ME Group International plc (LON:MEGP), the instant-service equipment group, announces its results for the six months ended 30 April 2024.
KEY FINANCIALS
| Six months ended 30 April 2024 | Six months ended 30 April 2023 | Change | Change excluding FX impact3 | |
| Revenue | £150.4m | £143.8m | +4.6% | +8.6% |
| EBITDA1 | £51.2m | £46.1m | +11.1% | +14.8% |
| Profit before tax | £30.0m | £27.2m | +10.3% | +13.6% |
| Profit after tax | £22.6m | £20.4m | +10.8% | +15.7% |
| Cash generated from operations | £41.7m | £36.8m | +13.3% | +19.0% |
| Gross cash | £82.7m | £113.1m | -26.9% | -24.2% |
| Net cash2 | £21.7m | £24.4m | -11.1% | -8.2% |
| Earnings per share (diluted) | 5.97p | 5.34p | +11.9% | +16.7% |
| Dividends: | ||||
| – Interim Dividend per ordinary share | 3.45p | 2.97p | +16.2% | n/a |
1 EBITDA is profit before depreciation, amortisation, non-operating income/expense and finance cost and income.
2 Net cash excludes investments in convertible bonds (£3.7 million) and lease liabilities (£10.6 million). In November 2023, £1.0 million of the convertible bonds were converted to equity (see note 10 for details). Refer to note 12 for the reconciliation of net cash to cash and cash equivalents per the financial statements
3. Percentage change excluding the Impact from foreign exchange rates (“FX impact”) 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).
H1 HIGHLIGHTS
· Reported revenue up 4.6% to £150.4 million, EBITDA1 up 11.1% to £51.2 million and profit before tax up 10.3% to £30.0 million, driven by growth in core laundry and photobooth operations, despite foreign currency rate impacts. Revenue was up 8.6% excluding the impact of foreign currency rate changes.
· Strong performance from Wash.ME laundry operations, which is the fastest-growing business area and a key growth driver for the Group, with revenue up 16.7% to £44.1 million. Revolution laundry units in operation grew by 18.0% and represented 12.4% of total Group vending estate, driven by strong demand and record machine installations of 420 Revolution machines in H1.
· 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.
· The number of Photo.ME machines increased by 12.6% to 30,708 (H1 2023: 27,275). Photo.ME vending revenue1 was up 2.4% to £85.9 million (up 7.5% excluding FX impact), reflecting quieter volumes in Q1 followed by a strong performance from Q2 to June 2024 with increased activity across almost all territories, particularly Continental Europe and Asia Pacific.
· Highly cash generative, with cash generated from operations up 13.3% to £41.7 million, supporting the Group’s investment in its growth strategy and returns to shareholders.
· The Group has a strong balance sheet, with £82.7 million of gross cash and a net cash balance of £21.7 million at the period end, excluding investments in convertible bonds of £3.7 million.
· Diluted earnings per ordinary share up 11.8% to 5.97 pence, reflecting the continued focus on delivering meaningful profitable growth returns for all shareholders.
· Interim dividend up 16.2% to 3.45 pence per Ordinary Share, which will be paid at the end of November, will return £13.0 million to shareholders. The Group’s policy is to pay annual dividends in excess of 55% of annual profits, subject to market and capital requirements.
OUTLOOK
· ME Group will continue to capitalise on significant market opportunities for photobooth and laundry services.
· Strong Revolution laundry machine installation pipeline, targeting 80-90 per month, and on track to deliver a record number of installations in H2 2024.
· Rollout of next-generation multi-service photobooths with plans to install 2,000 to 2,500 machines by the end of FY 2024.
· H2 2024 has started strongly and the Group continues to see positive trading momentum across its operations. As a result, the Board remains confident that it will deliver another year of record profitability in FY 2024, in line with current market expectations.
1 Vending revenue is revenue earned from machines in operation and excludes revenue from the sale of equipment, consumables, spare parts and services. This has previously been referred to as operating revenue.
Serge Crasnianski, ME Group International CEO & Deputy Chairman, commented:
“We are pleased to report positive trading momentum throughout H1 2024, which has continued into H2 2024, and reflects further strategic progress from the Group’s core automated photobooth and laundry operations which are both exceptionally profitable and highly cash generative. The Group continues to focus on profitability, returns and cash generation, with these metrics being the key performance indicators for the Group. The Group is on track to deliver another record year across these financial metrics, including the number of machines deployed.”
“Through our continued focus on R&D and technological innovation, the Group remains focused on prudently exploring new and exciting opportunities within the automated self-service instant machine category to further diversify our portfolio, including the planned launch of new machines offering a broader range of services for our consumers.
“Additionally, the Group’s R&D team has devised new production techniques to reduce the cost of the next-generation photobooths by 28% (effective immediately) and the Revolution laundry machine by 13% (effective FY 2025). A new generation solar panel, which delivers twice the power generation of the current model, is also in development and will be utilised by the Group’s Revolution machines
“I look forward to updating you on the Group’s progress and I thank our employees and partners for their continued support.”
