ME Group International report revenue up 24.7% and profit before tax up 36.7%

ME Group International plc (LON:MEGP), the instant-service equipment group, has announced its results for the six months ended 30 April 2023.

¹   EBITDA is profit before depreciation, amortisation, other net gains and finance cost and income.

²   Refer to note 9 for the reconciliation of net cash to cash and cash equivalents per the financial statements. The comparative figures for net cash, and gross cash, have been restated by £(1) million to reflect a change in accounting policy which reclassified certain restricted deposits from cash to debtors. This ensures comparability with the current period balances.

H1 HIGHLIGHTS

·    Strong financial performance, with revenue up 24.7% and profit before tax up 36.7%, driven by progress across all of the Group’s key business areas – photobooth, laundry and digital printing services – and in all of its 19 operating markets.

·   Photo.ME revenue was up 25.4% to £83.9 million, driven by demand for photo ID and increased activity across all territories, particularly Continental Europe and Asia Pacific.

·    Wash.ME revenue was up 37.0% to £37.8 million which was reflected in the growth of the Group’s laundry estate – a key focus of investment. Revolution laundry units in operation grew 15.8% and represented 11.5% of total group vending estate – the Group installed new machines at a rate of 50-60 per month in the Period.

·      Print.ME revenue up 11.5% at 5.8 million with 183 new kiosks were deployed in France during the Period.

·    Food.ME revenue contribution was 4.5% of Group revenue, up 106.5% to £6.4m (H1 2022: £3.1 million).

OUTLOOK

·     Continued focus on the Group’s five-year growth strategy to support the development of each principal business area, including M&A activity where the Group has an active pipeline of opportunities, to drive sustainable revenue and profit performance.  

·      Rollout of next-generation multi-service photobooths is underway and the Group is focused on deploying these across its key territories. The Group aims to install between 1,000 and 1,500 machines in France by the end of October 2023.  

·    Sustained pace of rollout for Revolution laundry units at between 50-60 per month, as the Group continues to expand its laundry machine estate and deploy new laundry formats, including compact and energy-saving models.  

·    Continued focus on developing Feed.ME business area to accelerate deployment of the Group’s new pizza vending machine in France as well as the extension of fresh fruit juice vending equipment presence in Japan.  

·     Return to the FTSE 250 index post-period end was a momentous milestone for the Company, supported by the delivery of its diversification growth strategy.

·      As previously reported, the Group has continued to see positive trading momentum across its operations. Consequently, the Board expects that results for FY 2023 will be in line with recently revised market expectations^*, subject to any changes to the broader macroeconomic environment.

*Current market expectations are revenue between £300 million and £320 million, EBITDA between £100 million and £110 million and profit before tax between £64 million and £67 million

Serge Crasnianski, ME Group International CEO & Deputy Chairman, commented:

“The Group has achieved an extremely strong first-half performance across its key business areas and in all of its 19 operating markets, which delivered significant growth in revenue, EBITDA and profit before tax in the Period. As a result, the Board increased its outlook for the current financial year FY 2023 in early June. 

“ME Group is a high-potential business that continues to offer growth opportunities in existing and new geographic markets. We have a dominant market position in most of the markets in which we operate and our long-term customer contracts provide us with good predictability and visibility on revenue streams.  Our operations are highly cash-generative and these cash flows are used to fund growth through product innovation and expansion, and allow us to deliver value to shareholders through growth and dividends.  Reflecting our solid business model and continued strategic progress, ME Group has re-entered the FTSE 250 Index.

“Looking ahead, the Board remains confident in the Group’s growth strategy and strong financial position which provides us with a platform to fund future growth opportunities.”

ME Group International plc (LSE: MEGP) operates, sells and services a wide range of instant-service vending equipment, primarily aimed at the consumer market.

The Group operates vending units across 19 countries and its technological innovation is focused on four principal areas:

·      Photo.ME    – Photobooths and integrated biometric identification solutions

·      Wash.ME     – Unattended laundry services and launderettes

·      Print.ME      – High-quality digital printing kiosks

·      Feed.ME     – Vending equipment for the food service market

In addition, the Group operates other vending equipment such as children’s rides, amusement machines, and business service equipment.

Whilst the Group both sells and services this equipment, the majority of units are owned, operated and maintained by the Group. The Group pays the site owner a commission based on turnover, which varies depending on the country, location and the type of machine.

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), transport hubs, and administration buildings (City Halls, Police etc.). Equipment is maintained and serviced by an established network of more than 650 field engineers.

In August 2022 the Company changed its listed entity name to ME Group International plc (previously Photo-Me International plc) to better reflect the Group’s diversification focus and business strategy.

The Company’s shares have been listed on the London Stock Exchange since 1962.