REG - ME Group Intl. - Interim Results
15/07/2024 07:15
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RNS Number : 3804W ME Group International PLC 15 July 2024
15 July 2024
ME GROUP INTERNATIONAL PLC
("ME Group", "the Group" or "the Company")
Interim Results for the six months ended 30 April 2024
Further positive financial and strategic progress in H1 and
on track to deliver another year of record performance
ME Group International plc (LSE: MEGP), the instant-service equipment group,
announces its results for the six months ended 30 April 2024 (the "Period" or
"H1 2024").
KEY FINANCIALS
Six months ended Six months ended Change Change excluding FX impact(3)
30 April 2024
30 April 2023
Revenue £150.4m £143.8m +4.6% +8.6%
EBITDA(1) £51.2m £46.1m +11.1% +14.8%
Profit before tax £30.0m £27.2m +10.3% +13.6%
Profit after tax £22.6m £20.4m +10.8% +15.7%
Cash generated from operations £41.7m £36.8m +13.3% +19.0%
Gross cash £82.7m £113.1m -26.9% -24.2%
Net cash(2) £21.7m £24.4m -11.1% -8.2%
Earnings per share (diluted) 5.97p 5.34p +11.9% +16.7%
Dividends:
- Interim Dividend per ordinary share 3.45p 2.97p +16.2% n/a
( )
(1 ) EBITDA is profit before depreciation, amortisation, non-operating
income/expense and finance cost and income.
(2 ) Net cash excludes investments in convertible bonds (£3.7 million) and
lease liabilities (£10.6 million). In November 2023, £1.0 million of the
convertible bonds were converted to equity (see note 10 for details). Refer to
note 12 for the reconciliation of net cash to cash and cash equivalents per
the financial statements
(3). Percentage change excluding the Impact from foreign exchange rates ("FX
impact") during H1 2024, particularly the Japanese yen which saw a 15%
decrease in value against pound sterling (average rate of exchange used in H1
2024 was Yen/£ 187.64 vs H1 2023: 163.16), and a 2.2% decrease in the euro
against pound Sterling (average rate of exchange used in H1 2024 was €/£
1.138 vs H1 2023: 1.163).
H1 HIGHLIGHTS
· Reported revenue up 4.6% to £150.4 million, EBITDA(1) up 11.1%
to £51.2 million and profit before tax up 10.3% to £30.0 million, driven by
growth in core laundry and photobooth operations, despite foreign currency
rate impacts. Revenue was up 8.6% excluding the impact of foreign currency
rate changes.
· Strong performance from Wash.ME laundry operations, which is the
fastest-growing business area and a key growth driver for the Group, with
revenue up 16.7% to £44.1 million. Revolution laundry units in operation
grew by 18.0% and represented 12.4% of total Group vending estate, driven by
strong demand and record machine installations of 420 Revolution machines in
H1.
· The Group continues to expand across its established partnerships in
high footfall locations, such as supermarkets and petrol forecourts, and its
installation pipeline indicates that it is on track to deploy a record number
of Revolution machines during FY 2024.
· The number of Photo.ME machines increased by 12.6% to 30,708 (H1
2023: 27,275). Photo.ME vending revenue(1) was up 2.4% to £85.9 million (up
7.5% excluding FX impact), reflecting quieter volumes in Q1 followed by a
strong performance from Q2 to June 2024 with increased activity across almost
all territories, particularly Continental Europe and Asia Pacific.
· Highly cash generative, with cash generated from operations up
13.3% to £41.7 million, supporting the Group's investment in its growth
strategy and returns to shareholders.
· The Group has a strong balance sheet, with £82.7 million of gross
cash and a net cash balance of £21.7 million at the period end, excluding
investments in convertible bonds of £3.7 million.
· Diluted earnings per ordinary share up 11.8% to 5.97 pence,
reflecting the continued focus on delivering meaningful profitable growth
returns for all shareholders.
· Interim dividend up 16.2% to 3.45 pence per Ordinary Share, which
will be paid at the end of November, will return £13.0 million to
shareholders. The Group's policy is to pay annual dividends in excess of 55%
of annual profits, subject to market and capital requirements.
OUTLOOK
· The Group will continue to capitalise on significant market
opportunities for photobooth and laundry services.
· Strong Revolution laundry machine installation pipeline,
targeting 80-90 per month, and on track to deliver a record number of
installations in H2 2024.
· Rollout of next-generation multi-service photobooths with plans
to install 2,000 to 2,500 machines by the end of FY 2024.
· H2 2024 has started strongly and the Group continues to see
positive trading momentum across its operations. As a result, the Board
remains confident that it will deliver another year of record profitability in
FY 2024, in line with current market expectations.
(1) Vending revenue is revenue earned from machines in operation and excludes
revenue from the sale of equipment, consumables, spare parts and services.
This has previously been referred to as operating revenue.
Serge Crasnianski, CEO & Deputy Chairman, commented:
"We are pleased to report positive trading momentum throughout H1 2024, which
has continued into H2 2024, and reflects further strategic progress from the
Group's core automated photobooth and laundry operations which are both
exceptionally profitable and highly cash generative. The Group continues to
focus on profitability, returns and cash generation, with these metrics being
the key performance indicators for the Group. The Group is on track to deliver
another record year across these financial metrics, including the number of
machines deployed."
"Through our continued focus on R&D and technological innovation, the
Group remains focused on prudently exploring new and exciting opportunities
within the automated self-service instant machine category to further
diversify our portfolio, including the planned launch of new machines offering
a broader range of services for our consumers.
"Additionally, the Group's R&D team has devised new production techniques
to reduce the cost of the next-generation photobooths by 28% (effective
immediately) and the Revolution laundry machine by 13% (effective FY 2025). A
new generation solar panel, which delivers twice the power generation of the
current model, is also in development and will be utilised by the Group's
Revolution machines
"I look forward to updating you on the Group's progress and I thank our
employees and partners for their continued support."
ENQUIRIES:
ME Group International plc +44 (0) 1372 453 399
Stéphane Gibon, CFO ir@me-group.com (mailto:ir@me-group.com)
Vlad Crasneanscki, Head of Investor Relations
Hudson Sandler +44 (0) 20 7796 4133
Wendy Baker / Nick Moore / Eloise Fleet me-group@hudsonsandler.com (mailto:me-group@hudsonsandler.com)
NOTES TO EDITORS
ME Group International plc (LSE: MEGP) operates, sells and services a wide
range of instant-service vending equipment, primarily aimed at the consumer
market.
The Group operates vending units across 18 countries and its technological
innovation is focused on four principal areas:
· Photo.ME - Photobooths and integrated biometric
identification solutions
· Wash.ME - Unattended laundry services and launderettes
· Print.ME - High-quality digital printing kiosks
· Feed.ME - Vending equipment for the food service market
In addition, the Group operates other vending equipment such as children's
rides, amusement machines, and business service equipment.
Whilst the Group both sells and services this equipment, the majority of units
are owned, operated and maintained by the Group. The Group pays the site owner
a commission based on turnover, which varies depending on the country,
location and the type of machine.
The Group has built long-term relationships with major site owners and its
equipment is generally sited in prime locations in areas of high footfall such
as supermarkets, shopping malls (indoors and outdoors), transport hubs, and
administration buildings (City Halls, Police etc.). Equipment is maintained
and serviced by an established network of more than 650 field engineers.
In August 2022 the Company changed its listed entity name to ME Group
International plc (previously Photo-Me International plc) to better reflect
the Group's diversification focus and business strategy.
The Company's shares have been listed on the London Stock Exchange since 1962.
For further information: www.me-group.com (http://www.me-group.com)
CHAIRMAN'S STATEMENT
The Company is pleased to report further financial and strategic progress in
H1 2024 driven by its core photobooth and laundry operations. This resulted in
the growth of revenue (up 4.6%), EBITDA (up 11.1%) and profit before tax up
(up 10.3%), despite foreign exchange headwinds ("FX impact") which saw the
value of the Japanese Yen and the euro against the British pound sterling
decline by 15% and 2.2% respectively compared with H1 2023. Further details on
the financial performance are set out in the Chief Executive's Business and
Financial Review below.
This strong performance is a testament to the dedication and commitment of my
Board colleagues, the executive team, and every employee across the Group. I
want to thank them all for their continued hard work.
Our growth strategy
The Group's growth strategy is focused on expansion and ongoing
diversification of our operations and continuing to drive attractive levels of
return on invested capital, supported by technological innovation and
modernisation of our automated-vending machine estate. This is reflected by
our strong performance against our targeted payback periods and return on
capital, which significantly exceeds our cost of capital. Our core activity is
to install and operate automated vending equipment, primarily photobooths and
laundry machines, in high footfall areas in return for commission and/or a
fixed fee. We benefit from an established and dominant market position. Our
innovative approach allows us to refresh and diversify the services available
through our machines, alongside a disciplined financial approach and a focus
on minimising production and operational costs, enabling us to capitalise on
operating leverage as we grow our machine estate.
Good progress was made in H1 2024 as we expanded our laundry and photobooth
presence and strengthened partnerships with site owners to support our growth
plans. The pace of Revolution laundry installations was at a record high with
420 machines installed (H1 2023: 404), alongside the continued rollout of our
next-generation photobooths in France. Whilst actively expanding the Group's
presence in existing markets, we continued with a small-scale photobooth trial
in Australia, in line with the Group's longer-term strategy to enter new and
attractive markets.
The Board & Executive Team
As previously announced, Jean-Marc Janailhac stepped down as an Executive
Director of the Company on 2 November 2023, a role he held since July 2020.
Jean-Marc remains on the Board as a Non-executive Director and the Group
continues to benefit from his extensive experience and strategic counsel.
Françoise Coutaz-Replan was appointed to the Company's Remuneration Committee
on 12 July 2024. Biographical details for Miss Coutaz-Replan can be found on
page 71 of the Company's 2023 Annual Report.
Dividend
The Board is pleased to declare an interim dividend of 3.45 pence per Ordinary
Share (H1 2023: 2.97 pence per Ordinary Share), an increase of 16.2%, which
will return £13.0 million to shareholders. The dividend will be paid on 29
November 2024 to shareholders on the register on 7 November 2024. The
ex-dividend date will be 8 November 2024.
This is in line with Group's dividend policy which seeks to pay annual
dividends of more than 55% of annual profits after tax subject to market and
capital requirements, one-third of which is paid as an interim dividend and
the remaining two-thirds paid as a final dividend.
Cancellation of Treasury Shares
The Board of the Company announces that on 12 July 2024 it passed a resolution
to cancel all of its 2,368,626 ordinary shares of 0.5 p each held in treasury.
The cancellation took place with effect from the same date. These shares held
in treasury were purchased via the previously announced buyback at an average
price of 133.17 pence per ordinary share.
Following such cancellation, the total issued share capital comprises
376,586,253 ordinary shares of 0.5p each and the total number of voting rights
is 376,586,253. Shareholders should use this figure when determining if they
are required to notify their interest in, or a change to their interest in,
the Company under the FCA's Disclosure Guidance and Transparency Rules.
Sustainability at ME Group
The Board is committed to strengthening our Sustainability activity. Our
journey encompasses everything from innovative photobooths to our
environmentally-friendly self-service laundry machines and other automated
vending equipment, which all aim to make everyday life easier, and embed
sustainable practices into the fabric of our business.
We have launched a CSRD policy in France, led by dedicated sustainability
experts, with plans to extend this approach to our European operations over
the next few years. This approach will enhance our sustainability reporting,
which will add new quantitative and qualitative indicators to our reporting.
Details of our Sustainability approach are set out in our Annual Report 2023.
Looking ahead
Historically, the second half of the financial year is seasonally the
strongest for the Group in terms of financial performance, with higher demand
for photo ID for passports and from students at the start of the new academic
year. Furthermore, Revolution laundry operations tend to see higher machine
usage during the summer months.
The Board is pleased with how H2 has started and the Group is on track to
deliver a record number of new Revolution machine installations in H2 2024,
giving the Board continued confidence the Group will deliver record
profitability for the year, in line with current market expectations. The
Group remains highly cash generative with a strong financial position,
ensuring it is able to fund its growth plans and capitalise on the significant
market opportunity for laundry and photobooth services.
Sir John Lewis OBE
Non-executive Chairman
15 July 2024
CHIEF EXECUTIVE'S BUSINESS AND FINANCIAL REVIEW
Financial performance
We are pleased to report positive trading momentum throughout H1 2024 and
further strategic progress from the Group's core activities of automated
photobooth and laundry services. Reported revenue in H1 2024 was £150.4
million, an increase of 4.6% compared with H1 2023 (up 8.6% excluding FX
impact).
Wash.ME was the fastest-growing business area, with total laundry revenue up
16.7% at £44.1 million. Vending revenue from Revolution laundry machines grew
strongly, increasing 18.4% to £41.2 million (up 20.4% excluding FX impact).
EBITDA increased by 15.3% to £21.1 million (up 17.5% excluding FX impact).
Photo.ME, our photobooth business, performed well benefiting from ongoing
demand for photo ID services. Vending revenue was up 2.4% to £85.9 million
(up 7.5% excluding FX impact) and EBITDA decreased by 1.3% to £29.3 million
(increased 2.7% excluding FX impact).
The performance by geography saw revenue for Continental Europe increase by
5.2% to £98.3 million, with operating profit stable at £21.0 million. In
the UK & Republic of Ireland, revenue was down 1.9% to £25.7 million,
however, operating profit was up by 28.6% to £7.2 million. Revenue for Asia
Pacific increased by 9.1% to £26.4 million. Further detail is set out in the
Review of Performance by Geography below.
Reported EBITDA increased by 11.1% to £51.2 million (H1 2023: £46.1
million), which delivered an improved EBITDA margin of 34.0% (H1 2023: 32.2%).
Excluding FX impact EBITDA increased by 14.8%.
Reported profit before tax was up 10.3% at £30.0 million (H1 2023: £27.2
million), with the Group benefiting from operational leverage as the number of
machines in operation increased. Profit after tax increased by 10.8% to £22.6
million (H1 2023: £20.4 million). Excluding FX impact profit before tax
increased by 13.6% and profit after tax increased by 15.7%.
Cash generated from operations increased significantly, up 13.3% to £41.7
million (H1 2023: £36.8 million). In line with our growth strategy, cash
generated from operations supports our investment in growing our core
activities of photobooth and laundry services. As a result, capital
expenditure increased by £5.5 million to £26.6 million (H1 2023: £21.1
million).
Given the FX headwinds in H1 2024, the Group is exploring options to mitigate
its exposure to currency risk. This includes hedging its large GBP
commitments, such as dividends. However, as the Group earns a large share of
its revenue in foreign currencies, its consolidated results will be impacted
by exchange rate fluctuations to some extent.
Financial position
As at 30 April 2024, the Group had gross cash of £82.7 million, down 26.9%
compared with H1 2023 (H1 2023: £113.1 million). The net cash balance reduced
11.1% to £21.7 million (H1 2023: £24.4 million), excluding investments in
convertible bonds of £3.7 million (H1 2023: £4.7 million). In November, 2023
£1.0 million of the convertible bonds were converted to equity (see note 10
for details). In H1 2024, the Group made loan repayments totaling £14.9
million and it continued to invest in its growth strategy.
In the 12 months ending 30 April 2024, the Group has returned £24.8 million
to shareholders through dividend payments. The Group remains in a strong
financial and liquidity position to fund its future growth strategy.
Overview of principal business areas
Below is an overview of the Group's four principal business areas: photobooth
(Photo.ME), laundry (Wash.ME), digital printing (Print.ME) and food (Feed.ME).
In addition, the Group operates Other Vending Equipment.
Photo.ME Photobooths and secure integrated biometric photo ID
solutions
Six months ended Six months ended
30 April 2024
30 April 2023
Number of units in operation 30,708 27,275
Percentage of total group vending estate (number of units) 64.0% 62.3%
Vending revenue(1) £85.9m £83.9m
Capex £9.0m £1.3m
EBITDA £29.3m £29.7m
( )
(1) Vending revenue is revenue earned from machines in operation and excludes
revenue from the sale of equipment, consumables, spare parts and services.
This has previously been referred to as operating revenue.
Photobooth operations are the Group's most established and largest business
area by number of units, revenue and EBITDA contribution.
The Group's photobooth growth strategy is centred on the rollout of the
next-generation machine and increasing the utilisation rate of machines, which
has a material drop through to profit. We are a leading provider of automated
photo ID services for official documents, such as passports and driving
licences. Our next-generation photobooth provides this service plus the
capability for new features, functionality and an enhanced user experience,
such as smartphone printing.
Demand for photo ID services remained robust with the strongest performing
territories being France and Japan. Vending revenue increased by 2.4% to
£85.9 million (H1 2023: £83.9 million). The average revenue per machine in
H1 decreased 8.4% to £2,795 (H12023: £3,051) and 3.8% excluding FX impact.
This was due to a period of lower demand in Q1 2024, however, Q2 saw stronger
performance which continued in Q3 during which time the Group continued to
relocate a small number of machines to higher footfall sites which are
expected to perform stronger in H2.
Capex increased significantly to £9.0 million (H12023: £1.3 million) as the
Group progressed with its rollout of next-generation photobooths, with more
than 1,400 installed in H1 2024 replacing machines in high-footfall
locations.
EBITDA reduced slightly to £29.3 million (H1 2023: £29.7 million), however,
excluding the FX impact EBITDA was up 2.7% . EBITDA margin for Photo.ME
operations remained robust at 34.1% in H1 with the segment's EBITDA
contribution representing 57.2% of Group EBITDA.
At 30 April 2024, the number of photobooths in operation was up by 12.6% at
30,708 units (H1 2023: 27,275), mainly due to the acquisition of 3,611
photobooths in Japan in the previous financial year. Photo.ME operations
accounted for 64.0% of the Group's total vending units.
The Group aims to install 2,000 - 2,500 next-generation machines by the end of
FY 2024 with £5 million to £6 million of expected capex in H2, and
approximately 8,000 next-generation photobooths by the end of FY 2025. In
addition, the Group is modernising the hardware of its existing photobooth
estate by installing new proprietary software.
The Board continues to believe there remains attractive longer-term
opportunities in the photo ID market across existing and new geographic
markets. This includes the UK where, despite the Government's acceptance of
home-taken photos for official documents, we continue to see good consumer
demand for our photobooth services.
Wash.ME Unattended Revolution laundry services and
launderettes
Six months ended Six months ended
30 April 2024
30 April 2023
Total Laundry units deployed (owned, sold and acquisitions) 7,317 6,239
Total revenue from Laundry operations(1) £44.1m £37.8m
Total Laundry EBITDA £21.1m £18.3m
Revolution
- Number of Revolutions in operation 5,957 5,048
- Percentage of total group vending estate (number of units) 12.4% 11.5%
- Vending revenue from Revolutions(2) £41.2m £34.8m
- Revolution capex £12.0m £10.8m
( )
(1) Revenue from the operation of laundry machines plus revenue from the sale
of laundry machines.
(2) Vending revenue is revenue earned from machines in operation and excludes
revenue from the sale of equipment, consumables, spare parts and services.
This has previously been referred to as operating revenue.
( )
( )
Wash.ME is the Group's fastest growing business area by number of units and
EBITDA. These services are popular amongst consumers as they are located in
convenient and accessible locations, providing rapid washing and drying
capabilities for up to 20kg of laundry. Our laundry operations benefit from
established partnerships with high footfall site owners, industry-leading
technology, long term investment and ongoing maintenance from our network of
dedicated field engineers and, along with limited competition in the market,
leaves our Wash.ME business well placed to continue growing.
Total Wash.ME revenue grew by 16.7% to £44.1 million (up 18.8% excluding FX
impact), driven by strong demand and record expansion of Revolution laundry
units. The total number of laundry units deployed increased by 17.3% to 7,317
units at 30 April 2024.
Total Laundry EBITDA increased by 15.3% to £21.1 million (H1 2023 £18.3
million). EBITDA margin for Laundry operations stood at 47.8% in H1, with the
segment's EBITDA contribution representing 41.2% of Group EBITDA.
Revolution laundry operations
Vending revenue from Group-operated Revolution laundry machines increased by
18.4% to £41.2 million (up 20.4% excluding FX impact), which reflected both
an increase in customer visits and the number of machines in operation.
Revolution laundry operations represented 27.4% of total Group revenue, up
13.2% on H1 2023, reflecting the fact that this is a core growth driver for
the business. We expect this trend will continue, with Revolution becoming a
larger contributor to Group performance.
The average revenue per machine in H1 increased 1.0% to £7,171 (H1 2023:
£7,106), up 2.7% excluding FX impact.
The number of Revolution units in operation grew by 18.0% to 5,957. In line
with the Group's strategy, this business area once again increased as a
proportion of the total estate and accounted for 12.4% of the Group's total
estate by number of machines (H1 2023: 11.5%).
The Group further expanded across its established partnerships in
high-footfall locations, such as supermarkets and petrol forecourts. A record
420 Revolution machines were installed across the UK, France and Ireland, an
average of 70 machines per month in H1.
Revolution capex increased to £12.0 million (H1 2023: £10.8 million).
This investment almost entirely relates to the purchase and installation cost
associated with deploying Revolution machines.
The Group has a strong installation pipeline and plans to install new machines
at a rate of 80-90 machines per month in H2 2024, which leaves us on track to
deploy a record number of Revolution machines during FY 2024. Expected
Revolution capital expenditure in H2 2024 is £14.0 million to £18.0 million.
The laundry services consumer App was launched in summer 2023, aimed at
improving the consumer experience, including a 'Wash.ME store locator'
function and rewarding loyalty through promotions. Since pushing the mobile
app to consumers over the past few months, we have achieved over 21,000
downloads on Android and IOS platforms across Europe, with 75% conversion to
registered users, of which 60% opted into our push notifications. We believe
our consumer App will support active engagement with customers and allow the
Group to push targeted marketing campaigns to drive repeat sales going
forward.
Print.ME High-quality digital printing service
Six months ended Six months ended
30 April 2024
30 April 2023
Number of units in operation 4,635 4,740
Percentage of total group vending estate (number of units) 9.7% 10.8%
Vending revenue(1) £5.2m £5.8m
Capex £0.2m £1.3m
EBITDA £2.0m £2.0m
(1) Vending revenue is revenue earned from machines in operation and excludes
revenue from the sale of equipment, consumables, spare parts and services.
This has previously been referred to as operating revenue.
Print.ME is an ancillary business area with operations primarily in France and
in the UK and Switzerland. The Group's strategy is to continue to replace old
machines with the newest model, whilst we continue to deploy next-generation
photobooths which also have high quality digital printing functionalities. The
Group will also continue to enter into contracts that are similar to the FNAC
partnership.
Vending revenue decreased by 10.3% to £5.2 million (H1 2023: £5.8
million), due to FX impact and the redeployment of 240 machines to a new
contract with FNAC, a leading French multinational retail chain. This contract
employs a different business model and the revenue earned from it is
recognised in sales of consumables, outside of the Print.ME segment. This has
contributed to the like-for-like drop in vending revenue.
Excluding FX impact, revenue was down 8.6%. Print.ME represented a small
contribution of Group revenue at 3.5%
The average revenue per machine in H1 reduced 9.3% to £1,110 (H1 2023:
£1,224). Excluding FX impact, it was down 7.5%. This is expected to catch up
in the second half of the year thanks to the exchange of old models for new
units (around 500), which is expected to drive performance improvements.
EBITDA was stable at £2.0 million and Print.ME contributed 3.9% of Group
EBITDA (H1 2023: 4.3%). EBITDA margin improved to 38.5% (H1 2023: 34.5%).
Capex was lower at £0.2 million (H1 2023: £1.3 million). During H1, the
Group installed 33 new machines, which is expected to increase significantly
following the delivery of 500 new machines to be installed in France in H2
2024 which will refresh the portfolio and customer experience. Capex for H2
2024 is expected to be in the region of £2.5 million. The next-generation
photobooths will have similar functionalities to the Group's digital printing
kiosks, thereby expanding the availability of this service to consumers.
At 30 April 2024 the Group had 4,635 kiosks in operation, down 2.2% (H1 2023:
4,740). Print.ME kiosks accounted for 9.7% of the total number of vending
units in operation. The Group's key markets of operation are France, where
most of the machines are situated, the UK and Switzerland.
Feed.ME Vending equipment for the food service market
Our food vending equipment operations are a small and profitable part of the
Group. Total revenue in H1 2024 was £5.0 million (H1 2023: £6.4 million),
which contributed 3.3% to Group revenue. While this business area remains
attractive, it has developed more slowly post-pandemic than anticipated.
Consequently, the Board decided to sell its Sempa operations, which specialise
in the sale of fresh juice equipment. The disposal completed on 20 May 2024
for a total cash consideration of €4.6 million. The sale proceeds will be
invested in growing the Group's core activities and business areas of
photobooths and laundry operations, as well as continuing to invest in the
operation of fresh juice machines. For further details refer to notes 13 and
15.
The Group continues to operate freshly squeezed orange juice machines in Japan
and Australia, including fulfilment of oranges for the machines. A further 100
machines were installed in H1 2024, bringing the total to 475 machines in
operation. Japan's freshly squeezed fruit juice vending market is significant,
particularly in Tokyo, supporting the Group's plans to expand operations
further.
In addition, the Group sells pizza vending equipment in Continental Europe and
the UK, albeit on a small scale. The Group expects this will remain a small
financial contributor to the Group going forward.
Other vending equipment
As at 30 April 2024, the Group operated 6,114 other vending units (30 April
2023: 6,702) in addition to our four principal business areas. This
included 2,383 children's rides (Amuse.ME), 3,385 photocopiers (Copy.ME) and
346 other miscellaneous machines.
The Group will continue to operate other vending units where
profitable. These machines are typically located in high-footfall locations
alongside the Group's principal activities, thereby benefitting from existing
site owner relationships and operating synergies.
Other vending equipment accounted for 13.8% of the Group's total vending
estate by number of units, down 1.5% compared with the previous year and
represented 1.9% of the total Group revenue.
REVIEW OF PERFORMANCE BY GEOGRAPHY
Commentary on the Group's financial performance is set out below, in line with
the segments as operated by the Board and the management of the Group. These
segmental breakdowns are consistent with the information prepared to support
the Board's decision-making. Although the Group is not managed around product
lines, some commentary below relates to the performance of specific products
in the relevant geographies.
Vending units in operation
At 30 April 2024 At 30 April 2023 Year on Year
Number % of total Number % of total % Change in
of units estate of units estate Number of units
Continental Europe 26,564 55.4% 25,604 58.5% 3.7%
UK & Republic of Ireland 6,357 13.3% 6,586 15.0% (3.5)%
Asia Pacific 15,024 31.3% 11,621 26.5% 29.3%
Total 47,945 100% 43,811 100% 9.4%
The total number of vending units in operation at 30 April 2024 increased by
9.4% to 47,945 compared with the prior year (H1 2023: 43,811), mainly driven
by the photobooth acquisition in Japan and the ongoing expansion of laundry
operations.
Key financials
The Group reports its financial performance based on three geographic regions
of operation:
(i) Continental Europe; (ii) the UK & Republic of Ireland; and (iii)
Asia Pacific.
Six months ended Six months ended
30 April 2024
30 April 2023
Continental Europe £21.0m £21.0m
UK & Republic of Ireland £7.2m £5.6m
Asia Pacific £3.3m £3.3m
Corporate costs £(1.2)m £(2.4)m
Total £30.3m £27.5m
Revenue by geographic region
Six months ended Six months ended
30 April 2024
30 April 2023
Continental Europe £98.3m £93.4m
UK & Republic of Ireland £25.7m £26.2m
Asia Pacific £26.4m £24.2m
Total £150.4m £143.8m
Analysis of Revenue by Geographic Region
Six months ended 30 April 2024 Continental United Kingdom Asia
Europe & Ireland Pacific Total
Photo.ME £53.0m £10.3m £22.6m £85.9m
Wash.ME £27.6m £14.0m £0.1m £41.7m
Print.ME £5.1m £0.1m - £5.2m
Feed.ME - - £2.2m £2.2m
Other Vending Equipment £1.0m £0.8m £1.0m £2.8m
Total Vending Revenue £86.7m £25.2m £25.9m £137.8m
Sales of equipment, spare parts, consumables & services £11.6m £0.5m £0.5m £12.6m
Total Revenue £98.3m £25.7m £26.4m £150.4m
Six months ended 30 April 2023 Continental United Kingdom Asia
Europe & Ireland Pacific Total
Photo.ME £52.0m £11.9m £20.0m £83.9m
Wash.ME £23.3m £12.0m £0.1m £35.4m
Print.ME £5.7m £0.1m - £5.8m
Feed.ME - - £1.8m £1.8m
Other Vending Equipment £2.5m £1.2m £2.2m £5.9m
Total Vending Revenue £83.5m £25.2m £24.1m £132.8m
Sales of equipment, spare parts, consumables & services £9.9m £1.0m £0.1m £11.0m
Total Revenue £93.4m £26.2m £24.2m £143.8m
Operating profit by geographic region
Six months ended Six months ended
30 April 2024
30 April 2023
Continental Europe £21.0m £21.0m
UK & Republic of Ireland £7.2m £5.6m
Asia Pacific £3.3m £3.3m
Corporate costs £(1.2)m £(2.4)m
Total £30.3m £27.5m
Continental Europe
Revenue increased by 5.2% to £98.3 million and the region contributed 65.4%
of total Group revenue. The value of the euro against the British pound
sterling declined by 2.2% compared with H1 2023. Excluding FX impact, revenue
in Continental Europe was up 7.3% compared with H1 2023.
Wash.ME performed particularly strongly with vending revenue up 18.5%,
reflecting the ongoing expansion and demand for the service. The expansion of
laundry operations has continued at pace, with a further 282 machines
installed, bringing the total number in operation across Continental Europe to
4,492. The Group is working closely with its established partners and key
customer accounts, which include major supermarket groups, to grow its vending
estate across the region.
Photo.ME grew by 1.9%. Print.ME decreased by 10.5%, due in part to the
redeployment of printing machines to the FNAC contract.
Operating profit was flat at £21.0million, due to a £2.3 million increase in
depreciation resulting from the capital investment in new machines. Excluding
FX impact operating profit was up 1.9%.
As at 30 April 2024, 26,564 units were in operation, which represented 55.4%
of the Group's total vending estate.
Continental Europe is the Group's largest region by number of machines and
contribution to Group revenue and EBITDA.
UK & Republic of Ireland
Revenue decreased by 1.9% to £25.7 million (down 1.5% excluding FX impact on
Irish operations), primarily driven by the Group's exit from a contract in our
photobooth business, however, this has had a limited impact on profit
generation. This was partially offset by the expansion of Revolution laundry
machines in operation and further photobooth installations. This region
represented 17.1% of Group revenue.
Wash.ME performed strongly, with vending revenue up 16.7%, with 141 Revolution
laundry units installed (mainly in the UK), bringing the total number of
machines in operations in the region to 1,462, up 23.9% compared with H1 2023.
To support the Group's growth strategy and its focus on building market share,
it has entered into new partnerships with national retailers and strengthened
existing ones.
Operating profit increased by 28.6% to £7.2 million, which reflected further
growth and the Group's focus on cost efficiencies.
As at 30 April 2024, there were 6,357 units in operation in the region, which
represented 13.3% of the Group's total vending estate.
Asia Pacific
Revenue in the region increased by 9.1% to £26.4 million, which represented
17.6% of Group revenue. This performance was driven by Photo.ME vending
revenue up 13.0%, due to the increased number of photobooths in operation
following the Fuji acquisition. Vending revenue from other vending equipment
and Feed.ME operations, which include fresh fruit juice vending machines,
reduced by a 20.0%.
The reported financial performance was impacted by a 15.0% decrease in the
value of the Japanese Yen against Pound Sterling compared with H1 2023.
Excluding FX impact revenue increased by 24.8%.
The 3,611 photobooths previously acquired in Japan have now been fully
integrated into the Group's Japanese operations and expect to benefit from
network optimisation in H2 2024.
The Group has expanded its freshly squeezed orange juice vending operations in
Asia Pacific with 475 machines in operation (H1 2023: 396), operating across
Japan (404 machines) and Australia (71 machines).
Operating profit was flat at £3.3 million, with benefits of the photobooth
acquisition not yet realised. Excluding FX impact, operating profit was up
£0.5 million to £3.8 million.
As at 30 April 2024, there were 15,024 units in operation in the region, an
increase of 29.3%, representing 31.3% of the Group's total units in operation.
PRINCIPAL RISKS
Similar to any business, the Group faces risks and uncertainties that could
impact the achievement of the Group's strategy.
These risks are accepted as inherent to the Group's business. The Board
recognises that the nature and scope of these risks can change; it therefore
regularly reviews the risks faced by the Group as well as the systems and
processes to mitigate them.
The table below sets out what the Board believes to be the principal risks and
uncertainties, their impact, and actions taken to mitigate them.
Economic
Nature of risk Description and impact Mitigation
Global economic Economic growth has a major influence on consumer spending. The Group focuses on maintaining the characteristics and affordability of its
conditions
needs-driven products.
A sustained period of economic recession and a period of high inflation could
lead to a decrease in consumer expenditure in discretionary areas. Like most businesses around the world, the Group has had to face a significant
increase in supply chain and raw material costs, however, its strong position
in the markets in which it operates gives the Group significant pricing power.
The Group has no exposure to the invasion of Ukraine by Russia and other
conflict areas.
Volatility of foreign exchange rates The majority of the Group's revenue and profit is generated outside the UK, The Group hedges its exposure to currency fluctuations on transactions, as
and the Group's financial results could be adversely impacted by an increase relevant. However, by its nature, in the Board's opinion, it is very difficult
in the value of sterling relative to those currencies. Current and imminent to hedge against currency fluctuations arising from translation in
global events (including recent and upcoming elections in France, the UK and consolidation in a cost-effective manner.
the US) could well cause currency volatility.
Regulatory
Nature of risk Description and impact Mitigation
Centralisation of the production of ID photos In many European countries where the Group operates, if governments were to The Group has developed new systems that respond to this situation, leveraging
implement centralised image capture, for biometric passport and other 3D technology in ID security standards, and securely linking our booths to the
applications, or widen the acceptance of self-made or home-made photographs administration repositories. Solutions are in place in France, Ireland,
for official document applications, the Group's revenues and profits could be Germany, Switzerland and the UK.
affected.
Furthermore, the Group also ensures that its ID products remain affordable and
of a high-quality.
Strategic
Nature of risk Description and impact Mitigation
Identification of new business opportunities The failure to identify new business areas may impact the ability of the Group Management teams constantly review demand in existing markets and potential
to grow in the long-term. new opportunities. The Group continues to invest in research in new products
and technologies. Furthermore, the Group also ensures that its ID products
remain affordable and of a high-quality.
Inability to deliver anticipated benefits from the launch of new products The realisation of long-term anticipated benefits depends mainly on the The Group regularly monitors the performance of its entire estate of machines.
continued growth of the laundry and food businesses and the successful New technology-enabled secure ID solutions are heavily trialled before launch
development of integrated secure ID solutions. Failure in this regard could and the performance of operating machines is continually monitored.
lead to a lack of competitiveness.
Market
Nature of risk Description and impact Mitigation
Commercial relationships The Group has well-established, long-term relationships with a number of The Group's major key relationships are supported by medium-term contracts.
site-owners. The deterioration in the relationship with, or ultimately the The Group actively manages its site-owner relationships at all levels to
loss of, a key account would have an adverse, albeit contained, impact on the ensure a high quality of service.
Group's results, bearing in mind that the Group's turnover is spread over a
large client base and none of the accounts represents more than 2% of Group The Group continues to monitor the situation in both the French and the UK
turnover. markets.
To maintain its performance, the Group needs to have the ability to continue
trading in good conditions in France and the UK, taking into account the
situation in these two countries
Operational
Nature of risk Description and impact Mitigation
Reliance on foreign manufacturers The Group sources most of its products from outside the UK. Consequently, the Extensive research is conducted into quality and ethics before the Group
Group is subject to risks associated with international trade. procures products from any new country or supplier. The Group also maintains
very close relationships with both its suppliers and shippers to ensure that
risks of disruption to production and supply are managed appropriately.
Reputation The Group's brands are key assets of the business. Failure to protect the The protection of the Group's brands in its core markets is sustained with
Group's reputation and brands could lead to a loss of trust and confidence. certain unique features. The appearance of the machine is subject to high
This could result in a decline in our customer base. maintenance standards. Furthermore, the reputational risk is diluted as the
Group also operates under a range of brands.
Product and The Board recognises that the quality and safety of both its products and The Group continues to invest in its existing estate, to ensure that it
service quality services are of critical importance and that any major failure could affect remains contemporary, and in constant product innovation to meet customer
consumer confidence and the Group's competitiveness.. needs.
The Group also has a programme in place to regularly train its technicians
Technological
Nature of risk Description and impact Mitigation
Failure to keep up with advances in technology The Group operates in fields where upgrades to new technologies are critical. The Group mitigates this risk by continually focusing on R&D.
Failure to exceed or keep in step could result in a lack of ability to
compete.
Cyber risk: Third party attack on secure ID data transfer feeds The Group operates an increasing number of photobooths capturing ID data and The Group undertakes an ongoing assessment of the risks and ensures that the
transferring these data directly to government databases. The rising threat of infrastructure meets the security requirements.
cybercrime could lead to business disruption as well as to data breaches.
Environmental
Nature of risk Description and impact Mitigation
Increased potential legislation and the rising cost of waste disposal. Energy The rising costs associated with compliance with such increased demands could Reducing the amount of waste produced; and the recovery, refurbishment and
consumption, water scarcity, and rising car fuel prices (for employees, impact on overall profitability.. resale of electrical equipment such as children's rides which promote the
suppliers, transportation and final consumers) and raising awareness of the principle embodied in recent legislation of reuse before recycling.
climate crisis amongst consumers.
Serge Crasnianski
Chief Executive Officer & Deputy Chairman
15 July 2024
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 April 2024
Unaudited Unaudited Audited
six months to six months to 12 months to
30 April 30 April 31 October
2024 2023 2023
Notes £ '000 £ '000 £ '000
Revenue 3 150,355 143,822 297,662
Cost of Sales (103,965) (100,301) (195,017)
Gross Profit 46,390 43,521 102,645
Other Operating Income 73 123 194
Administrative Expenses (16,188) (16,180) (35,351)
Share of Post-Tax Profits from Associates - - 14
Operating Profit 3 30,275 27,464 67,502
Non-operating income 4 133 191 701
Finance Income 763 580 1,401
Finance Cost (1,207) (1,050) (2,537)
Profit before Tax 29,964 27,185 67,067
Total Tax Charge 5 (7,339) (6,797) (16,401)
Profit for the period 22,625 20,388 50,666
Other Comprehensive Income
Items that are or may subsequently be classified to Profit and Loss:
Exchange Differences Arising on Translation of Foreign Operations (3,192) 1,195 454
Total Items that are or may subsequently be classified to profit and loss (3,192) 1,195 454
Items that will not be classified to profit and loss:
Remeasurement losses in defined benefit obligations and other post-employment benefit obligations - - (220)
Deferred tax on remeasurement gains - - 48
Total Items that will not be classified to profit and loss - - (172)
Other comprehensive (expense) / income for the year net of tax (3,192) 1,195 282
Total Comprehensive income for the period 19,433 21,583 50,948
Profit for the Period Attributable to:
Owners of the Parent 22,625 20,388 50,666
Non-controlling interests - - -
22,625 20,388 50,666
Total comprehensive income attributable to:
Owners of the Parent 19,433 21,583 50,948
Non-controlling interests - - -
19,433 21,583 50,948
Earnings per Share
Basic Earnings per Share 7 6.01p 5.39p 13.40p
Diluted Earnings per Share 7 5.97p 5.34p 13.31p
All results derive from continuing operations.
The accompanying notes form an integral part of these condensed consolidated
financial statements.
GROUP STATEMENT OF FINANCIAL POSITION
As at 30 April 2024
Unaudited Unaudited Audited
30 April 30 April 31 October
2024 2023 2023
(restated) (restated)
Notes £'000 £'000 £'000
Assets
Goodwill 9 15,223 16,420 18,888
Other intangible assets 9 12,025 20,219 17,822
Property, plant & equipment 9 122,300 104,780 118,124
Investment property 9 - 596 -
Investment in associates 34 21 35
Financial instruments held at FVTPL 10 2,146 5,437 5,886
Other receivables 3,104 3,013 3,005
Non-Current Assets 154,832 150,486 163,760
Inventories 11 37,430 33,595 32,501
Trade and other receivables 11,830 16,117 12,010
Current tax 10,988 3,227 7,962
Financial instruments held at FVTPL 10 3,728 - -
Cash and cash equivalents 12 82,656 113,057 111,091
Current assets 146,632 165,996 163,564
Assets of the disposal group and non-current assets classified as held for sale 13 12,511 - 5,198
Total assets 313,975 316,482 332,522
Equity
Share capital 1,893 1,890 1,891
Share premium 11,311 10,627 11,083
Treasury shares (3,394) - (1,969)
Translation and other reserves 9,069 12,785 11,958
Retained earnings 147,447 119,533 136,025
Total Shareholders' funds 166,326 144,835 158,988
Liabilities
Financial liabilities 12 44,919 67,726 58,447
Post-employment benefit obligations 3,848 3,884 4,063
Deferred tax liabilities 5,507 7,491 8,566
Non-current liabilities 54,274 79,101 71,076
Financial liabilities 12 26,648 34,140 32,063
Provisions 1,196 1,607 1,884
Current tax 9,478 4,727 10,590
Trade and other payables 52,893 52,072 57,921
Current liabilities 90,215 92,546 102,458
Liabilities of the disposal group classified as held for sale 13 3,160 - -
Total equity and liabilities 313,975 316,482 332,522
The balance of capitalised development costs at 30 April 2023 has been
restated by £4,650,000 to correct an error in the prior period interim
financial statements. The adjustment represents the value of work in progress
which had previously been reported in prepayments under trade and other
receivables. A corresponding adjustment has been made to reduce the balance of
prepayments by the same value.
The balance of assets of the disposal group and non-current assets classified
as held for sale at 31 October 2023 has been restated by £4,613,000 to
correct an error in the prior period interim financial statements. The
adjustment represents the value of capital additions to the asset held for
sale which had previously been reported in prepayments under trade and other
receivables. A corresponding adjustment has been made to reduce the balance of
prepayments by the same value.
The accompanying notes form an integral part of these condensed consolidated
financial statements.
GROUP CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 30 April 2024
Unaudited Unaudited Audited
Six months to
Six months to
12 months to
30 April
30 April
31 October
2024
2023
2023
Notes £'000 £'000 £'000
Cash flow from operating activities
Profit before tax 29,964 27,185 67,067
Finance costs 545 495 1,286
Interest of lease liabilities 662 555 1,251
Finance income (763) (580) (1,401)
Non-operating income (133) (191) (701)
Operating profit 30,275 27,464 67,502
Amortisation and impairment of intangible assets 3,121 2,309 6,586
Depreciation and impairments of property, plant and equipment 17,757 16,358 32,552
Loss on sale of property, plant and equipment and intangible assets 47 254 555
Exchange differences 1,347 (498) (129)
Movements in provisions and post-employment benefit obligations (903) 77 362
Other non cash items (34) (131) (33)
Changes in working capital:
Inventories (4,929) (8,104) (7,010)
Trade and other receivables 80 (772) (1,387)
Trade and other payables (5,027) (176) 5,673
Cash generated from operations 41,734 36,781 104,671
Interest paid (1,207) (1,051) (1,136)
Taxation paid (11,892) (12,802) (20,203)
Net cash generated from operating activities 28,635 22,928 83,332
Cash flows from investing activities
Acquisition of subsidiaries - - (4,790)
Deferred consideration for acquisition of subsidiaries (100) - -
Proceeds from disposal of subsidiaries - 209 209
Cash held by disposal group classified as held for sale (262) - -
Purchase of intangible assets (967) (1,372) (3,798)
Proceeds from sale of intangible assets - 41 -
Purchase of property, plant and equipment (including additions to non-current assets held for sale) (25,607) (19,767) (45,842)
Proceeds from sale of property, plant and equipment 967 1,079 1,539
Interest received 763 580 -
Net cash utilised in investing activities (25,206) (19,230) (52,682)
Cash flows from financing activities
Issue of ordinary shares to equity shareholders 230 1 458
Purchase of treasury shares (1,425) - (1,969)
Repayment of principal of leases (2,741) (2,707) (5,857)
Repayment of borrowings (14,850) (16,288) (30,960)
New borrowings drawn 638 863 4,817
Dividends paid to owners of the Parent (11,203) (9,829) (23,443)
Net cash utilised in financing activities (29,351) (27,960) (56,954)
Net decrease in cash and cash equivalents (25,922) (24,262) (26,304)
Cash and cash equivalents at beginning of year 111,091 135,200 136,185
Exchange (loss) / gain on cash and cash equivalents (2,513) 2,119 1,210
Cash and cash equivalents at end of year 12 82,656 113,057 111,091
The accompanying notes form an integral part of these condensed consolidated
financial statements.
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 April 2024
Share Share Treasury shares Other Translation Retained Total
capital
premium
£'000
reserves
reserve
earnings
£'000
£'000
£'000
£'000
£'000
£'000
At 1 November 2022 1,889 10,627 - 2,665 8,494 108,974 132,649
Profit for the period - - - - - 20,388 20,388
Other comprehensive income:
Exchange differences - - - - 1,195 - 1,195
Total other comprehensive income - - - - 1,195 - 1,195
Total comprehensive income - - - - 1,195 20,388 21,583
Transactions with owners of the Parent:
Shares issued in the period 1 - - - - - 1
Share options (note 8) - - - 431 - - 431
Dividends (note 6) - - - - - (9,829) (9,829)
Total transactions with owners of the Parent 1 - - 431 - (9,829) (9,397)
At 30 April 2023 1,890 10,627 - 3,096 9,689 119,533 144,835
Share Share Treasury shares Other Translation Retained Total
capital
premium
£'000
reserves
reserve
earnings
£'000
£'000
£'000
£'000
£'000
£'000
At 1 November 2023 1,891 11,083 (1,969) 3,010 8,948 136,025 158,988
Profit for the period - - - - - 22,625 22,625
Other comprehensive expense:
Exchange differences - - - - (3,192) - (3,192)
Total other comprehensive expense - - - - (3,192) - (3,192)
Total comprehensive expense - - - - (3,192) 22,625 19,433
Transactions with owners of the Parent:
Shares issued in the period 2 228 - - - - 230
Purchase of treasury shares - - (1,425) - - - (1,425)
Share options (note 8) - - 303 - - 303
Dividends (note 6) - - - - - (11,203) (11,203)
Total transactions with owners of the Parent 2 228 (1,425) 303 - (11,203) (12,095)
At 30 April 2024 1,893 11,311 (3,394) 3,313 5,756 147,447 166,326
The accompanying notes form an integral part of these condensed consolidated
financial statements.
NOTES
1. General information and authorization of the Interim Report
Me Group International plc (the "Company") is a public limited company
incorporated and registered in England and Wales and whose shares are quoted
on the London Stock Exchange, under the symbol MEGP. The registered number of
the Company is 735438 and its registered office is at Unit 3B, Blenheim Rd,
Epsom, KT19 9AP.
The principal activities of the Group continue to be the operation, sale, and
servicing of a wide range of instant-service equipment. The Group operates
coin-operated automatic photobooths for identification and fun purposes, and a
diverse range of vending equipment, including digital photo kiosks, laundry
machines, and business service equipment, and amusement machines.
The condensed consolidated interim financial statements of Me Group
International plc (the "Company") for the six months ended 30 April 2024 ("the
Interim Report") were approved and authorised for issue by the Board of
Directors on 12 July 2024. These condensed consolidated interim financial
statements comprise the Company and its subsidiaries (together the "Group")
and are presented in pounds sterling, rounded to the nearest thousand.
2. Basis of preparation and accounting policies
The financial statements have been prepared in accordance with IAS 34. The
accounting policies applied are consistent with those that were applied in the
Company's consolidated financial statements for the 12 months ended 31 October
2023 and that are expected to be applied in its consolidated financial
statements for the year ended 31 October 2024.
New accounting standards
Adopted by the Group
The Group has adopted the following new standards and amendments for the first
time in these financial statements with no material impact.
· Disclosure of Accounting Policies (Amendments to
IAS 1 and IFRS Practice Statement 2)
· Definition of Accounting Estimate (Amendments to
IAS 8)
· IAS 12 Income Taxes: Deferred Tax related to
Assets and Liabilities arising from a Single Transaction
· IAS 12 Income Taxes (Amendment): International
Tax Reform - Pillar Two Model Rules
Not yet adopted by the Group
Certain new accounting standards and interpretations have been published and
adopted by the UK but are not mandatory for the current period and have not
been early adopted by the Group. These new standards and interpretations,
which are not expected to have a material effect on the Group, are set out
below.
Description Date required to be
adopted by the Group
Non-current Liabilities with Covenants - Amendments to IAS 1 and 1 January 2024
Classification of Liabilities as Current or Non-current - Amendments to IAS 1
Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 1 January 2024
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7 1 January 2024
The condensed consolidated interim financial statements comprise the unaudited
financial information for the six months ended 30 April 2024. They do not
include all of the information and disclosures required for full annual
financial statements and should be read in conjunction with the Group's
financial statements for the period ended 31 October 2023. The condensed
financial statements do not constitute statutory accounts within the meaning
of section 434 of the UK Companies Act 2006.
The consolidated financial statements of the Group as at and for the period
ended 31 October 2023 are available at www.me-group.com or upon request from
the Company's registered office at Unit 3B, Blenheim Rd, Epsom, KT19 9AP,
Surrey. Those accounts have been reported on by the Company's auditors and
delivered to the Registrar of Companies. The report of the auditors (i) was
unmodified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without modifying their report, and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The Interim Report is unaudited but has been reviewed by the auditors and
their report to the Company is included in the Interim Report.
Accounting policies and estimates
The accounting policies applied by the Group in this Interim Report are the
same as those applied in the Group's financial statements for the 12 months
period ended 31 October 2023.
Estimates and significant judgements
The preparation of the condensed consolidated financial information requires
management to make estimates and assumptions that affect the reported amounts
of revenue, expenses, assets and liabilities and the disclosure of contingent
liabilities at the date of the condensed consolidated financial information.
Such estimates and assumptions are based on historical experience and various
other factors that are believed to be reasonable in the circumstances and
constitute management's best judgement at the date of the financial
statements. In future, actual experience may deviate from these estimates and
assumptions, which could affect the financial statements as the original
estimates and assumptions are modified, as appropriate, in the period in which
the circumstances change.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were in the same areas
as those that applied in the consolidated financial statements as at and for
the period ended 31 October 2023.
Use of non-GAAP profit measures
The Group measures performance using earnings before interest, tax,
depreciation and amortisation ("EBITDA"). EBITDA is a common measure used by a
number of companies but is not defined in IFRS.
The Group measures cash on a net cash basis as explained in note 12.
Going Concern
The Annual Report for the period ended 31 October 2023 provided a full
description of the Group's business activities, its financial position, cash
flows, funding position and available facilities together with the factors
likely to affect its future development, performance and position. It also
detailed risks associated with the Group's business. This interim report
provides updated information on these subjects for the six months to 30 April
2024.
The Group has at the date of this Interim Report, sufficient financing
available for its estimated requirements for at least the next twelve months,
together with the proven ability to generate cash from its trading
performance. This provides the Directors with confidence that the Group is
well placed to manage its business risks successfully in the context of the
current financial conditions and the general outlook in the global economy.
After reviewing the Group's annual budgets, plans and financing arrangements,
the Directors consider that the Group has adequate resources to continue
operating for the foreseeable future. The board considers it appropriate to
adopt the going concern basis of accounting in preparing the interim financial
statements and has not identified any material uncertainties to the company's
ability to continue to do so over a period of at least twelve months from
their date of approval.
3. Segmental analysis
IFRS 8 requires operating segments to be identified, based on information
presented to the Chief Operating Decision Maker (CODM) in order to allocate
resources to the segments and monitor performance. The Group reports its
segments on a geographical basis: Asia Pacific, Continental Europe and United
Kingdom & Ireland. The Group's Continental European operations are
predominately based in Western Europe and, with the exception of the Swiss
operations, use the Euro as their domestic currency. The Board, being the
CODM, believe that the economic characteristics of the European operations,
together with the fact that they are similar in terms of operations, use
common systems and the nature of the regulatory environment allow them to be
aggregated into one reporting segment.
Seasonality of operations
Historically, the second half of the financial year is seasonally the
strongest for the Group in terms of profits.
Segmental results are reported before intra-group transfer pricing charges.
Asia Continental United Kingdom
Pacific Europe & Ireland Corporate Total
Six months to 30 April 2024 £'000 £'000 £'000 £'000 £'000
Revenue from external customers 26,408 98,269 25,678 - 150,355
EBITDA 5,983 35,615 10,514 (932) 51,180
Depreciation, amortisation and impairment (2,724) (14,615) (3,345) (221) (20,905)
Operating profit / (loss) 3,259 21,000 7,169 (1,153) 30,275
Operating profit 30,275
Non-operating income 133
Finance income 763
Finance costs (1,207)
Profit before tax 29,964
Tax (7,339)
Profit for the period 22,625
Capital expenditure (excluding Right of Use assets) 1,289 19,484 5,420 381 26,574
Asia Continental United Kingdom
Pacific Europe & Ireland Corporate Total
Six months to 30 April 2023 £'000 £'000 £'000 £'000 £'000
Revenue from external customers 24,235 93,422 26,165 - 143,822
EBITDA 5,794 33,322 9,126 (2,112) 46,130
Depreciation, amortisation and impairment (2,539) (12,363) (3,597) (167) (18,666)
Operating profit / (loss) 3,255 20,959 5,529 (2,279) 27,464
Operating profit 27,464
Non-operating income 191
Finance income 580
Finance costs (1,050)
Profit before tax 27,185
Tax (6,797)
Profit for the period 20,388
Capital expenditure (excluding Right of Use assets) 4,000 13,953 2,817 369 21,139
Asia Continental United Kingdom
Pacific Europe & Ireland Corporate Total
12 months to 31 October 2023 £'000 £'000 £'000 £'000 £'000
Revenue from external customers 44,332 205,157 48,173 - 297,662
EBITDA 9,475 90,109 18,545 (11,490) 106,639
Depreciation, amortisation and impairment (5,163) (27,474) (6,146) (355) (39,138)
Operating profit / (loss) 4,312 62,635 12,399 (11,844) 67,502
Operating profit 67,502
Non-operating income 701
Finance income 1,401
Finance costs (2,537)
Profit before tax 67,067
Tax (16,401)
Profit for the period 50,666
Capital expenditure (excluding Right of Use assets) 8,846 37,494 7,380 733 54,453
Total revenue from external customers is analysed below:
Six months to Six months to 12 months to
30 April 30 April 31 October
2024 2023 2023
£'000 £'000 £'000
Total revenue from external customers:
Sales of equipment, spare parts & consumables 10,982 9,524 18,724
Sales of services 1,605 1,546 3,615
12,587 11,070 22,339
Vending revenue 137,768 132,752 275,323
Total revenue 150,355 143,822 297,662
There were no key customers in the period ended 30 April 2024 (2023: none).
4. Non-operating income
Non-operating income comprises of transactions relating to financial
instruments held at FVTPL, other financial instruments and the disposal of
subsidiaries. They have been disclosed separately in order to improve a
reader's understanding of the financial statements and are not disclosed
within operating profit as they are non-trading in nature.
Six months to Six months to 12 months to
30 April 30 April 31 October
2024 2023 2023
£'000 £'000 £'000
Non-operating income
Gain on disposal of subsidiary - 57 57
Fair value gain on financial instrument held at FVTPL - level 1 - - 356
Fair value gain on financial instrument held at FVTPL - level 3 89 111 230
Other non-operating income 44 23 58
133 191 701
Six months to 30 April 2023
The Group generated a profit on disposal of £57,000 from the disposal of its
Korean subsidiary Photo-Me Korea Company Limited, recognized in other gains in
the income statement.
5. Taxation
Six months to Six months to 12 months to
30 April 30 April 31 October
2024 2023 2023
£'000 £'000 £'000
Profit before tax 29,964 27,185 67,067
Total taxation charge (7,339) (6,797) (16,401)
Effective tax rate 24.5% 25.0% 24.5%
The tax charge in the Group Income Statement is based on management's best
estimate of the full year effective tax rate based on expected 12 Months
profits to 31 October 2024.
The UK main rate of corporation tax increased from 19% to 25% on 1 April 2023.
The Group undertakes business in multiple tax jurisdictions.
6. Dividends paid and proposed
30 April 2024 31 October 2023
pence per share £'000 pence per share £'000
Dividends Paid
Interim dividend
2023 approved by the Board on 11 July 2023 2.97 11,203 - -
Interim dividend
2022 approved by the board on 18 July 2022 - - 2.60 9,829
Special dividend
2022 approved by the Board on 18 July 2022 - - 0.60 2,269
Final dividend
2022 approved at AGM held on 28 April 2023 - - 3.00 11,345
2.97 11,203 6.20 23,443
Dividends Proposed
Final dividend
2023 approved at AGM held on 28 April 2024 4.42 16,640 - -
4.42 16,640 - -
The Board proposed a final dividend of 4.42p per ordinary share in respect of
the year ended 31 October 2023, which was approved by shareholders at the
Annual General Meeting held on 26 April 2024 and paid on 23 May 2024.
7. Earnings per share
Diluted earnings per share amounts are calculated by dividing the net earnings
attributable to shareholders of the Parent by the weighted average number of
shares outstanding during the period plus the weighted average number of
shares that would be issued on conversion of all the dilutive potential shares
into shares. The Group has only one category of dilutive potential shares
being share options granted to senior staff, including directors, as detailed
in note 8.
The earnings and weighted average number of shares used in the calculation of
earnings per share are set out in the table below:
Six months to Six months to 12 months to
30 April 30 April 31 October
2024 2023 2023
Basic earnings per share 6.01 5.39 13.40
Diluted earnings per share 5.97 5.34 13.31
Earnings available to shareholders (£'000) 22,625 20,388 50,666
Weighted average number of shares in issue in the period
- Basic ('000) 376,583 378,152 378,110
- Including dilutive share options ('000) 379,066 381,795 380,600
8. Share based payments
The Group grants share options to senior staff, including directors, allowing
them to purchase Ordinary shares of 0.5p each. As at 30 April 2024, the total
number of options granted and within their vesting period or available to
exercise was 6,198,973.
All options can be exercised, in normal circumstances, within a period of four
years from the vesting date, providing that the performance criterion or
performance condition has been achieved. The subscription price for all
options is based upon the average market price on the three days prior to the
date of grant. Options are restricted, or may lapse, if the grantee leaves the
employment of the Group before the first exercise date.
All options are equity settled options.
Options granted after 2005 are covered by the new ME Group Executive Share
Option Scheme. The vesting of options is subject to an EPS-based performance
condition relating to the extent to which the Company's basic EPS for the
third financial year, following the date of grant, reaches a sliding scale of
challenging EPS targets. Options are normally granted over shares worth up to
150% of a participant's salary each year. In exceptional cases as part of the
terms of attracting senior management, options in excess of that number may be
granted.
In accordance with IFRS 2 Share-based Payments, share options granted to
senior management including directors after November 2002 have been
fair-valued and the Company has used the Black-Scholes option pricing model.
This model takes into account the terms and conditions under which the options
were granted.
The charge for share-based payments in the six months to 30 April 2024 was
£303,000 (Six months to 30 April 2023: £431,000).
9. Non-current assets: Goodwill, other intangibles, property, plant and
equipment and investment property
Goodwill Other Property, plant Investment
intangible & equipment property
assets
£'000 £'000 £'000 £'000
Net book value at 1 November 2022 16,320 20,218 101,090 592
Exchange adjustment 1 (176) 628 9
Additions - photobooths & vending machines - - 39,122 -
Additions - other assets - 3,798 6,720 -
Additions - right of use assets - - 3,516 -
Additions - new subsidiaries 3,268 49 1,496 -
Transfers - (121) 121 -
Transfers to non-current assets held for sale - - - (585)
Amortisation / Depreciation - (4,440) (33,889) (16)
(Impairment) / Reversal of impairment (701) (1,445) 1,353 -
Disposals at net book value - (61) (2,033) -
Net book value at 31 October 2023 18,888 17,822 118,124 -
Exchange adjustment (414) (491) (2,594) -
Additions - acquisition deferred consideration 100 - - -
Additions - capitalised development costs - 460 - -
Additions -software and other intangible assets - 507 - -
Additions - photobooths & vending machines - - 22,564 -
Additions - plant, machinery and vehicles - - 3,043 -
Transferred to non-current assets held for sale (Sempa SAS) (3,351) (3,097) (120)
Amortisation / Depreciation - (3,121) (17,757) -
Disposals at net book value - (55) (960) -
Net book value at 30 April 2024 15,223 12,025 122,300 -
10. Fair values of financial instruments by class
There is no difference between the fair values and the carrying values of
financial assets and financial liabilities held in the Group's statement of
financial position.
Financial instruments held at fair value - Level 1
The Group holds an investment in Max Sight Group Holdings Ltd, which as a
listed company. This investment is valued at level 1. The Group owns
109,972,500 Max Sight Group Holdings Ltd's shares valued at 0.099 HKD per
share as at 30 April 2024, giving a value at that date of £1,145,118.
This financial instrument is valued at the reporting date by reference to
quoted market prices.
Financial instruments held at fair value - Level 2
There are no material Level 2 investments held by the Group or Company.
Financial instruments held at fair value - Level 3
The Group holds 400,000 convertible bonds in Energy Observer Developments SAS,
a privately held company. This investment is valued at level 3 as its value is
linked to the equity value of Energy Observer Developments SAS, which is not
observable market data. At 30 April 2024, the convertible bonds are valued at
£3,728,140.
This financial instrument is valued at the reporting date using discounted
cashflow analysis of the bond cashflows. The key unobservable input to the
valuation calculation is the discount rate of 5%. A 1% increase in the
discount rate used to value the convertible bond would result in a decrease in
valuation of £16,000
The Group also holds 125 B shares in Energy Observer Developments SAS,
following the conversion of 100,000 convertible bonds to equity on 14 November
2023. This investment is valued at level 3 as its value is linked to the
equity value of Energy Observer Developments SAS, which is not observable
market data. At 30 April 2024, the shares are valued at £1,000,992.
This financial instrument is valued at the reporting date by reference to the
latest equity valuation of the issuing company. The equity valuation used was
based on a fund raising by the issuing company. This, in effect, gave an
external, arms-length valuation as new investors were purchasing equity based
on their valuation of the company. This fund raising information is the key
unobservable input to the valuation calculation. A 20% decrease in the equity
value of Energy Observer Developments SAS would result in a decrease in
valuation of £205,000.
Movement in level 3 financial instruments fair value
Convertible Unlisted
Bond Equities Total
£'000 £'000 £'000
Fair Value at 1 November 2022 4,450 - 4,450
Fair value gain recognised in non-operating income 226 - 226
Foreign exchange movement recognised in other comphrensive income 65 - 65
Fair Value at 31 October 2023 4,741 - 4,741
Conversion of bonds to shares (1,022) 1,022 -
Fair value gain recognised in non-operating income 89 - 89
Foreign exchange movement recognised in other comphrensive income (80) (21) (101)
Fair Value at 30 April 2024 3,728 1,001 4,729
Financial instruments by category
The tables below show financial instruments by category held by the Group.
At 30 April 2024 Loans and Fair Value Total
receivables Through
Profit & Loss
£'000 £'000 £'000
Assets per statement of financial position
Financial instruments held at FVTPL - 5,874 5,874
Financial assets - held at amortised cost:
Trade and other receivables (excluding prepayments) 10,994 - 10,994
Cash and cash equivalents 82,656 - 82,656
93,650 5,874 99,524
Other financial Total
liabilities at
amortised cost
£'000 £'000
Liabilities per statement of financial position
Borrowings 60,970 60,970
Leases 10,597 10,597
Trade and other payables 52,893 52,893
124,460 124,460
At 30 April 2023 Loans and Fair Value Total
receivables Through
Profit & Loss
£'000 £'000 £'000
Assets per statement of financial position
Financial instruments held at FVTPL - 5,437 5,437
Financial assets - held at amortised cost:
Trade and other receivables (excluding prepayments) 11,924 - 11,924
Cash and cash equivalents 113,057 - 113,057
124,981 5,437 130,418
Other financial Total
liabilities at
amortised cost
£'000 £'000
Liabilities per statement of financial position
Borrowings 88,649 88,649
Leases 13,217 13,217
Trade and other payables 52,072 52,072
153,938 153,938
At 31 October 2023 Loans and Fair Value Total
receivables Through
Profit & Loss
£'000 £'000 £'000
Financial instruments held at FVTPL - 5,886 5,886
Financial assets - held at amortised cost:
Trade and other receivables (excluding prepayments) 11,286 - 11,286
Cash and cash equivalents 111,091 - 111,091
122,377 5,886 128,263
Other financial Total
liabilities at
amortised cost
£'000 £'000
Liabilities per statement of financial position
Borrowings 77,174 77,174
Leases 13,336 13,336
Trade and other payables 57,921 57,921
148,431 148,431
11. Inventories
Unaudited Unaudited Audited
30 April 30 April 31 October
2024 2023 2023
£'000 £'000 £'000
Raw materials and consumables 26,229 24,884 25,484
Finished goods 11,201 8,711 7,017
37,430 33,595 32,501
12. Net cash
Unaudited Unaudited Audited
30 April 30 April 31 October
2024 2023 2023
£'000 £'000 £'000
Cash and cash equivalents per statement of financial position 82,656 113,057 111,091
Non-current borrowings (38,341) (59,836) (50,137)
Current borrowings (22,629) (28,813) (27,037)
Net cash 21,686 24,408 33,917
Cash and cash equivalents per the cash flow comprise cash at bank and in hand
and short-term deposit accounts with an original maturity of less than three
months, less bank overdrafts.
Net cash is a non-GAAP measure since it is not defined in accordance with IFRS
but is a key indicator used by management in assessing operational performance
and financial position strength. The inclusion of items in net cash as defined
by the Group may not be comparable with other companies' measurement of net
cash/debt. The Group includes in net cash: cash and cash equivalents and
certain financial assets (mainly deposits), less instalments on loans and
other borrowings.
The table above, which is not currently required by IFRS, reconcile the
Group's net cash to the Group's statement of cash flows. Management believes
the presentation of the tables will be of assistance to shareholders.
13. Assets and liabilities of the disposal group and non-current assets
classified as held for sale
Assets of the disposal group and non-current assets classified as held for
sale
Property Assets of disposal group Total
£'000 £'000 £'000
Net Book Value
At 1 November 2022 - - -
Transferred from investment property 585 - 585
At 31 October 2023 585 - 585
Correction of error - reclassification 4,613 4,613
At 1 November 2023 (restated) 5,198 - 5,198
Exchange differences (110) - (110)
Transfer of disposal group assets - 7,423 7,423
At 30 April 2024 5,088 7,423 12,511
The balance of property held for sale at 31 October 2023 has been restated by
£4,613,000 to correct an error in the prior period interim financial
statements. The adjustment represents the value of capital additions to the
asset held for sale which had previously been reported in prepayments under
trade and other receivables. A corresponding adjustment has been made to
reduce the balance of prepayments by the same value.
Liabilities of the disposal group classified as held for sale
Liabilities of disposal group
£'000
Net Book Value
At 1 November 2022 and 2023 -
Transfer of disposal group liabilities 3,160
At 30 April 2024 3,160
Property held for sale
The non-current asset classified as held for sale is an office building
located in Grenoble, France. Management are fully committed to the sale of the
property, have been actively marketing it for sale and expect to complete the
disposal within 12 months of the reporting date.
Prior to its reclassification to held for sale, it was the Group's intention
to occupy the office. In preparation for this the Group invested £4,515,000
in capital works. However, following a detailed review, management concluded
that occupying the office was not the best strategic option and decided to
sell the property.
Upon reclassification to assets held for sale, the £4,515,000 of capital
works was not included in the initial value transferred because it was not
clear whether the value could be recovered through a sale. The Group has since
found a buyer and entered a binding sale agreement to sell the property for
€8,000,000. This ensures that the additional capital spend will be recovered
through the sale proceeds. Therefore, the £4,515,000 has been transferred
from prepayments to the asset held for sale balance.
It is expected that the sale will complete by the Group's financial year end,
31 October 2024.
The property classified as held for sale is included in the Continental Europe
operating segment.
Subsidiary held for sale
Following a review of the Group's operations, management committed to
disposing of its subsidiary Sempa SAS, which specialises in the sale of fresh
juice equipment. After the reporting date, on 20(th) May 2024 the Group
completed its disposal of Sempa SAS for €4,600,000 (please refer to note 15
for further details).
As management was committed to the sale, had identified a buyer and expected
the sale to complete within 12 months of the reporting date, Sempa SAS is
classified as held for sale at the reporting date. This is a disposal of a
group of assets and their associated liabilities, as opposed to the sale of a
single asset, so Sempa SAS is designated as a disposal group held for sale.
Sempa SAS's assets have been reclassified as disposal group assets held for
sale and its liabilities have been reclassified as disposal group liabilities
held for sale. These amounts are disclosed separately in the Group's statement
of financial position. The details of the assets and liabilities of the
disposal group classified as held for sale are shown in the table below.
Details of the disposal group assets and liabilities - Sempa SAS
£'000
Goodwill 3,351
Other intangible assets 3,097
Property, plant & equipment 120
Inventories 462
Trade and other receivables 131
Cash and cash equivalents 262
Total assets of the disposal group 7,423
Deferred tax liabilities (2,644)
Provisions (385)
Trade and other payables (131)
Total liabilities of the disposal group (3,160)
Net assets of the disposal group 4,263
The disposal group classified as held for sale is included in the Continental
Europe operating segment.
14. IFRS 3 Business Combinations
Fujifilm Imaging Systems Co. Ltd.
On 30 September 2023 the Group completed the acquisition of 100% of the
photobooths business of Fujifilm Imaging Systems Co. Ltd (Fujifilm) for an
initial consideration of JPY 905,961,000 (£4,971,000), obtaining control of
the business on that date.
Fujifilm is a Japanese photobooth owner and operator and the acquisition of
its photobooths division added an initial 3,548 photobooth units to the
Group's existing operations in Asia Pacific. This acquisition was in line with
the Group's strategy to expand the number of units in operation.
Deferred consideration
A portion of the total consideration was deferred and contingent on the total
number of photobooth units that were acquired. Post-closing there followed a
six-month period during which further units could be transferred to the Group,
in addition to the 3,548 units transferred at the closing date, and subject to
a maximum number of 3,806. The total consideration increases in proportion
with the number of photobooths acquired, up to a maximum value of JPY
996,000,000 (£5,466,000).
At 31 October 2023, management's best estimate of the deferred consideration
to be paid was JPY 40,039,000 (£220,000). This amount was accrued and
included in the total estimated consideration value of JPY 946,000,000
(£5,191,000).
The six-month window for the transfer of further units closed on 31 March
2024. The final number of units acquired was 3,611, resulting in a deferred
consideration payment of JPY 59,794,000 (£320,000).
The additional deferred consideration, in excess of management's estimate
previously accrued (£100,000), has been added to the goodwill balance in the
Group's Statement of Financial Position.
Acquired assets and liabilities
The purchase price allocation, including determination of the fair value of
intangible assets recognised on consolidation, has not been finalised, but is
in progress. Purchase price allocation will be completed by 30 September 2024.
Goodwill has been calculated using the provisional fair values of the assets
and liabilities acquired, with a value of £3,368,000 recognised in the
Group's Statement of Financial Position.
Pending receipt of the final valuations of the assets acquired, in accordance
with IFRS 3, the accounts will be adjusted retrospectively within the
measurement period of no more than one year from the acquisition date.
The initial accounting is incomplete for the following statement of financial
position items: Goodwill, intangible assets and deferred tax liabilities.
15. Events after statement of financial position date
Disposal of Sempa SAS
On 20 May 2024 the Group disposed of its interest in its French subsidiary,
Sempa SAS, for cash consideration of €4,600,000 (£3,936,000). The Group
generated a loss on disposal of £334,000 which will be recognised in other
net gains/losses in the income statement in the Group's full year results.
Pascal Faucher, formerly a director of ME Group subsidiaries KIS SAS and Sempa
SAS, has a 24% interest in the equity of the acquiring company. Therefore,
this transaction is a smaller related-party transaction under LR 11.1.10R of
the FCA Handbook.
Cancellation of Treasury Shares
On 12 July 2024 the Board of the Company passed a resolution to cancel all of
its 2,368,626 ordinary shares of 0.5 p each held in treasury. The cancellation
took place on the same date. These shares held in treasury were purchased via
the previously announced buyback at an average price of 133.17 pence per
ordinary share.
Following such cancellation, the total issued share capital comprises
376,586,253 ordinary shares of 0.5p each and the total number of voting rights
is 376,586,253.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEARLY
FINANCIAL REPORT
The Directors of the Company each confirms that to the best of his or her
knowledge:
· The condensed set of financial statements has been prepared in
accordance with UK-adopted IAS 34 'Interim Financial Reporting';
· The Interim Management Report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period and any changes in
the related party transactions described in the last annual report that could
do so.
The Directors of the Company and their respective functions are set out on
page 71 of the Company's Annual Report 2023.
By order of the Board
Sir John Lewis OBE (Non-executive Chairman)
Serge Crasnianski (Chief Executive Officer and Deputy Chairman)
12 July 2024
INDEPENDENT REVIEW REPORT
We have been engaged by Me Group International PLC ("the Company") to review
the financial information for the six months ended 30th April 2024 which
comprises the Group Condensed Statement of Comprehensive Income, the Group
Condensed Statement of Financial Position, the Group Condensed Statement of
Cash Flows and the Group Condensed Statement of Changes in Equity and the
related explanatory notes. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing
Practices Board and our Engagement Letter dated 11th June 2024. Our work has
been undertaken so that we might state to the Company those matters we are
required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Responsibilities of directors
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', in
accordance with Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority which requires that the interim report
must be prepared and presented in a form consistent with that which will be
adopted in the company's annual accounts having regard to the accounting
standards applicable to such annual accounts.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Responsibilities of auditors
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed financial information in the interim report does
not give a true and fair view of the financial position of the Company as at
30th April 2024 and of its financial performance and its cash flows for the
six months then ended, in accordance with International Accounting Standard
34, 'Interim Financial Reporting and Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Signed:
Forvis Mazars LLP
Chartered Accountants
30 Old Bailey
London
EC4M 7AU
Date:
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