The group was also hit by the costs of last year's takeover of KIS, the private French company trail-blazing the new PhotoVision booths.
David Miller, managing director of Photo-Me, the world's biggest maker and operator of coin-operated photo booths, said he expected a strong rebound in the second half.
Mr Miller said production delays in France meant only 250 PhotoVision booths were installed against a projected 450, but that a further 500 would be added by the year-end.
Photo-Me would increasingly replace its traditional booths with the less costly PhotoVision, which offered a variety of picture styles.
In the six months to October 1994 Photo-Me saw taxable profits fall to £10 million (£10.4m). The interim dividend is held at 1.50p.
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