Photo-Me shares gain 16 per cent on Kodak digital minilabs contract

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The Independent Online

Photo-Me International, the beleaguered photo-booth operator, yesterday said long-awaited changes to its board were imminent.

Photo-Me International, the beleaguered photo-booth operator, yesterday said long-awaited changes to its board were imminent.

Serge Crasnianski, Photo-Me's chief executive, signalled that Dan David, the company's 71-year-old chairman who came under pressure to resign last month, is considering stepping down, despite recent assertions to the contrary.

Mr Crasnianski also said he was about to appoint a deputy chairman and new non-executive directors.

The move follows heavy criticism of Photo-Me's board when the company was forced to postpone full-year results after an accounting irregularity which resulted in sharply lower-than-expected profits.

Mr Crasnianski said of Mr David: "He is 71, there will be natural transition." Mr David is expected to go when a deputy has been appointed. "I have a list of candidates for deputy chairman and am interviewing currently," Mr Crasnianski added.

The news came as Photo-Me announced a three-year agreement to supply Kodak with digital photo development minilabs to sell in Asia, excluding Japan. The minilabs will be sold under the name System 88, as eight is a lucky number in the Far East.

Investors reacted positively to the news, driving shares up 16 per cent to 128.5p. The move will be welcome relief for the company, which has seen shares fall by 62 per cent this year.

Mr Crasnianski said: "Asia accounts for 12 per cent of the world market for minilabs and we are currently working on plans to work with Kodak in other regions, including America and Europe."

The deal will allow Photo-Me to expand production dramatically to meet Kodak's demand for several hundred minilabs a year. Under the agreement, Kodak will buy the labs for less than their market value of £80,000 in the UK.

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