French unrest will damage Photo-Me

The recent widespread strikes in France will cut profits this year at Photo-Me International, writes Magnus Grimond.

The photo booth operator said yesterday that the industrial unrest had resulted in a significant reduction in sales at the French subsidiary, jeopardising an expected profits improvement in the second half.

As a result profits for the year to April could be 5 to 10 per cent below last year's figure of pounds 14.5m. The news, which accompanied almost flat interim profits of pounds 10.1m, disappointed the market and Photo-Me's shares slid 8p to 125p yesterday.

However, the managing director, David Miller, remains confident that the foundations have been laid for growth. Capital investment on the new generation of PhotoVision booths was stepped up from pounds 8m to pounds 13.5m in the first half.

The first half profits compared with pounds 10m in the comparable period of 1994. Sales rose 8.4 per cent to pounds 104m. The company blamed an 80 per cent rise in foreign exchange differences to pounds 879,000 and a 13 per cent increase in net interest payable to pounds 1.46m for restraining profits.

The release of tax provisions helped earnings per share rise 3.7 per cent to 8.94p, out of which Photo-Me is paying a maintained interim dividend of 1.5p.