Half Yearly Report

RNS Number : 5754I

Photo-Me International PLC

10 December 2015

 



PHOTO-ME INTERNATIONAL PLC - INTERIM RESULTS ANNOUNCEMENT FOR THE PERIOD ENDED 31 OCTOBER 2015

STRONG FIRST HALF PERFORMANCE

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 2015. 

Results highlights:

	2015 (CC) †	2014	Change	2015	Change
Revenue	£98.7m	£96.4m	+2.4%	£92.8m	-3.7%
Underlying EBITDA*	£35.8m	£33.8m	+6.0%	£33.4m	-1.0%
Underlying Pre-tax Profit*	£27.7m	£25.3m	+9.3%	£25.8m	+2.0%
Net Cash **		£64.7m		£67.8m	+£3.1m
Underlying EPS (diluted)*		4.73p		4.98p	+5.3%
Ordinary Dividend per share		2.34p		2.575p	+10.0%

† At constant currency (CC)

   Average rates of exchange used: £/€ 1.38 (2014: 1.25)     £/Yen 189 (2014: 173)

* Before profit on sale of land of £nil (2014: £3.5m)

* *As defined in note 8 to the accounts

Financial Highlights

·    Solid revenue growth of +2.4% at constant currency

·    Underlying pre-tax profits up to record £25.8m; up +9.3% in constant currency

·    Cash position remains very strong and £7.1m higher than at year-end

·    Dividend increased by 10%, in line with guidance

Operational Highlights

·    Photobooth estate increased by 2.2%

·    Solid growth across Continental Europe and Japan

·    Promising launch of the Philippe Starck designed new photo printing kiosks

·    Continued strong progress in laundry, with a 90% increase in turnover

·    Strong entry into the wider UK laundry industry through the acquisition of Fowler(UK), a laundry equipment distributor

·    Formal trialing of the new carwash product in France, supported by the strategic partnership with Kärcher

John Lewis, Non-executive Chairman, said:

"Photo-Me has struggled to grow its revenue in recent years and the 2.4% increase in constant currency revenue this half-year represents a real step change. While we are continuing to see a good trading performance in Japan, more importantly - and as we had anticipated - our growing laundry business is increasingly having a positive impact.

Our new product pipeline - including the next generation of Revolution - is very promising and our cash flow and net cash position both remain extremely strong. In addition, our purchase of Fowler(UK) is expected to substantially improve our prospects in the UK laundry market going forward.

The Board remains confident for the outlook of the business over the rest of the year and remains optimistic about future prospects."

Enquiries:

Photo-Me International                                                                  01372 453 399

Serge Crasnianski or Gabriel Pirona

Media

Madano Partnership                                     

Julien Cozens                                                                                   020 7593 4000

Investors:

IR Focus

Neville Harris                                                                                   07909 976044

CHAIRMAN'S STATEMENT

Results

Turnover at constant rates of exchange rose by +2.4% driven by solid growth in Continental Europe, supported by an increased contribution from laundry, and by the continued strength of the Japanese business. Headline turnover contracted by 3.7%, due to the adverse impact of exchange rates.

Underlying pre-tax profits at constant rate of exchange increased strongly to £27.7m.

The cash performance of the business remained strong and at the half-year stage the net cash position was £67.8m, an increase of £7.1m since April 30, 2015.

Strategy

Our strategy is focused on the development of new complementary products that build upon the strength of the ID photobooth business and offer diversified revenue and profit streams for the future. This has produced the Philippe Starck-designed photobooth and the Revolution laundry units in the recent past. This year the Group signed a five-year agreement with Moneygram which would see Moneygram roll out money transfer services at Photo-Me's photo printing kiosks worldwide. The Group is developing a specific version of its kiosks enabling the new service to be launched on a trial basis in France in 2016.

Photo-Me began the roll-out of a new car wash system in November 2014. Satisfied with the early results, Photo-Me has agreed with Kärcher, the world market leader in cleaning technology, a three-year period of exclusivity in the retail market in France, in order to support possible larger scale expansion after the trial period.

Having made strong progress in reducing our manufacturing costs, we are now focusing on rolling out our laundry product line aggressively and will increasingly focus on developing new markets for the photo printing lines and the photobooths, through 3D and extensive technological enhancements to anticipate the new standards in 3D face recognition.

Dividends

In line with the commitment that we made at the time of our preliminary results in June 2015, the Board is declaring an interim dividend of 2.575 pence per share, an increase of 10% over the interim dividend of 2.34 pence per share paid last year.

The interim dividend will be paid on 12 May 2016 to shareholders on the register on 8 April 2016, with an ex-dividend date of 7 April 2016.

Outlook 

 The Board remains confident for the outlook of the business over the rest of the year and remains optimistic about future prospects.

John Lewis

Non-executive Chairman

CHIEF EXECUTIVE'S BUSINESS AND FINANCIAL REVIEW  

BUSINESS REVIEW

Photo-Me's principal activity is the operation of unattended vending equipment, primarily photo booths and laundry units, and also digital printing kiosks, photobook makers and amusement machines.

At the end of October 2015 the Group's estate comprised 45,241 units (2014: 44,306) of which photobooths comprised 60%. Growth in the overall estate was 2.1% with growth in the photobooth estate of 2.2%

	Vending units
	2015	2014	Change
Continental Europe	22,687	21,914	+3.5%
UK & Republic of Ireland	12,573	12,685	-0.9%
Asia & ROW	9,981	9,707	+2.8%
Total	45,241	44,306	+2.1%

The business is focused on three main geographic regions at present: Continental Europe, UK & Republic of Ireland, and Asia & Rest of World. 

Geographical analysis of revenue and profit (by origin)

					Revenue				Underlying Operating profit1
Six months to 31 October		2015		2015(CC)		2014			2015	2015(CC)		2014
		£m		£m		£m			£m	£m		£m
Continental Europe		51.6		56.0		53.9			17.6	19.2		18.4
UK & ROI		23.0		23.0		23.6			5.4	5.4		5.1
Asia & ROW		18.2		19.7		18.9			3.4	3.7		3.5
Corporate									(1.0)	(1.0)		(1.7)
		92.8		98.7		96.4			25.4	27.3		25.3
1 excluding profit on sale of property

CONTINENTAL EUROPE

The Group now operates in ten countries, with the very recent launch of our laundry range in Spain. Continental Europe contributed 55% (2014: 56%) of Group revenue and 69% (2014:73%) of the underlying operating profit.

Revenue (at CC) increased strongly by 4.0%. Whilst the photobooth turnover grew by 2.7% (CC), the takings of the laundry machines operated by the Group more than doubled (CC). Operating profits rose by 3.8% on a constant currency basis.

The European photobooth estate increased by 1.4% year-on-year with the main areas for growth being France, Germany and Switzerland, where - in spite of the challenging conditions of the mature ID photo market - the performance benefits from the continued rollout of higher-margin Starck booths. Across Europe, 3,263 Starck booths have now been deployed.

The roll-out of the Group's laundry product - branded Revolution - predominantly utilizing the same sites as the photobooth estate, continues to progress well. At the end of the half-year, cumulatively (across the Group) the Group had sold 497 of these units and operated 1,200. Going forward, it remains the Group's intention to keep the operating/sale ratio towards 80/20.

Total (including UK & Ireland)	2015	2014	Change
Owned (total including rented equipment)	1,200	374	+221%
Sold (cumulative total at the end of the period)	497	370	+34%
Ave. revenue per owned unit (€)†	1,393	1,402	-

 († Average calculated only on machines in France, Ireland and Portugal with at least one full month's takings)

The results from the units in operation in France, Ireland and Portugal remain extremely encouraging with monthly takings averaging €1,400 during the period across the more established machines in the operating estate. In the six-month period ended 31 October 2015, the turnover of the laundry business increased by 90% to £5.5m (2014: £2.9m).

The Group now has laundry units in ten countries. The most recent launch has been in  Spain - a new territory for the Group -where there are now a handful of units with supermarkets and petrol stations being the initially-targeted sites.  The Group continues to be encouraged by the potential in other locations where there is natural demand for heavy-duty laundry and is also considering additional country launches. The performance of the product since launch in Portugal and Ireland demonstrates the strong potential. While the countries are small in overall Group terms, laundry revenues now exceeds almost 40% of total revenues in these countries having been launched only in the middle of 2014.

The manufacturing facilities for the laundry business are in Hungary and the gradual planned expansion of capacity is proceeding according to plan with a current production capacity of approximately 80 units per month. The Group has recently finalised the design of "Revolution 2", expected to be launched in 2016, which again comprises three machines but with a footprint of only 5sqm² compared with 10sqm² for the current model. This is expected to increase the potential market for the product overall and is likely to be more attractive in Far Eastern markets.

The Group continues to operate over 4,700 digital printing kiosks - primarily in France and Switzerland which are being progressively upgraded to accept all models of memory cards and other media. The new Starck-designed kiosk has also recently been introduced into a number of locations in France. This new generation of kiosk has no real comparator in terms of design and performance. The new kiosks are fully integrated to major social media networks and enable easy photo printing from smartphones, tapping into the growing demand from consumers.  The initial results of that new product range are extremely promising, and trialing will continue in France in coming months.

Europe remains the centre of the Group's R&D efforts and new product development. Aside from the new digital printing kiosk (see above) and new versions of the Starck photobooth, work continues on the 3D technology, a compact version of the automated Revolution laundry, as well as the optimization of the energy consumption in photolights.

The Group has also begun trialing its carwash concept in earnest and as previously announced will be progressively introducing them in France over the next twelve months before more formally assessing the rollout potential.

UK & IRELAND

This division contributed 25% (2014: 24%) of Group revenue and 21% (2014: 20%) of operating profit.

The underlying Operating Profit in the UK and Ireland grew by 7.6% driven by operational costs optimization, despite a slight contraction in turnover (-2.7% at CC).

Growth in photobooth numbers was 1.6% year-on-year while there was a 20% reduction on bouly/amusement machines which generate little revenue and perform below the Group profitability standards due to increasing maintenance costs. 

In early November, the Group completed the acquisition of Fowler (UK), a leading distributor and lessor of laundry and catering equipment. The Group expects the distribution of the Group laundry equipment range, branded Kiswash, to be facilitated by using Fowler, which also has an established network of service engineers. Fowler also has good expansion opportunities in the wider laundry business under Photo-Me's ownership.

ASIA & R.O.W.

Asia and R.O.W contributed 20% (2014: 20%) of Group revenue and 14% (2014: 14%) of operating profit.

Revenues in Asia and R.O.W increased by 4.1% (at CC) over the period. The largest territory by far is Japan where performance was strong in the first half. Revenues were up by 2.8% (at CC) with profits (at CC) over 10% higher. The medium-term outlook for Japan is good with the Government introducing new My Number Cards (with facial photo) for every resident in Japan from 2016 to be used primarily for tax and social security purposes.

Asia is seen as a promising market for the laundry product in the medium-term and the Group is intending to start trials in Japan and China.

Gradual progress continues to be made in China and Korea where turnover rose respectively by 23% and 123%, albeit from a low base.

STATEMENT OF FINANCIAL POSITION

Shareholders' equity as at 31 October 2015 totaled £102.2 million (30 April 2015: £103.5 million), equivalent to 27.3 pence (30 April 2015: 27.7 pence) per share.

The Group's net financial position continued to improve, reporting a net cash balance of £67.8 million at the end of the period (30 April 2015: £60.7million).

RISKS AND UNCERTAINTIES

Like all businesses, the Group faces risks and uncertainties that could impact on the Group's strategy. The Board recognizes that the nature and scope of these risks can change and regularly reviews the risks faced by the Group and the systems and processes to mitigate such risks.

The principal risks and uncertainties which may affect the continuing business activities of the Group were listed in the Strategic Report within the Annual Report for the year ended 30 April 2015, in the section headed 'Principal risks' on pages 18 and 19 (together with their impact and actions taken to mitigate them).

These risks, which remain relevant to the remaining six months of the present financial year, plus a new 'technological' risk, can be summarised as follows.

Economic	State of Global economy and economic growth impacting consumer spending Foreign exchange volatility impacting the translation of the results and financial position of overseas operations
Regulations	Change in Government regulations for ID photographs
Strategic	Failure to identify new business areas
Market	Deterioration / loss of commercial relationships with site owners
Operational	Reliance on foreign suppliers and on one single supplier for photobooth paper. Loss of reputation for quality of service and product, Failure to protect the Group brand.
Technological	Failure to keep up with advances in technology

In preparing this interim report for the six months ended 31 October 2015, the Board has reviewed these risks and uncertainties and added the category of 'Technological' as above. The Group mitigates this risk by continual focus on R&D. Apart from this addition, the Board considers that there have been no changes since the publication of the 2015 Annual Report.

Serge Crasnianski

Chief Executive Officer

GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 31 October 2015

		Unaudited	Unaudited	Audited
		6 months to	6 months to	Year to
		31 October 2015	31 October 2014	30 April 2015
	Notes	£ '000	£ '000	£ '000
Revenue	3	92,762	96,360	177,202
Cost of Sales		(61,763)	(65,725)	(129,638)
Gross Profit		30,999	30,635	47,564
Other Operating Income		624	811	1,166
Administrative Expenses		(6,280)	(2,781)	(10,524)
Share of Post-Tax Profits from Associates		92	92	164
Operating Profit	3	25,435	28,757	38,370
Analysed as:
Operating profit before special items		25,435	25,273	34,886
Profit on sale of land		-	3,484	3,484
Operating profit after special items		25,435	28,757	38,370
Finance Revenue		453	73	191
Finance Cost		(68)	(37)	(65)
Profit before Tax	3	25,820	28,793	38,496
Total Tax Charge	4	(6,986)	(8,211)	(10,452)
Profit for Year		18,834	20,582	28,044
Other Comprehensive Income
Items that are or may subsequently be classified to Profit and Loss:
Exchange Differences Arising on Translation of Foreign Operations		(2,450)	(3,276)	(6,779)
Total Items that are or may subsequently be classified to profit and loss		(2,450)	(3,276)	(6,779)
Items that will not be classified to profit and loss:
Remeasurement (losses)/gains in defined benefit obligations and other post-employment benefit obligations		-	-	(860)
Deferred tax on remeasurement  (losses)/gains		-	-	221
Total Items that will not be classified to Profit and Loss		-	-	(639)
Other Comprehensive Expense (Net of Tax)		(2,450)	(3,276)	(7,418)
Total Comprehensive Income for the Year		16,384	17,306	20,626
Profit for the Year Attributable to:
Owners of the Parent		18,768	20,507	27,900
Non-controlling interests		66	75	144
		18,834	20,582	28,044
Total comprehensive income attributable to:
Owners of the Parent		16,336	17,284	20,605
Non-controlling interests		48	22	21
		16,384	17,306	20,626

GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME (continued)

for the six months ended 31 October 2015

		Unaudited	Unaudited	Audited
		6 months to	6 months to	Year to
	Notes	31 October 2015	31 October 2014	30 April 2015
Earnings per Share
Basic Earnings per Share	6	5.03p	5.51p	7.49p
Diluted Earnings per Share	6	4.98p	5.46p	7.43p

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

GROUP CONDENSED STATEMENT OF FINANCIAL POSITION

as at 31 October 2015

		Unaudited	Unaudited	Audited
		31 October	31 October	30 April
		2015	2014	2015
	Notes	£'000	£'000	£'000
Assets
Non-current assets
Goodwill	7	11,686	9,811	10,180
Other intangible assets	7	7,221	5,322	6,507
Property,plant & equipment	7	50,150	47,761	48,263
Investment property	7	450	492	458
Investment in - associates		1,471	728	848
Other financial assets - held to maturity		2,160	2,249	2,220
Other financial assets - available for sale		69	75	70
Deferred tax assets		2,991	2,751	3,512
Trade and other receivables		1,624	1,779	1,684
		77,822	70,968	73,742
Current assets
Inventories		13,788	11,425	12,099
Trade and other receivables		11,607	14,179	10,874
Other financial assets - available for sale		-	83	-
Current tax		287	4	869
Cash and cash equivalents	8	66,446	62,542	58,632
		92,128	88,233	82,474
Total assets		169,950	159,201	156,216
Equity
Share capital		1,870	1,861	1,866
Share premium		7,406	6,739	7,131
Translation and other reserves		2,334	8,179	4,766
Retained earnings		90,594	82,648	89,744
Equity attributable to owners of the Parent		102,204	99,427	103,507
Non-controlling interests		952	1,141	904
Total equity		103,156	100,568	104,411
Liabilities
Non-current liabilities
Financial liabilities	8	4,437	60	124
Post-employment benefit obligations		4,182	3,282	4,291
Provisions		10	14	17
Deferred tax liabilities		834	339	1,067
Trade and other payables		1,773	2,948	2,050
		11,236	6,643	7,549
Current liabilities
Financial liabilities	8	827	122	59
Provisions		4,024	4,767	5,540
Current tax		6,853	8,412	5,981
Trade and other payables		43,854	38,689	32,676
		55,558	51,990	44,256
Total equity and liabilities		169,950	159,201	156,216

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 2015

		Unaudited	Unaudited	Audited
		6 months to	6 months to	Year to
		31 October	31 October	30 April
		2015	2014	2015
	Notes	£'000	£'000	£'000
Cash flow from operating activities
Profit before tax		25,820	28,793	38,496
Finance cost		68	37	65
Finance revenue		(453)	(73)	(191)
Operating profit		25,435	28,757	38,370
Share of post tax profit from associates		(92)	(92)	(164)
Amortisation of intangible assets		651	1,147	2,092
Depreciation of property, plant and  equipment		7,330	7,339	14,789
Profit on sale of property, plant and equipment		(138)	(3,519)	(3,510)
Exchange differences		(425)	(560)	(1,996)
Other items		(722)	3	(876)
Changes in working capital:
Inventories		(1,652)	(643)	(1,910)
Trade and other receivables		(5)	(344)	2,587
Trade and other payables		(575)	(1,222)	451
Provisions		(1,418)	(3,094)	(671)
Cash generated from operations		28,389	27,772	49,162
Interest paid		(68)	(37)	(64)
Taxation paid		(5,174)	(4,537)	(9,124)
Net cash generated from operating activities		23,147	23,198	39,974
Cash flows from investing activities
Acquisition of subsidairies net of cash acquired		-	(238)	(422)
Investment in associates		(563)	-	(146)
Investment in  intangible assets		(1,546)	(903)	(3,641)
Proceeds from sale of intangible assets		103	6	1
Purchase of property,plant and equipment		(9,846)	(9,568)	(19,833)
Proceeds from sale of property, plant and equipment		482	4,622	5,623
Proceeds of sale of subsidairies net of cash sold		-	-	32
Interest received		452	73	189
Dividends received from  associates		-	-	96
Net cash generated from investing activities		(10,918)	(6,008)	(18,101)

GROUP CONDENSED STATEMENT OF CASH FLOWS (continued)

for the six months ended 31 October 2015

		Unaudited	Unaudited	Audited
		6 months to	6 months to	Year to
		31 October	31 October	30 April
		2015	2014	2015
	Notes	£'000	£'000	£'000
Cash flows from financing activities
Issue of Ordinary shares to equity shareholders		279	220	617
Repayment of capital element of finance leases		(41)	(39)	(78)
Borrowings		5,007	-	-
Repayment of borrowings		(172)	(101)	(158)
Decrease in assets held to maturity		15	26	76
Dividends paid to owners of the Parent		(8,734)	(14,124)	(21,381)
Dividends paid to non-controlling interests		-	-	(158)
Net cash utilised in financing activities		(3,646)	(14,018)	(21,082)
Net increase in cash and cash equivalents		8,583	3,172	791
Cash and cash equivalents at beginning of year		58,632	60,996	60,996
Exchange loss on cash and cash equivalents		(769)	(1,626)	(3,155)
Cash and cash equivalents at end of year	8	66,446	62,542	58,632

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 2015

	Share capital £'000	Share premium £'000	Other reserves £'000	Translation reserve £'000	Retained earnings £'000	Attributable to owners of the Parent £'000	Non-controlling interests £'000	Total £'000
At 1 May 2014	1,859	6,521	1,874	9,528	83,332	103,114	1,119	104,233
Profit for year	-	-	-	-	20,507	20,507	75	20,582
Other comprehensive (expense)/income
Exchange differences	-	-	-	(3,223)	-	(3,223)	(53)	(3,276)
Total other comprehensive (expense)/income	-	-	-	(3,223)	-	(3,223)	(53)	(3,276)
Total comprehensive (expense)/income	-	-	-	(3,223)	20,507	17,284	22	17,306
Transactions with owners of the Parent
Shares issued in the period	2	218	-	-	-	220	-	220
Share options	-	-	-	-	190	190	-	190
Dividends	-	-	-	-	(21,381)	(21,381)	-	(21,381)
Total transactions with the Parent	2	218	-	-	(21,191)	(20,971)	-	(20,971)
At 31 October 2014	1,861	6,739	1,874	6,305	82,648	99,427	1,141	100,568
At 1 May 2014	1,859	6,521	1,874	9,528	83,332	103,114	1,119	104,233
Profit for year	-	-	-	-	27,900	27,900	144	28,044
Other comprehensive (expense)/income
Exchange differences	-	-	-	(6,656)	-	(6,656)	(123)	(6,779)
Translation reserve taken to income statement on disposal of subsidiaries	-	-	-	20	(20)	-	-	-
Remeasurement gains in defined benefit pension scheme and other post-employment benefit obligations	-	-	-	-	(860)	(860)	-	(860)
Deferred tax on remeasurement gains	-	-	-	-	221	221	-	221
Total other comprehensive (expense)/income	-	-	-	(6,636)	(659)	(7,295)	(123)	(7,418)
Total comprehensive (expense)/income	-	-	-	(6,636)	27,241	20,605	21	20,626
Transactions with owners of the Parent
Shares issued in the period	7	610	-	-	-	617	-	617
Share options	-	-	-	-	371	371	-	371
Deferred tax on share options	-	-	-	-	181	181	-	181
Dividends	-	-	-	-	(21,381)	(21,381)	(158)	(21,539)
Disposal of minority	-	-	-	-	-	-	(78)	(78)
Total transactions with the Parent	7	610	-	-	(20,829)	(20,212)	(236)	(20,448)
At 30 April 2015	1,866	7,131	1,874	2,892	89,744	103,507	904	104,411

GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY

for the six months ended 31 October 2015 continued

	Share capital £'000	Share premium £'000	Other reserves £'000	Translation reserve £'000	Retained earnings £'000	Attributable to owners of the Parent £'000	Non-controlling interests £'000	Total £'000
At 1 May 2015	1,866	7,131	1,874	2,892	89,744	103,507	904	104,411
Profit for year	-	-	-	-	18,768	18,768	66	18,834
Other comprehensive (expense)/income
Exchange differences	-	-	-	(2,432)	-	(2,432)	(18)	(2,450)
Total other comprehensive (expense)/income	-	-	-	(2,432)	-	(2,432)	(18)	(2,450)
Total comprehensive (expense)/income	-	-	-	(2,432)	18,768	16,336	48	16,384
Transactions with owners of the Parent
Shares issued in the period	4	275	-	-	-	279	-	279
Share options	-	-	-	-	203	203	-	203
Deferred tax on share options	-	-	-	-	97	97	-	97
Dividends	-	-	-	-	(18,218)	(18,218)	-	(18,218)
Total transactions with the Parent	4	275	-	-	(17,918)	(17,639)	-	(17,639)
At 31 October  2015	1,870	7,406	1,874	460	90,594	102,204	952	103,156

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

1 Corporate information

The condensed consolidated interim financial statements of Photo-Me International plc (the "Company") for the six months ended 31 October 2015 ("the Interim Report") were approved and authorised for issue by the Board of Directors on 9 December 2015. 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 Church Road, Bookham, Surrey KT23 3EU.

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

The condensed consolidated interim financial statements for the six months ended 31 October 2015 have been prepared in accordance with IAS 34 Interim Financial Reporting and International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and in accordance with the Disclosure and Transparency Rules of the UK Financial Conduct Authority. The condensed consolidated interim financial statements comprise the unaudited financial information for the six months ended 31 October 2015 and 30 April 2014, together with the audited results to 30 April 2015. 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 2015. The condensed financial statements do not constitute statutory accounts within the meaning of section 434 of the UK Companies Act 2006.

The consolidated financial statements of the Group as at and for the year ended 30 April 2015 are available at www.photo-me.com or upon request from the Company's registered office at Church Road, Bookham, Surrey KT23 3EU.

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 2015 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 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 2015, except as indicated below.

Presentation of specific items

The Group's income statement and segmental analysis show operating profit before and after specific items. The presentation and use of specific items is a non-GAAP measure and the use of this measure may not be comparable to similarly titled measures used by other companies. Specific items are those that in management's judgement need to be disclosed separately by virtue of their size, nature or incidence. Management determines whether an item is specific and warrants separate disclosure by considering both qualitative and quantitative factors, such as the frequency or predictability of occurrence. This is consistent with the way operating performance is presented and reported to management.

The directors believe that the presentation of the Group's results in this way is relevant to an understanding of the Group's performance, as specific items are identified by their size, nature and or incidence.

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 2015 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 2015 Annual Report. The effect of adopting new standards for the 2016 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 2015.

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.

The presentation of specific items, as described above is also a non-GAAP measure.

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 2015 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 2015.

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 stronger for the Group in terms of profits, and this is expected to be the case again for the current year ending 30 April 2016.

	Asia	Europe	United Kingdom & Ireland	Total
	£'000	£'000	£'000	£'000
6 months to 31 October 2015
Total revenue	18,282	54,872	23,032	96,186
Inter segment sales	(42)	(3,261)	(121)	(3,424)
Revenue from external customers	18,240	51,611	22,911	92,762
EBITDA	4,894	22,304	7,184	34,382
Depreciation and amortisation	(1,482)	(4,704)	(1,734)	(7,920)
Operating profit excluding associates	3,412	17,600	5,450	26,462
Share of post-tax profits from associates				92
Corporate costs excluding depreciation and amortisation				(1,058)
Corporate depreciation and amortisation				(61)
Operating profit				25,435
Finance Revenue				453
Finance costs				(68)
Profit before tax				25,820
Tax				(6,986)
Profit for period				18,834
Capital expenditure	1,867	6,102	2,371	10,340
Corporate capital expenditure				1,163
Total capital expenditure				11,503
Reconciliation of operating profit
	Asia	Europe	United Kingdom & Ireland	Total
	£'000	£'000	£'000	£'000
Operating profit before associates	3,412	17,600	5,450	26,462
Share of past tax profits from associates	92	-	-	92
Corporate operating profit	-	365	(1,484)	(1,119)
Total operating profit	3,504	17,965	3,966	25,435

	Asia	Europe	United Kingdom & Ireland	Total
	£'000	£'000	£'000	£'000
6 months to 31 October 2014
Total revenue	19,139	56,117	23,752	99,008
Inter segment sales	(278)	(2,256)	(114)	(2,648)
Revenue from external customers	18,861	53,861	23,638	96,360
EBITDA	5,113	23,540	6,686	35,339
Depreciation and amortisation	(1,727)	(5,094)	(1,615)	(8,436)
Operating profit excluding associates	3,386	18,446	5,071	26,903
Share of post-tax profits from associates				92
Corporate costs excluding depreciation and amortisation				1,812
Corporate depreciation and amortisation				(50)
Operating profit				28,757
Finance Revenue				73
Finance costs				(37)
Profit before tax				28,793
Tax				(8,211)
Profit for period				20,582
Capital expenditure	1,723	6,829	1,898	10,450
Corporate capital expenditure				52
Total capital expenditure				10,502
Reconciliation of operating profit
	Asia	Europe	United Kingdom & Ireland	Total
	£'000	£'000	£'000	£'000
Operating profit before associates	3,386	18,446	5,071	26,903
Share of past tax profits from associates	92	-	-	92
Corporate operating profit	-	413	1,349	1,762
Total operating profit	3,478	18,859	6,420	28,757

	Asia	Europe	United Kingdom & Ireland	Total
	£'000	£'000	£'000	£'000
Year ended 30 April 2015
Total revenue	38,925	100,127	44,867	183,919
Inter segment sales	(720)	(5,782)	(215)	(6,717)
Revenue from external customers	38,205	94,345	44,652	177,202
EBITDA	10,232	32,013	11,810	54,055
Depreciation and amortisation	(3,465)	(9,967)	(3,359)	(16,791)
Operating profit excluding associates	6,767	22,046	8,451	37,264
Share of post-tax profits from associates				164
Corporate costs excluding depreciation and amortisation				1,032
Corporate depreciation and amortisation				(90)
Operating profit				38,370
Finance Revenue				191
Finance costs				(65)
Profit before tax				38,496
Tax				(10,452)
Profit for year				28,044
Capital expenditure	3,895	14,193	3,799	21,887
Corporate capital expenditure				1,729
Total capital expenditure				23,616
Reconciliation of operating profit
	Asia	Europe	United Kingdom & Ireland	Total
	£'000	£'000	£'000	£'000
Operating profit before associates	6,768	22,045	8,453	37,266
Share of post tax profits from associates	164	-	-	164
Corporate operating profit	-	1,012	(72)	940
Total operating profit	6,932	23,057	8,381	38,370

Included in Corporate profit for the six months to 31 October 2014 and the year ended 30 April 2015 is £3,484,000 profit on sale of vacant land at Bookham.

4 Taxation

		6 months to 31 October	6 months to 31 October	Year to                30 April
		2015	2014	2015
		£'000	£'000	£'000
Profit before tax		25,820	28,793	38,496
Total taxation charge		6,986	8,211	10,452
Effective tax rate		27.10%	28.50%	27.20%

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 2016. The full year effective tax rate includes the impact to the Group Income Statement of calculating UK deferred tax balances at the reduced UK tax rate of 19%.

The Chancellor announced  in the 2015 July budget, a reduction on the rate of UK Corporation tax from 20% to 19% for the year ended 31 March 2018 and 18% for the year ended 31 March 2021. This was substantially enacted at the balance sheet date 31 October 2015.

5 Dividends

Dividends paid and proposed
	31 October 2015		31 October 2014		30 April 2015
	pence   per share	£'000	pence   per share	£'000	pence   per share	£'000
Interim
2014 paid on 6 May 2014			1.80	6,690	1.80	6,690
2015 paid on 14 May 2015	2.34	8,734
Final
2014 paid 7 November 2014					1.95	7,257
Special
paid on 15 May 2014			2.00	7,434	2.00	7,434
	2.34	8,734	3.80	14,124	5.75	21,381

Year ending 30 April 2016

The Board has declared an interim dividend of 2.575p per share for the year ending 30 April 2016, to be paid on 12 May 2016 to shareholders on the register at 8 April 2016.The ex-dividend date is 7 April 2016. These consolidated financial statements do not reflect this proposed dividend.

Six months to 31 October 2015

The final dividend for 2015 of 2.54p per share amounting to £9,484,000 was approved by the shareholders at the Annual General Meeting on 21 October 2015. 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 12 November 2015.

Six months to 31 October 2014

The final dividend for 2014 of 1.95p per share amounting to £7,257,000 was approved by the shareholders at the Annual General Meeting on 23 October 2014. 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 7 November 2014.

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 October	to 31 October	to 30 April
	2015	2014	2015
Basic earnings per share	5.03p	5.51p	7.49p
Diluted earnings per share	4.98p	5.46p	7.43p
Earnings available to shareholders (£'000)	18,768	20,507	27,900
Weighted average number of shares in issue in the period
- basic ('000)	373,338	371,981	372,381
- including dilutive share options ('000)	376,981	375,572	375,695

Alternative earnings per share

Management assess the performance of the Group using a variety of performance measures. Internally management discuss the Group's performance on an "adjusted basis", that is to say taking into accounts "specific items". The Group's income statement and segmental analysis show operating profit before and after specific items. The presentation and use of specific items are a non-GAAP measure and the use of this measure may not be comparable to similarly titled measures used by other companies. Specific items are those that in management's judgement need to be disclosed separately by virtue of their size, nature and or incidence. Management determines whether an item is specific and warrants separate disclosure by considering both qualitative and quantitative factors, such as the frequency or predictability of occurrence. This is consistent with the way operating performance is presented and reported to management.

The directors believe that the presentation of the Group's results in this way is relevant to an understanding of the Group's performance, as specific items are identified by their size, nature or incidence.

The impact of specific items on operating profit is detailed in note 3 , segment analysis.

Consistent with the above, management also calculate earnings per share (EPS) and diluted earnings per share (DPS).  Management uses this as one factor in determining dividend policy.

The tables below reconcile EPS and DPS before and after specific items. There were no specific items in the six months ended 31 October 2015; specific items for the six months to 31 October 2014 and the year ended 30 April 2015 relate to the sale of vacant land at the Bookham head office site.

Alternative earnings per share
	£'000	EPS	DPS
October 2015
Earnings available to shareholders (£'000)	18,768	5.03p	4.98p
Specific items net of tax	-	-	-
Earnings after specific items	18,768	5.03p	4.98p
Weighted average number of shares in issue in the period
- basic ('000)	373,338
- including dilutive share options ('000)	376,981
October 2014
Earnings available to shareholders (£'000)	20,507	5.51p	5.46p
Specific items net of tax	(2,752)	(0.74p)	(0.73p)
Earnings after specific items	17,755	4.77p	4.73p
Weighted average number of shares in issue in the period
- basic ('000)	371,981
- including dilutive share options ('000)	375,572
April 2015
Earnings available to shareholders (£'000)	27,900	7.49p	7.43p
Specific items net of tax	(2,752)	(0.74p)	(0.73p)
Earnings after specific items	25,148	6.75p	6.70p
Weighted average number of shares in issue in the period
- basic ('000)	372,381
- including dilutive share options ('000)	375,695

7 Non-current assets - intangibles, property, plant and equipment and investment property

	Goodwill	Other Intangible assets	Property, plant & equipment	Investment property
	£'000	£'000	£'000	£'000
Net book value at 1 May 2014	9,911	5,776	46,529	516
Exchange adjustment	(100)	(204)	(1,339)	(24)
Additions
- photobooths & vending machines	-	-	8,847	-
- research & development	-	550	-	-
- other additions	-	353	752	-
New subsidiaries -net book value	-	-	709	-
Depreciation provided in the period	-	(1,147)	(7,339)	-
Net book value of disposals	-	(6)	(398)	-
Net book value at 31 October 2014	9,811	5,322	47,761	492
Net book value at 1 May 2014	9,911	5,776	46,529	516
Exchange adjustment	(244)	(457)	(2,637)	(58)
Additions
- photobooths & vending machines	-	-	18,287	-
- research & development	-	2,560	-	-
- other additions	513	1,081	1,688	-
New subsidiaries- net book value	-	-	233	-
Depreciation provided in the period	-	(2,092)	(14,789)	-
Net book value of disposals	-	(361)	(1,048)	-
Net book value at 30 April 2015	10,180	6,507	48,263	458
Net book value at 1 May 2015	10,180	6,507	48,263	458
Exchange adjustment	(65)	(102)	(740)	(8)
Additions
- photobooths & vending machines	-	-	9,059	-
- research & development	-	1,358	-	-
- other additions	1,571	188	898	-
New subsidiaries- net book value	-	4	428	-
Transfers	-	20	(20)	-
Depreciation provided in the period	-	(651)	(7,330)	-
Net book value of disposals	-	(103)	(408)	-
Net book value at 31 October 2015	11,686	7,221	50,150	450

Included in additions for property, plant & equipment are the following amounts under finance leases.

	31 October 2014	30 April 2015	31 October 2015
	£'000	£'000	£'000
Property, plant & equipment additions - finance leases	31	142	111

8 Net Cash

		31 October	31 October	30 April
		2015	2014	2015
		£'000	£'000	£'000
Cash and cash equivalents per statement of financial position		66,446	62,542	58,632
Financial assets -   held to maturity		2,160	2,249	2,220
Financial assets -  available-for-sale		-	83	-
Current instalments due on bank loans		(716)	(68)	-
Current finance leases		(111)	(54)	(59)
Net cash		67,779	64,752	60,793

At 31 October 2015, £2,160,000 (31 October 2014: £2,249,000, 30 April 2015: £2,220,000) 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 in the table above excludes non-current financial liabilities of 31 October 2015 £4,437,000,  (loans £4,220,000 and finance leases of £217,000), 31 October 2014 finance leases £60,000 and 30 April 2015 finance leases £124,000.

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 short term loans and other short term 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 finance leases relate to new finance leases taken out in the period and for the period ended 31 October 2015 also include cash at bank, loans and leases acquired with acquisition made during the period, as shown in note 11.

	1  May 2014	Exchange difference	Other movements	Cash flow	31 October 2014
	£'000	£'000	£'000	£'000	£'000
Cash and cash equivalents per statement of financial position	60,996	(1,626)	-	3,172	62,542
Financial assets - held to maturity	2,334	(57)	-	(28)	2,249
Financial assets - held for sale	85	(4)	-	2	83
Loans due within one year	(177)	8	-	101	(68)
Leases due within one year	(63)	3	(23)	29	(54)
Net cash	63,175	(1,676)	(23)	3,276	64,752
	1  May 2014	Exchange difference	Other movements	Cash flow	30 April  2015
	£'000	£'000	£'000	£'000	£'000
Cash and cash equivalents per statement of financial position	60,996	(3,155)	-	791	58,632
Financial assets - held to maturity	2,334	(69)	-	(45)	2,220
Financial assets - held for sale	85	(9)	(31)	(45)	-
Loans due within one year	(177)	19	-	158	-
Leases due within one year	(63)	4	(59)	59	(59)
Net cash	63,175	(3,210)	(90)	918	60,793
	1  May 2015	Exchange difference	Other movements	Cash flow	31 October 2015
	£'000	£'000	£'000	£'000	£'000
Cash and cash equivalents per statement of financial position	58,632	(769)	-	8,583	66,446
Financial assets - held to maturity	2,220	(45)	-	(15)	2,160
Financial assets - held for sale	-	-	-	-	-
Loans due within one year	-	-	(24)	(692)	(716)
Leases due within one year	(59)	1	(82)	29	(111)
Net cash	60,793	(813)	(106)	7,905	67,779

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.

Financial Instruments by category

The tables below show financial instruments by category

31 October 2015	Loans and receivables	Available for sale	Total
	£'000	£'000	£'000
Assets as per statement of financial position
Other financial assets - held to maturity	2,160	-	2,160
Other financial assets - available for sale	-	69	69
Trade and other receivables	9,616	-	9,616
Cash and cash equivalents	66,446	-	66,446
Total	78,222	69	78,291
	Other financial liabilities at amortised cost		Total
	£'000		£'000
Liabilities as per statement of financial position
Borrowings	4,936		4,936
Leases	328		328
Trade and other payables excluding  non-financial liabilities	31,077		31,077
Total	36,341		36,341

31 October 2014	Loans and receivables	Available for sale	Total
	£'000	£'000	£'000
Assets as per statement of financial position
Other financial assets - held to maturity	2,249	-	2,249
Other financial assets - available for sale	-	75	75
Trade and other receivables	12,876	-	12,876
Cash and cash equivalents	62,542	-	62,542
Total	77,667	75	77,742
	Other financial liabilities at amortised cost		Total
	£'000		£'000
Liabilities as per statement of financial position
Borrowings	68		68
Leases	114		114
Trade and other payables excluding  non-financial liabilities	29,720		29,720
Total	29,902		29,902

30 April 2015	Loans and receivables	Available for sale	Total
	£'000	£'000	£'000
Assets as per statement of financial position
Other financial assets - held to maturity	2,220	-	2,220
Other financial assets - available for sale	-	70	70
Trade and other receivables	9,699	-	9,699
Cash and cash equivalents	58,632	-	58,632
Total	70,551	70	70,621
	Other financial liabilities at amortised cost		Total
	£'000		£'000
Liabilities as per statement of financial position
Borrowings	-		-
Leases	183		183
Trade and other payables excluding  non-financial liabilities	30,126		30,126
Total	30,309		30,309

Included in liabilities trade and other payables at 31st October 2015 is £400,000 contingent consideration relating to the acquisition of Fowler UK.Com Ltd, note 11

10 Related parties

The Group's significant related parties are disclosed in the 2015 Annual Report and include its associates, its pension funds and the Company's Directors. During the 6 months ended 31 October 2015, 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 2015 Annual Report.

11 Business combinations

The Group completed its acquisition of 100% of the share capital and voting interests in Fowler UK.com Ltd ("Fowler") in early November 2015. Fowler is a UK company which supplies and installs laundry and catering equipment. The acquisition was effective on 1 October 2015 and Fowler was consolidated in the Group's consolidated results and balance sheet from that date. The values shown in the table below are provisional and may be subject to change once the fair value exercise has been completed.

			Provisional fair values
			£'000
Intangible assets			3
PPE			429
Total non current assets			432
Inventory			265
Trade and other receivables			354
Cash  and cash equivalents			209
Total current assets			828
Total assets			1,260
Liabilities
Non current liabilities
Financial liabilities			117
Deferred tax liabilities			55
Total			172
Current liabilities
Financial liabilities			61
Current tax			44
Trade and other payables			301
Total			406
Total identifiable net assets acquired			682
Goodwill			1,571
Goodwill & assets acquired			2,253
Satisfied by
Trade and other payable - accrual for investment			1,853
Trade and other payable  - Contingent consideration			200
			2,053
Non current liabilities
Trade and other payable  - Contingent consideration			200
			2,253

The provisional goodwill arising from the acquisition is expected to increase the Group's presence in the laundry market in the UK and result in economies of scale and cost savings.

On 14 May 2014 the Group acquired 100% of the share capital and voting interests in Copyphot SA a small operating company in Switzerland and during the year ended 30 April 2015, the Group disposed of its 51% interest in Photo-Me Hungary KFT, a small operating company in Hungary. Details of these transactions are shown in note 31 to the Annual Report for the year ended 2015.

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 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 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)

10 December 2015

INDEPENDENT REVIEW REPORT TO PHOTO-ME INTERNATIONAL PLC

Introduction

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 2015 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. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

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 Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA") and 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. 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.

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 IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting 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.

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. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2015 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

Steve Masters

for and on behalf of KPMG LLP
Chartered Accountants 

1 Forest Gate

Brighton Road

Crawley

RH11 9PT

10 December 2015

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 2015. 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.co.uk.

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

Church Road

Bookham

Surrey KT23 3EU

Tel: [phone]

Fax: [phone]

e-mail: [e-mail]

 

END

 

 

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