Photo Me makes Snappy Profits


Aside from the obvious, how many know that Photo Me International are also making money from its plethora of strategically installed launderette facilities that service the camping fraternity in sizeable numbers across mainland Europe?

To put some scale on Photo Me International’s launderette operations, company reports issued on 26 February 2015 indicated that 898 units had already been installed and in order to meet demand a secondary manufacturing line was required to help meet expectations of installing their 1000th Revolution laundry unit, which became fact on 24 March 2015.

Photo Me has ambitious plans to double its launderette installations by end of 2015; given how quickly they attained the last 102 units en route to 1000, targets seem realistic.

In keeping with its diversification strategy into cleaning, Photo Me is also trialling a car wash facility in 5 sites across France and has already gained interest from supermarkets should tests prove successful.

Photo Me is making money; Pre-tax profits for 6 months to 31 October 2014 were up to £28.6m from £23m, allowing a 30% increase in interim dividend to 2.34p per share. Quarter 3 results to 31 January 2015 also showed continued increase in pre-tax profits up 12%.

Results expected in July will show what effect the launderette operations will have had to yearly figures.

Historically, buying Photo Me International shares in May has proved profitable in all years since 2008, with average returns greater than 49% (if exact timing of toughs and peaks are captured between May and December in each of the years).

Technically, shares ran up to their 2004 peak of circa £1.40 in November 2013 where they have consolidated into a trading range of approximately £1.25 to £1.50 ever since which should provide a reasonable floor under the shares.

Should history be repeated this year then shares will be breaking out to the upside of this trading range which is usually a precursor to a greater move in the direction of the breakout.

Fundamentally, historically and technically these shares look and feel as though a jump upwards is possible but watch for a break below £1.20 as this could herald a break downwards.

Date Company Status Mid Price Target 1 Target 2 Target 3 Target 4
25/05/2015 Photo Me International Initial write up £1.395 £1.54 £1.86 £2.07 £2.27

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