Photo-me International (LON:PHTM) is a quirky owner-managed business that I’ve followed for years and come close to buying a few times. The main business line is Photo-Me branded self-service photo machines, but the group also runs self-service laundries, photo printing and food vending operations.

The main reason why I’ve never bought this stock is the obvious risk that in the smartphone era, photo machines must surely become obsolete. That hasn’t happened yet, though.

Indeed, CEO and 36% shareholder Serge Crasnianski appears to be confident that his photo booth empire won’t go out of fashion, at least not before he replaces the profits it provides with other sources of income.

Mr Crasnianski has spent the pandemic buying up Photo-Me shares. His holding has risen from 22.5% at the end of 2019 to 36.5% today.

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When this figure rose above 30% in January, Takeover Panel rules required Crasnianski to make an offer for the whole company. The offer was made at 75p per share, which seemed a little mean to me. Photo-Me shares were trading much higher than this before the pandemic.

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Evidently the offer didn’t appeal to the firm’s shareholders, either. It failed to reach the 50% acceptance threshold required and has now lapsed. Crasnianski remains the dominant shareholder, CEO and deputy chairman.

Shortly after the offer lapsed, Photo-Me published its delayed annual results for the year to 31 October 2021. Funnily enough, these numbers looked quite strong to me.

Stockopedia’s algorithms have since digested these numbers and Photo-Me has appeared in the results of my SIF stock-buying screen. It’s the only one of the top five shown I don’t already hold in SIF (and personally):

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In the remainder of this piece I’ll take a quick look at Photo-Me’s business and recent trading. I’ll then evaluate the stock against my screening criteria to decide whether to add it to SIF this week.

Photo-Me: a return to growth?

In recent years Photo-Me has been seeking to diversify for growth.I think this strategy is now starting to look better defined and more credible than it has in the past.

The group’s operations are structured into four divisions:

  • Photo.ME (56% of EBITDA): Photo booths, often including country-specific biometric ID solutions
  • Wash.ME (35% of EBITDA): Self-service laundrettes -…

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