Photo-Me future still bleak

Failed sale of business blamed

17 December 2007 12:07 GMT / By Katie Scott

Photo booth operator and manufacturer Photo-Me International is blaming failed efforts to sell its core business for disappointing half year profits.

According to the BBC, interim profits for the six months to 31 October fell to £1.6m from £12.9m for the same period last year.

Photo-Me said it was also unlikely to make a profit in the second half of the financial year.

Upon the news, the company's shares fell more than 10% in early trading.

This latest piece of bad news tops off a rough period for Photo-Me.

This year has so far seen a shareholder rebellion that resulted in the departures of both Photo-Me's chairman Vernon Sankey and chief executive Serge Crasnianski.

The rout came after Photo-Me's top management failed to find a buyer for its vending business, which accounts for nearly two-thirds of sales.

Investment company Principle Capital and hedge fund Cycladic, which own 18.2% of the photo booth business between them, campaigned for the pair's removal, citing increasingly discontent with how the company was being run.

The proposed sale was part of a wider bid to pull the company back from loss, as digital photography and home printing in particular impacted upon sales.

Photo-Me pointed to the infighting that resulted from the proposed sale as having impacted its profitability for the year to date.

It said in a statement that it had had to "contend with the unsettling effect on customers, staff and suppliers of the related uncertainty" stemming from the failed sale as well as the "unsought prominence of the group's corporate affairs".

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