 84 135
---------------------------- ---------- ---------- --------
8. Net Cash
31 October 31 October 30 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
---------------------------- ---------- ---------- --------
Cash and cash equivalents
per statement of financial
position 63,123 77,182 47,505
Financial assets - held
to maturity 1,829 2,440 2,389
Non-current instalments
due on bank loans (13,996) (9,304) (7,894)
Current instalments due
on bank loans (3,479) (1,750) (2,344)
Leases (393) (523) (444)
Net cash 47,084 68,045 39,212
----------------------------- ---------- ---------- --------
At 31 October 2017, GBP1,829,000 (31 October 2016: GBP2,440,000, 30 April 2017: GBP2,389,000) 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 tables below, which are 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.
Other movements for loans and finance leases for the period ended 31 October 2017, period ended 31 October 2016 and year ended 30 April 2017 include transfers between non-current and current and new finance leases taken out in the period.
1 May Exchange Other Cash 31 October
2016 difference movements flow 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------- ----------- ---------- -------- ----------
Cash and cash equivalents
per statement of financial
position 71,005 4,276 - 1,901 77,182
Financial assets -
held to maturity 2,253 198 - (11) 2,440
Non-current loans (8,866) (1,316) 878 - (9,304)
Current loans (1,515) (224) (878) 867 (1,750)
Leases (462) (80) (84) 103 (523)
Net cash 62,415 2,854 (84) 2,860 68,045
---------------------------- ------- ----------- ---------- -------- ----------
1 May Exchange Other Cash 30 April
2016 difference movements flow 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------- ----------- ---------- -------- ----------
Cash and cash equivalents
per statement of financial
position 71,005 1,959 - (25,459) 47,505
Financial assets -
held to maturity 2,253 165 - (29) 2,389
Non-current loans (8,866) (678) 1,650 - (7,894)
Current loans (1,515) (116) (1,650) 937 (2,344)
Leases (462) (32) (123) 173 (444)
Net cash 62,415 1,298 (123) (24,378) 39,212
---------------------------- ------- ----------- ---------- -------- ----------
1 May Exchange Other Cash 31 October
2017 difference movements flow 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------- ----------- ---------- -------- ----------
Cash and cash equivalents
per statement of financial
position 47,505 305 - 15,313 63,123
Financial assets -
held to maturity 2,389 13 - (573) 1,829
Non-current loans (7,894) (356) 3,049 (8,795) (13,996)
Current loans (2,344) (47) (3,049) 1,961 (3,479)
Leases (444) 13 (49) 87 (393)
Net cash 39,212 (72) (49) 7,993 47,084
---------------------------- ------- ----------- ---------- -------- ----------
9. Fair Values
Fair values of financial instruments by class
There is no difference between the fair values and the carrying value of financial assets and financial liabilities held in the Group's Statement of financial position.
Held to maturity, available-for-sale financial assets and derivatives
The fair value is based on quoted prices at the balance sheet date for quoted investments and other valuation techniques for unquoted investments. For restricted deposits accounts held to maturity, the fair value is estimated at the present value of future cash flows, discounted at the market rate of interest at the balance sheet date.
Trade and other receivables
The fair value of trade and other receivables is estimated at the present value of future cash flows, discounted at the market rate of interest at the balance sheet date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated at its carrying value where cash is repayable on demand. For short-term cash deposits and other items not repayable on demand, fair value is estimated at the present value of future cash flows, discounted at the market rate of interest at the balance sheet date.
Interest bearing borrowings
Fair value is calculated based on the present value of future principal and interest cash flows discounted at the market rate of interest at the balance sheet date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
Trade and other payables
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market rate of interest at the balance sheet date if the effect is material.
FRS13 requires an analysis of financial instruments carried at fair value by valuation method as follows.
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as process) or indirectly (that is derived from prices).
Level 3 Inputs for asset or liability that are not based on observable market data.
The Group's financial instruments are fair valued at level 2 with the exception of other financial assets available for sale investments which are valued at level 3.
Financial Instruments by category
The tables below show financial instruments by category
31 October 2017 Loans Available
and receivables for sale Total
GBP'000 GBP'000 GBP'000
------------------------------------- ---------------- --------- -------
Assets as per statement of financial
position
Other financial assets - held
to maturity 1,829 - 1,829
Other financial assets - available
for sale - 219 219
Trade and other receivables 21,256 - 21,256
Cash and cash equivalents 63,123 - 63,123
------------------------------------- ---------------- --------- -------
Total 86,208 219 86,427
------------------------------------- ---------------- --------- -------
Other
financial
liabilities
at amortised
cost Total
GBP'000 GBP'000
------------------------------------- ---------------- --------- -------
Liabilities as per statement
of financial position
Borrowings 17,475 17,475
Leases 393 393
Trade and other payables excluding
non-financial liabilities 46,138 46,138
------------------------------------- ---------------- --------- -------
Total 64,006 64,006
------------------------------------- ---------------- --------- -------
31 October 2016 Loans Available
and receivables for sale Total
GBP'000 GBP'000 GBP'000
------------------------------------- ---------------- --------- -------
Assets as per statement of financial
position
Other financial assets - held
to maturity 2,440 - 2,440
Other financial assets - available
for sale - 87 87
Trade and other receivables 18,276 - 18,276
Cash and cash equivalents 77,182 - 77,182
------------------------------------- ---------------- --------- -------
Total 97,898 87 97,985
------------------------------------- ---------------- --------- -------
Other
financial
liabilities
at amortised
cost Total
GBP'000 GBP'000
------------------------------------- ---------------- --------- -------
Liabilities as per statement
of financial position
Borrowings 11,054 11,054
Leases 523 523
Trade and other payables excluding
non-financial liabilities 48,648 48,648
------------------------------------- ---------------- --------- -------
Total 60,225 60,225
------------------------------------- ---------------- --------- -------
30 April 2017 Loans Available
and receivables for sale Total
GBP'000 GBP'000 GBP'000
------------------------------------- ---------------- --------- -------
Assets as per statement of financial
position
Other financial assets - held
to maturity 2,389 - 2,389
Other financial assets - available
for sale - 81 81
Trade and other receivables 17,080 - 17,080
Cash and cash equivalents 47,505 - 47,505
------------------------------------- ---------------- --------- -------
Total 66,974 81 67,055
------------------------------------- ---------------- --------- -------
Other
financial
liabilities
at amortised
cost Total
GBP'000 GBP'000
------------------------------------- ---------------- --------- -------
Liabilities as per statement
of financial position
Borrowings 10,238 10,238
Leases 444 444
Trade and other payables excluding
non-financial liabilities 39,486 39,486
------------------------------------- ---------------- --------- -------
Total 50,168 50,168
------------------------------------- ---------------- --------- -------
Included in liabilities trade and other payables at 31 October 2017 are deferred consideration payables of GBP2,800,000 (30 April 2017 GBP2,550,000 and 31 October 2016 GBP2,550,000) being contingent consideration relating to acquisitions made since September 2015.
10. Related parties
The Group's significant related parties are disclosed in the 2017 Annual Report and include its associates, its pension funds and the Company's Directors. During the 6 months ended 31 October 2017, there were no new related parties and no additional related party transactions have taken place that have materially affected the financial position or performance of the Group. In addition there were no material changes in the nature and relationship of transactions with related parties to those identified in the 2017 Annual Report.
11. Business combinations
In July 2017, the Group acquired 100% of the voting rights and share capital of Inox Equip Limited (Inox) and Tersus Equip Limited (Tersus), both UK based, business to business laundry businesses which provide bespoke professional design, procurement and installation of laundry and catering equipment facilities for blue chip companies and institutions such as care homes and hospitals. This acquisition was in line with the Group's strategy to expand its business to business laundry capabilities.
The results of these companies have been consolidated from 1 August 2017.
The table below shows the provisional value of net assets acquired and the consideration paid and payable.
GBP '000
------------------------------------ --------
Property, plant and equipment 28
Total non-current assets 28
-------------------------------------- --------
Inventory 404
Trade and other receivables 1,158
Cash and cash equivalents 155
-------------------------------------- --------
Total current assets 1,717
-------------------------------------- --------
Total assets 1,745
Deferred tax liabilities (2)
Trade and other payables (1,249)
Current tax (51)
-------------------------------------- --------
Total liabilities (1,302)
-------------------------------------- --------
Total identifiable net assets 443
-------------------------------------- --------
Total identifiable net assets
excluding net cash and cash
equivalents 288
-------------------------------------- --------
Goodwill 1,516
-------------------------------------- --------
Goodwill and total identifiable
net assets 1,959
-------------------------------------- --------
Cost of investment 1,959
Contingent consideration 450
-------------------------------------- --------
Initial cash outlay on purchase
of subsidiaries (1,510)
Net cash acquired with subsidiaries 155
-------------------------------------- --------
Net cash consideration per
Group Statement of Cash Flows (1,354)
-------------------------------------- --------
Contingent consideration
A further GBP450,000 of consideration is payable to the vendors of the acquired businesses contingent on earnings performance in the 12 month periods ending 31 July 2018 and 31 July 2019. The directors consider it likely that the performance conditions will be met and have therefore recognised the maximum amounts payable.
Acquired receivables
The provisional fair value of receivables acquired was GBP1,158,000. The gross contractual amounts receivable was GBP1,233,000 and at the acquisition date, GBP75,000 of contractual cash flows were not expected to be received.
The following amounts have been included in the Group's post acquisition results in respect of the acquired businesses:
GBP '000
------------------ --------
Revenue 1,985
Profit before tax 442
Profit after tax 327
-------------------- --------
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)
8 December 2017
INDEPENT REVIEW REPORT TO PHOTO-ME INTERNATIONAL PLC
Conclusion
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2017 which comprises the Group condensed statement of comprehensive income, the Group condensed statement of financial position, the Group condensed statement of cash flows, the Group condensed statement of changes in equity and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2017 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
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 UK. 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. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
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.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this 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 reached.
Steve Masters
for and on behalf of KPMG LLP
Chartered Accountants
1 Forest Gate
Brighton Road
Crawley
RH11 9PT
8 December 2017
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 6 months to 31 October 2017. 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.photo-me.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
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 company news service from the London Stock Exchange
END
IR TBBFTMBABMJR
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December 11, 2017 02:00 ET (07:00 GMT)
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