ME Group International plc (LON: MEGP), the instant-service equipment group, has announced an update on the Group’s trading for the six months ended 30 April 2024 (“H1 2024”).
Trading Update1
Positive trading momentum continued throughout H1 2024 compared with the six months ended 30 April 2023 (“H1 2023”), with Group revenue up 4.6% (up 8.6% excluding FX impact) and profit before tax up 10.3% (up 13.6%, excluding FX impact). The Group remained focused on the continued growth of its core photobooth and laundry operations.
Photobooth activity across all territories performed as expected with Photo.ME revenue up 2.3% (up 7.4% excluding FX impact) compared with H1 2023, driven by global demand for official photo ID. The 3,548 photobooths previously acquired in Japan have now been fully integrated into the Group’s Japanese operations and have started to benefit from network optimisation.
Wash.ME Revolution laundry operations is the fastest growing business area with revenue up 17.4% (19.6% excluding FX impact) compared with H1 2023, as the Group delivered on its rollout of Revolution laundry machines and built on its record performance. The number of Revolution laundry machines in operation grew by 18% compared to H1 2023, with a record 420 Revolution machines installed in H1 2024. The Group continues to expand across its established partnerships in high footfall locations, such as supermarkets and petrol forecourts, and its installation pipeline indicates that it is on track to deploy a record number of Revolution machines during FY 2024.
1 Impact from foreign exchange rates (“FX”) during H1 2024, particularly the Japanese Yen which saw a 15% decrease in value against Pound Sterling (average rate of exchange used in H1 2024 was Yen/£ 187.64 vs H1 2023: 163.16), and a 2.2% decrease in the Euro against Pound Sterling (average rate of exchange used in H1 2024 was €/£ 1.138 vs H1 2023: 1.163).
Financial position
The Group remains in a well-capitalised and strong financial position, with high cash flow generation and long-term customer contracts providing the Group with good predictability and visibility on revenue streams. At 30 April 2024, the Group had a gross cash position of £82.9 million (H1 2023: £113.1 million), and a net cash position of £21.9 million (H1 2023: £24.4 million), excluding investments in convertible bonds of £4.7 million (H1 2023: £4.7 million).
Outlook
Historically, the second half of the financial year is seasonally the strongest for the Group in terms of revenue and profits generated as well as the installation of machines across key locations. As the Group capitalises on the significant market opportunity for laundry and photobooth services, the Board is confident in delivering record profitability for the year, in line with market expectations.
The Group will publish its interim results for the six months ended 30 April 2024 in mid-July 2024.
