REG - ME Group Intl. - Preliminary Results
22/02/2024 07:00
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RNS Number : 0129E ME Group International PLC 22 February 2024
22 February 2024
ME GROUP INTERNATIONAL PLC
("Me Group" or "the Group" or "the Company")
Preliminary results for the 12 months ended 31 October 2023
A year of record financial performance
ME Group International plc (LSE: MEGP), the instant-service equipment group,
announces its unaudited preliminary results for the 12 months ended 31 October
2023 ("FY 2023" or the "Period").
KEY FINANCIALS
12 months ended 12 months ended Change
31 October 2023
31 October 2022
Revenue £297.7m £259.8m +14.6%
EBITDA(1) £106.6m £92.2m +15.6%
Profit before tax £67.1m £53.4m +25.7%
Profit after tax £50.7m £38.8m +30.7%
Cash generated from operations £103.7m £87.9m +18.0%
Gross cash £111.1m £136.2m +18.4%
Net cash(2) £33.9m £34.0m +0.3%
Earnings per share (diluted) 13.31p 10.23p +30.1%
Dividends:
- Interim Dividend per ordinary share (declared) 2.97p 2.60p n/a
- Special Dividend per ordinary share (paid) - 7.10p n/a
- Final Dividend per ordinary share (recommended) 4.42p 3.00p n/a
Total dividend per ordinary share(3/4) 7.39p 12.70p n/a
( )
(1 ) EBITDA is profit before depreciation, amortisation, other net gains /
(losses) and finance cost and income.
(2) Net cash excludes investments in convertible bonds (£4.7m) and lease
liabilities (£13.3 million). See note 8 for details of net cash.
(3) Interim Dividend paid on 23 November 2023 (£11.2 million). Recommended
Final Dividend will be paid on 10 May 2024, subject to approval at the AGM
(4 ) The total dividend per ordinary share of 12.70p in respect of FY 2022
included special dividends totalling 7.10p per share (£26.8 million).
HIGHLIGHTS
· A year of record financial performance.
· Next-generation photobooth rollout underway, modernising and
digitalising photobooth estate
· Market leader in Japan, following photobooth acquisition
· Continued expansion of laundry operations
· Creation of further shareholder value through dividends and share
buyback programme
· Return to the FTSE 250 Index on the London Stock Exchange
Serge Crasnianski, CEO & Deputy Chairman, commented:
"We are pleased to report a year of record financial performance during which
we continued to make good strides in delivering on our long-term growth
strategy. We have reported strong revenue and profit growth across all of our
business areas and geographic regions, achieved despite the widely reported
macroeconomic challenges. Our laundry operations, a key growth driver for the
Group, performed particularly strongly and our expansion continued at pace.
Demand for photobooth services remains robust and we continue to develop our
relationships with governments and regulatory bodies for our digital and
secure photo ID services.
"The modernisation and digitalisation of our business will drive operational
efficiencies and improve the services and experience we offer. Our
next-generation photobooth is being rolled out at pace, bringing a
multi-service offering and seamless user experience, backed by proprietary
software. This is just one of many initiatives we are driving forward,
underpinned by our strategic focus on digital innovation. We are also working
on a range of additional service features and functionalities that could
attract more consumers to use our instant vending equipment.
"The Board looks ahead to the future with confidence and, notwithstanding
changes in the macro environment, expects the Group to build on the success of
FY 2023 and achieve continued revenue and earnings growth in FY 2024."
PUBLICATION OF ANNUAL REPORT AND ACCOUNTS
ME Group International plc will publish its annual report and accounts for the
financial year ended
31 October 2023 (the "Annual Report") by 29 February 2024. The Annual Report
shall be available on the Company's website at www.me-group.com
(http://www.me-group.com) .
The Annual Report will be posted to those shareholders who have not chosen to
receive electronic communication or communication through the Company's
website.
A copy of the Annual Report will also be submitted to the National Storage
Mechanism and will be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
ENQUIRIES:
ME Group International plc +44 (0) 1372 453 399
Serge Crasnianski, CEO
Stéphane Gibon, CFO
Hudson Sandler +44 (0) 20 7796 4133
Wendy Baker / Nick Moore 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
2023 Overview
I am pleased to report that the Group delivered a record financial performance
in FY 2023, with strong growth delivered against the prior year, particularly
across the Group's core Photobooth and Laundry operations. This reflected the
positive trading momentum achieved throughout the year with growth achieved
across all of ME Group's key business areas and key territories, with activity
supported by strong consumer demand for our automated services.
For the 12 months ended 31 October 2023, the Group delivered robust revenue
growth of 14.6%, EBITDA growth of 15.6% and a 25.7% increase in profit before
tax. In FY 2023, Group EBITDA also surpassed £100 million for the first time,
reaching £106.6 million, with profit before tax increasing by £13.7 million
to £67.1 million, reflecting the Group's focus on delivering growth
profitably across its global vending estate.
Today, ME Group has a dominant market position in most of the markets in which
it operates, with its long-term customer contracts supporting good
predictability and visibility on its revenue streams. The Group's operations
are highly cash-generative, with these cash flows used to fund growth through
product innovation and expansion, and in turn driving value to our
shareholders through growth and dividends.
Strategic progress
We have continued to make good progress against our growth strategy. Our
technological innovation expertise is supporting the diversification of our
product portfolio and the Group's digital transformation, as we modernise our
vending estate and our organisation. This underpins our continued focus on
expanding the number of units in operation and increasing the yield per unit,
while reducing production and operational costs to the Group. This enables us
to capitalise on the Group's operating leverage.
Our growth strategy is focused on five core pillars:
1. Expansion into new geographic territories
2. Entering new market segments
3. Ongoing new product and technology innovation
4. Continued expansion and diversification of services and
revenue growth
5. Merger & Acquisition
Progress was achieved across these pillars, notably with the deployment of our
next generation photobooth, integrated with our newly developed proprietary
software. We also cemented our presence in the Japanese photobooth market,
positioning the Group as market leader in the country, following our
photobooth acquisition. Further details on our progress are set out in the
Chief Executive's Report.
We continue to explore a plethora of potential opportunities that will help us
to meet our growth ambitions and we remain confident in the Group's ability to
achieve these and drive attractive levels of returns for our shareholders.
Entry into the FTSE 250 Index
In June, we were delighted to be informed that the Group had been included
as a constituent of the FTSE 250 Index, following a review by global index
provider FTSE Russell. Our return to the FTSE 250 marked an important
corporate milestone demonstrating the journey that the Group has been on to
expand and diversify its operations through technological innovation.
The Board & Executive Team
Post period-end, on 2 November 2023, we announced that Jean-Marc Janailhac who
had been an Executive Director of the Company since July 2020, would be
stepping down from his executive role and replaced by Christian Autié who was
appointed COO. We are delighted however that Jean-Marc continues to sit on the
Board this time in his original capacity as a Non-executive Director. I would
like to take this opportunity to thank him for his valuable contribution to
the Company as an Executive Director and I am pleased he will continue to work
closely with me and the Board in his previous role.
The Board of Directors continues to believe that it has a strong team in place
to continue supporting the leadership team in delivering on the Group's
long-term growth strategy.
I would like to thank my Board colleagues, the executive team, and every
employee across the Group for their continued dedication, commitment, and hard
work.
Shareholder returns and dividend
Share buyback
As a Group, we are committed to creating shareholder value wherever we can and
as a Board we look to explore opportunities that reward our shareholders. In
August, we announced the launch of a Share Buyback Programme to run until the
Company's next Annual General Meeting. As at 31 October 2023 the Company held
1,260,534 shares, with an average value of 156p per share, at a cost of
£1,969,000. It is the aim that the Buyback Programme will reduce the
Company's share capital and in turn drive an increase in the earnings per
share and consequently the yield for all shareholders.
Dividends
Under the Company's current distribution policy, it will look to pay annual
dividends in excess of 55% of its annual profits after tax, subject to market
and capital requirements. This total will be split between interim dividends
(1/3) (generally to be paid in the month of November) and final dividends
(2/3) (generally to be paid in the month of May).
The Board declared an interim dividend for the six months ended 30 April 2023
of 2.97 pence per Ordinary share (the "Interim Dividend"), which amounted to
£11.2 million, paid to shareholders on 23 November 2023 to shareholders on
the register on 3 November 2023.
The Board has recommended a final dividend for the year ended 31 October 2023
of 4.42 pence per Ordinary share ("Final Dividend") amounting to £16.6
million. Combined with the Interim Dividend, this brings the total dividend
for the year ended 31 October 2023 to 7.39 pence per Ordinary share (£27.9
million).
Subject to approval at the Company's annual general meeting on 26 April 2024,
the Final Dividend will be paid on 23 May 2024 to shareholders listed on the
register at the close of business on 26 April 2024. The ex-dividend date will
be 25 April 2024.
Sustainability
We remain committed to strengthening our sustainability activity to deliver
our goals through inventing eco-responsible local services to support growth
by integrating social, environmental, and economic expectations into our
strategy and operations. Details of our Sustainability approach and KPIs are
available on the Group's website at me-group.com.
Looking ahead
Laundry is a key part of our growth strategy and we continue to invest to
expand our portfolio and build on new and existing partnerships, to further
extend our convenient laundry services in high footfall destinations. We are
also improving the user experience, through the launch of our consumer App for
our laundry services, which delivers better marketing insight. In the year
ahead, we plan to install an average of 80-90 Revolution laundry machine per
month, with a particular focus on expansion in France and the United
Kingdom.
The photobooth market remains robust, and even though it is a mature market,
turnover and the number of transactions has stayed stable from year-to-year.
Within the Group, 70% of the photobooth market is based on the requirement for
official photos (driving licences, passports, ID photos, etc.), unofficial
photos (universities, schools, sports clubs etc.) and, to a lesser extent, fun
products.
The Group does not foresee a drop in demand for official photos in the short-
or medium-term. The Group is securing this market as much as possible by
developing agreements with administrations and regulatory bodies (ANTS in
France, HMPO in the UK and MY NUMBER in Japan) and by trying to replicate this
same model in other countries and by extending it to all official needs
(passports, identity cards and driving licences). The demand for official
photos is helped by the continual introduction of new legislation (for
example, the compulsory renewal of 'old pink driving licences' in France and
the My Number campaign in Japan).
At the same time, the Group is working on a range of additional, more
entertaining offers in photobooths that could attract other consumers.
The Group has proven to be resilient, despite the ongoing macroeconomic
headwinds. It remains highly cash generative, and our financial position
remains strong, driven by good trading momentum across the business. This
supports the Board's confidence in the Company's ability to make further
strategic progress in FY 2024 and beyond.
The Board expects the Group to achieve continued revenue and earnings growth
in the financial year ahead, building on the success of FY 2023, subject to
any major changes to the macroeconomic environment.
Sir John Lewis OBE
Non-executive Chairman
22 February 2024
CHIEF EXECUTIVE'S REPORT
BUSINESS REVIEW
We are pleased to report a record financial performance in FY 2023. Photo.ME
and Wash.ME have continued to drive the overall Group performance as photo ID
and laundry services remain in high demand across our key territories, and the
Group continued to deliver against its long-term growth strategy.
Our continued focus on technological innovation and diversification,
underpinned by our in-house R&D capabilities, enables us to meet the needs
of end-users internationally. This, alongside the global footprint of our
operations, well positions us on the international stage as a leading operator
in instant service vending.
Financial performance
Total revenue increased by 14.6% to £297.7 million (2022: £259.8 million),
with strong growth delivered in each of our geographic regions.
By geography, our largest region, Continental Europe, reported revenue growth
of 15.4%, due to a continued strong performance in France. In the UK &
Republic of Ireland, revenue was up 14.8%, and in Asia Pacific operating
revenue was up 11.0%.
Each of our principal business areas delivered operating revenue growth
year-on-year compared with the same period in FY 2022. Our laundry operations
performed particularly strongly, up 32.0%, photobooth operations grew by
11.8%, digital printing by 5.6% and Other Vending Equipment and Feed.ME
operating revenue was up 30.8% on FY 2022.
As a result of the above, EBITDA (excluding associates) was £106.6 million,
an increase of 15.6%, which delivered an EBITDA margin of 35.8%. Reported
profit before tax was up 25.7% to £67.1 million (2022: £53.4 million), with
all regions reporting growth.
The Group's corporation tax charge for the year was £16.4 million, resulting
in an effective tax rate of 24.4%. Tax charge for the prior year was £14.6
million, an effective tax rate of 27.4%.
Capital expenditure was £53.5 million, primarily related to laundry (£24.7
million), photobooths (£8.9 million), kiosks (£3.1 million), plant,
machinery and vehicles (£6.3 million) and the acquisition of a photobooth
business in Japan (£4.8 million).
The Group remains well capitalised and in a strong financial position, with
net cash of approximately £33.9 million.
During the year ended 31 October 2023, the Group repurchased 1,260,534 of its
ordinary shares and also paid dividends totalling £23.4 million (comprising
the interim dividend for 2022 of £9.8 million, the final dividend for 2022 of
£11.3 million and a special dividend for 2022 of £2.3 million). In November
2023, the Company paid its announced interim dividend for 2023, totalling
£11.2 million.
Further details of the Group's performance by business area and geographic
region are set out below.
Overview of principal business areas
Below is an overview of the Group's four principal business areas: photobooth
(Photo.ME), digital printing (Print.ME), laundry (Wash.ME) and food (Feed.ME).
In addition, the Group operates Other Vending Equipment.
Photo.ME - Photobooths and secure integrated biometric photo ID solutions
12 months ended 12 months ended
31 October 2023
31 October 2022
Number of units in operation 30,762 27,625
Percentage of total group vending estate (number of units) 64.7% 62.9%
Revenue £172.5m £154.3m
Capex £8.9m £3.0m
EBITDA £61.8m £54.2m
Our photobooth operations, our largest business area by number of units,
revenue and EBITDA contribution, continued to perform strongly throughout the
financial year.
Revenue increased by 11.8% to £172.5 million (2022: £154.3 million). This
performance was supported by continued demand of official photo ID, the
continued expansion of the estate both organically and through acquisition,
and annualised benefits of FY 2022 price increases implemented in certain
locations, particularly France, Germany and Austria. The average revenue per
machine (excluding VAT) increased to £5,908 per year (2022: £5,586 per
year).
Subsequently, EBITDA was up 14.0% at £61.8 million and represented 58.0% of
total Group EBITDA. EBITDA was 35.8% of photobooth revenue during the Period.
Capex increased from £3 million to £8.9 million, reflecting investment in
the rollout of next generation photobooths, with 547 installed in France and
Germany in FY 2023. While deployment of the machines was slower than initially
expected, due to supplier delays, these short-term challenges have been
resolved. At the year-end we were installing approximately 180 next-generation
units per month. In addition, a programme to upgrade our existing photobooth
estate with new proprietary software and functionalities is underway.
At 31 October 2023, the number of photobooths in operation was 30,762, an
11.4% increase on the prior year (2022: 27,625), reflecting the ongoing
expansion programme as we continue to rollout units in existing and new
territories. This represents 64.7% of the Group's total vending units.
Growth strategy and progress
We believe that there are a number of long-term growth drivers in place which
underpin our continued expansion. Demand for photo ID for the use in official
documentation, including driving licences and passports, Government
requirements for digitalised photo ID and security to combat fraud, and
consumers increasingly requesting multi-functional instant services are all
factors underpinning the continued growth of Photo.ME. There continues to be a
compelling case for the Group to grow its photobooth business and benefit from
industry trends and widespread consumer demand.
Our next-generation photobooth was developed by the Group's in-house R&D
team and offers range of new functionalities, focused around enhancing the
user experience. These new features include 'Mobile to Print', user
personalisation services using AI and photo filters. The Group expects other
new functions will be added over time. The Group aims to install 3,000
next-generation machines in FY 2024, and approximately 8,000 next-generation
photobooths by the end of FY 2025.
At the same time, the Group is modernising the hardware of its existing
photobooth estate and intends to install its new proprietary software at a
rate of around 200 machines per month. This proprietary software enables the
Group's engineers to quickly and cost-effectively upgrade each machine,
remotely rather than needing to physically visit the machines.
In October 2023, the Company's Japanese subsidiary, ME Group Japan K.K.,
acquired the automated-photobooth business owned and operated by two
subsidiaries of FUJIFILM Corporation (formerly FUJIFILM Co., Ltd) in Japan for
an initial consideration of £4.8 million (Japanese Yen 873 million), funded
by a local loan facility. This added 3,548 traditional photobooths, located in
high-footfall locations such as travel hubs and shopping centres throughout
Japan, delivering official photo ID for consumers, including for the
government's social security and taxation photo ID card scheme. The acquired
photobooths were fully integrated into the Group's operations in Japan in
October 2023 and will benefit from operational synergies under the Group's
ownership. Further details of the Japan acquisition are detailed in the Review
of Performance by Geography section.
Following the Group's entry into the Australian market through a small
acquisition in 2021, the Group is trialling 11 photobooths in across Sydney
and Melbourne, as part of our ongoing diversification strategy as we build our
presence in both new and existing markets. Whilst this is at an early stage in
terms of building out the market, the Group is exploring how best to drive
forward expansion and remains excited by the prospects for the Australian
market.
The Board continues to believe that there are longer-term opportunities in the
photo ID market across both existing and new geographic markets.
Planned photobooth investment in FY 2024 is between £15 million and £20
million, with a target return on investment in approximately 18 months.
Wash.ME - Unattended Revolution laundry services and laundrettes
12 months ended 12 months ended
31 October 2023
31 October 2022
Total Laundry units deployed (owned, sold and acquisitions) 6,870 5,924
Total revenue from Laundry operations £81.6m £61.8m
Total Laundry EBITDA £39.5m £29.1m
Revolution
- Number of Revolutions in operation 5,533 4,754
- Percentage of total group vending estate (number of units) 11.6% 10.8%
- Total revenue from Revolutions £76.1m £56.7m
- Revolution capex £24.7m £20.2m
Total revenue from our laundry operations grew by 32.0% to £81.6 million as
we continued to expand our estate of Revolution laundry units, generating a
higher level of turnover from this business. At 31 October 2023, the total
number of laundry units deployed (owned, sold) was up 16.0% to 6,870. Total
laundry EBITDA increase by 35.7% to £39.5 million.
Growth of Revolution laundry operations
The total number of Revolution units in operation grew 16.4% to 5,533, as the
Group continued to roll out new machines at a rate of 65 per month, with more
than 780 machines installed during the year. Revolution laundry machines
accounted for 11.6% of the Group's total estate by number of machines (2022:
10.8%).
Revenue increased by 34.2% to £76.1 million, which represented 25.6% of Group
revenue, driven by a combination of higher demand and more machines in
operation. The average revenue per machine (excluding VAT) was £14,793 per
year (2022: £12,816 per year).
EBITDA was £39.5 million and contributed 37.1% of Group EBITDA. EBITDA from
Revolution was 48.4% of revenue.
Wash.ME remains our fastest growing and highest margin business area and we
continued to invest to deliver our expansion plans. As a result, Revolution
capex increased to £24.7 million (2022: £20.2 million) reflecting the
continued rollout of units across our core territories. Furthermore, the Group
has entered a period of machine refurbishment and maintenance, the first since
laundry operations were launched in 2012.
Growth strategy and progress
A key part of our growth strategy for the laundry business is expanding
operations through new and existing partners in target territories, as a means
of meeting consumer demand by offering convenient, competitively priced and
high-capacity laundry services. We announced a new strategic partnership with
leading supermarket chain Co-op, in the UK, to position Revolution units at
sites in selected parts of the country. The partnership will allow us to
position laundry services at an increasing number of high footfall locations
across the UK, offering convenient laundry services to consumers at those
sites. We see this as a mutually beneficial relationship where we build a
destination for consumers looking for high-capacity laundry facilities while
shopping.
As well as entering new market segments through strategic partnerships, the
Group continues to deliver innovative solutions to drive forward the service
offering available under Wash.ME. Alternative machine formats continue to
prove popular with different types of users. We see good potential for our
'Flex' units, a compact format that can fit into smaller spaces, and believe
there to be a long-term opportunity to address the domestic market and at-home
laundry needs. Whilst this is at an early stage, we will continue to monitor
the opportunity and update in due course.
In June, the Group began rolling out a new consumer App aimed at laundry
services as a means of improving the user experience as well as providing
better marketing insights on the Group's end-consumers. It remains a focus for
us to improve the App and work towards rolling this out more widely across our
operations.
The Group plans to install an average of 80-90 laundry machines per month in
FY 2024. In addition, photovoltaic solar panels on being installed on
Revolution laundry machines rollout across key territories, including France
and the United Kingdom.
Planned laundry investment in FY 2024 will be £22.0 million to £30.0
million, with a with a target return on investment in approximately 18 months.
Print.ME - High-quality digital printing services
12 months ended 12 months ended
31 October 2023
31 October 2022
Number of units in operation 4,734 4,785
Percentage of total group vending estate (number of units) 10.0% 10.9%
Revenue £11.3m £10.7m
Capex £3.1m £1.3m
EBITDA £4.2m £3.6m
Our estate of digital printing kiosks offers a wide range of competitively
priced print formats and personalised products. Our key markets are France,
where most machines are situated, the UK and Switzerland.
At 31 October 2023 the Group had 4,734 kiosks in operation, a reduction of
1.1% compared with the prior year. These accounted for 10.0% of the total
number of vending units in operation.
Revenue increased to £11.3 million from £10.7 million in the prior year,
reflecting increased demand from new digital kiosks, replacing 413 old
machines. Revenue represented 4.1% of Group revenue.
The average revenue per machine (excluding VAT) was £2,374 per year (2022:
£2,279).
EBITDA was £4.2 million which represented 3.9% of Group EBITDA. EBITDA was
37.2% of Print.ME revenue in the period.
Capex was £3.1 million, a significant increase on the prior year reflecting
an investment programme to replace some existing machines, and deployment of
500 new kiosks.
Growth strategy and progress
In recent years, we have focused more investment towards the Print.ME business
as demand for high-quality digital printing services remains robust. This,
paired with the increasing use of smartphones and demand for social media
sharing, presents a long-term opportunity for our digital printing services.
The Group is forecasting c.£3.0 million of capex in FY 2024. As part of the
growth strategy for this business area, the Group continues to explore
opportunities to extend the services offered through its wider vending estate
including digital printing services. Our next-generation photobooths,
currently being deployed, offers this functionality as part of the
multi-service offering.
Feed.ME - Vending equipment for the food service market
Feed.ME activities are focused on two areas, self-service fresh fruit juice
equipment market and pizza vending machines aimed at the B2B retail and
hospitality markets. The Group currently has operations in Belgium, France,
Japan and Switzerland.
The Feed.ME business model is primarily based on the sale of vending
equipment. Customers frequently, but under no obligation, sell the vending
equipment back to the Group at a later date. The equipment is then refurbished
and re-sold, generating repeat revenue for the Group.
The Group also sells maintenance agreements, under which it services vending
equipment for an agreed period of time.
Technical adjustments to our pizza vending machine led the Group to move
manufacture of this machine in-house during the commercialisation phase. This
enabled us to increase production to 30 machines per month and ensures that
our R&D team are on hand to support and have oversight of quality control
and cost efficiencies.
On a smaller scale, the Group operates fruit juice machines in Japan. During
the year we reinstated our B2B vending operations aimed at end markets such as
the hospitality sector. At 31 October 2023, the Group had 441 freshly
squeezed-orange-juice vending machines in operation, which includes fulfilment
of the oranges for the machines.
Revenue from the sale of equipment, consumables and services was £8.9
million. Combined with other revenue (£4.6 million), the total revenue of
Feed.ME was £13.5 million (2022: £12.5 million). This business area
contributed 4.5% of total Group revenue.
A review following the technical issues experienced with the pizza machines,
which have slowed progress in this business area, has resulted in an
impairment of goodwill and intangibles of £2.6 million related to the
acquisition of the pizza vending machine manufacturer (Resto'Clock) in 2021.
The group will continue to sell pizza vending equipment, with the target of
relaunching this division and improving profitability.
EBITDA was £3.8 million and contributed 3.6 % of Group EBITDA.
Growth strategy and progress
The food service sector remains an attractive proposition for the Group. We
remain focused on growing our fruit juice vending machine operations in Japan
and we plan to increase the production of our pizza vending machines, with the
aim of selling more than 15 per month.
The Group's aim is to become the food vending equipment market leader in
Europe.
Other vending equipment
At 31 October 2023, the Group operated 6,055 (2022: 6,483) other vending units
in addition to its four principal business areas. These included 2,356
children's rides (Amuse.ME), 3,374 photocopiers (Copy.ME) and 325 other
miscellaneous machines.
These machines are typically located in high-footfall locations alongside the
Group's principal activities, thereby benefiting from existing site owner
relationships and operating synergies. Amuse.ME units are mostly situated in
the United Kingdom and the Netherlands. Copy.ME units are mostly situated in
France. The Group will continue to operate other vending units where
profitable.
Other vending equipment accounted for 13.6% of the Group's total vending
estate by number of units, down 1.7% compared with the previous year and
represented 4.0% of the total Group revenue.
Growth Strategy In Action
Our growth strategy is centred on five key pillars to support the development
of the Group's principal business areas: photobooths, laundry services,
digital printing and food vending equipment.
We are pleased to have made solid progress against our five-year plan to 2027,
driving forward a number of initiatives as part of this mid-term roadmap.
Below we are pleased to outline progress in FY 2023 on delivery of our growth
strategy against each of the five key pillars aimed at supporting the
development of the Group's principal business areas.
1. Expansion into new geographic territories
Continue to build the Group's international presence in recently entered
markets of Italy, Finland and Australia.
Progress in FY 2023
The Group has continued to drive expansion of operations in new geographic
territories. In Australia, we have around 11 photobooths installed across
Sydney and Melbourne, our pilot cities. Whilst expansion in Australia remains
at an early test phase, we continue to look at how we can best grow our
operations and believe there is a significant opportunity in the region.
2. Entering new market segments
Through securing new partnerships with businesses such as supermarkets and
smaller retailers.
Progress in FY 2023
Our partners and site owners remain a valuable route for us to grow our
business by entering new market segments. We launched new partnerships with
Co-op and Morrisons, two major supermarket chains in the UK, enabling us to
offer conveniently accessible laundry services to consumers at those sites.
3. Ongoing new product and technology innovation
To meet the vending needs of consumers through state-of-the-art user
experience, backed by the best technology, and an omnichannel approach.
Progress in FY 2023
The Group is well underway with the deployment of modernisation software
across its photobooth estate. This new proprietary software provides us with
the ability to deploy new functionality and services, as well as update
interfaces, remotely. Further details are disclosed further down in this
report.
4. Continued expansion and diversification of services
Revenue growth through a multi-service instant-service offering and
integration of centralised operating systems.
Progress in FY 2023
The Group has rolled out a number of next generation photobooths,
predominantly across France, as part of our strategy to introduce a
multi-service offering across its operations. Machines are being installed at
a rate of around 180 per month with ambitions to increase to 250 new
installations per month during 2024.
5. Merger and acquisition strategy
Focused on enabling our growth strategy through bolt-on acquisitions, which
meet the Group's return-on-investment criteria, to extend our geographic
footprint, consolidate our market position and increase the breadth of our
services available through our machine network.
Progress in FY 2023
In October our Japanese subsidiary, ME Group Japan K.K., completed the
acquisition of the automated-photobooth business from FUJIFILM Corporation.
The acquired photobooths have been fully integrated into the Group's
operations, benefitting from wider operational synergies, and consequently the
Group is positioned as a market leader for photobooths across Japan.
Innovation and Diversification
Continuous technological innovation and diversification of operations are
central to the Group's growth strategy, driven by our dedicated 50-strong
R&D team, most of whom work at our primary R&D facility in France.
We are continually looking at ways to create or evolve service offerings
through our vending estate that meet the changing needs of consumers both
across our existing and new markets. Our in-house team develops and tests new
technologies, products, and functionality before these enter the
commercialisation phase and are deployed within our vending estate.
In recent years, innovation has been primarily focused on key initiatives to
digitally transform the Group, improve operational efficiencies and enhance
the end-user experience.
1. A state-of-the-art user experience, backed by the best technology
· Design of new, intuitive, and modern user interfaces across
product categories
· Integration of digital payment systems
· Up-to-date functionalities, through an aggregate of the best of
external technology providers
2. An omnichannel approach, leveraging digital functionalities to enhance user experience of our brands and explore new business models
· Use of a powerful CRM which offers a customised experience to end
users
· Launch of applications that connect to our machines to offer
mobile-to-machine features
· Remote management of our self-service vending equipment through
a cloud-based infrastructure
· Multi-service functionality for the next-generation machines.
Centralised operating system offering operational efficiencies and a seamless,
connected user experience for the consumer
This digital transformation through the modernisation and modularisation of
our vending estate will enable the Group to be more agile and operationally
efficient. It will support the swift deployment of software upgrades and new
services across our machine estate, whilst also enabling us to enhance
consumer engagement through targeted marketing campaigns.
Innovation in action
New proprietary software
Our new proprietary software developed by the in-house R&D team is at the
centre of the Group's digital transformation, which is initially being rolled
out for photobooths. This software is fitted as standard on all
next-generation photobooths being installed and, over the coming years, the
Group aims to retrofit this software across its existing photobooth estate.
At the touch of a button, the Group will be able to remotely run a software
upgrade for each photobooth, giving it the ability to deploy new functionality
and services quickly and cost-effectively.. It will allow the Group to
remotely update the consumer interface and enhance the end-user experience.
Previously, software updates were implemented manually by an engineer on site.
Enhanced user experience
Our next-generation photobooth offers a redesigned user experience (UI and UX)
to support greater digital functionality. This includes visual enhancements to
the user interface as well as a more efficient consumer interaction, such as a
reduction in the number of clicks required during user interaction.
Additionally, users will be able to provide feedback on their experience via a
QR code on each machine.
Ongoing digitalisation driving operational efficiencies
We are currently working to develop several new initiatives to centralise
back-office processes aimed at driving operational efficiencies. These
include:
· A new application for field engineers offering centralised route
planning
· Real-time telematics to monitor the operational performance of
each machine and reduce downtime
· A new CRM tools to support the Group's sales team function, due
to go live by the end of 2024
· Applications to enhance engagement with end user and support
marketing campaigns, with new store locator launched in June 2024
· Launch of end-user App in the first half of 2024
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. Some commentary below relates to the performance
of specific products in the relevant geographies.
Vending units in operations
At October 2023 At October 2022
Number % of total Number % of total
of units estate of units estate
Continental Europe 26,232 55.1% 25,331 57.7%
UK & Republic of Ireland 6,297 13.2% 6,858 15.6%
Asia Pacific 15,037 31.6% 11,721 26.7%
Total 47,566 100% 43,910 100%
The total number of vending units in operation at 31 October 2023 increased by
8.3% to 47,566 (2022: 43,910), mainly due to the acquisition of a photobooth
business in Japan, which was completed in September 2023.
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.
Revenue by geographic region
12 months ended 12 months ended
31 October 2023
31 October 2022
Continental Europe £205.2m £177.8m
UK & Republic of Ireland £48.2m £42.0m
Asia Pacific £44.3m £39.9m
Total £297.7m £259.7m
Operating profit by geographic region
12 months ended 12 months ended
31 October 2023
31 October 2022
Continental Europe £62.6m £51.3m
UK & Republic of Ireland £12.4m £11.6m
Asia Pacific £4.3m £2.0m
Corporate costs £(11.8)m £(8.1)m
Total £67.5m £56.8m
Total revenue increased by 14.6% to £297.7 million, reflecting the strong
year-on-year performance in all three geographic areas from higher consumer
demand for the Group's instant-service machines and, to a lesser extent, the
year-on-year benefit of end consumer pricing rises implemented during 2022.
Continental Europe
Continental Europe is the Group's largest region by both number of machines
and contribution to Group revenue.
Revenue increased 15.4% to £205.2 million (2022: £177.8 million), reflecting
a strong performance and revenue growth across all business areas, notably
laundry and photobooth operations.
Total operating revenue increased by 18.7% year-on-year, primarily driven by
Wash.ME, which grew by 28.2% and Photo.ME, which grew by 16.1%. Wash.ME
delivered consistent quarter-on-quarter growth reflecting continued expansion
of operations, with a further 779 laundry units deployed, of which 491 were
installed in France. Photobooth operations benefited from higher consumer
demand and the rollout of 547 next-generation photobooths, alongside consumer
price increases implemented across France (from €6 to €8) and Germany
(€8 to €10) during FY 2022. The Group's other business areas saw strongest
year-on-year revenue growth in Q1 2023 and Q2 2023, which reflects the
recovery of operations in FY 2023 compared with FY 2022 which was still
impacted by the pandemic.
Operating profit grew significantly to £62.6 million, an increase of 22.0%.
At 31 October 2023, 26,232 units were in operation in Continental Europe which
represented 55.1% of the Group's total estate. Continental Europe contributed
68.9% of total Group revenue.
UK & Republic of Ireland
Revenue grew by 14.8% to £48.2 million, reflecting further expansion in the
number of laundry units and demand for laundry services, with Wash.ME
operating revenue up 45.7%. Photo.ME operating revenue was up 2.2%, and Other
Vending and Feed.ME operations were up 5.8%.
In the UK and Republic of Ireland, the Group has strategic relationships in
retail sectors, leading shopping centres, supermarkets and forecourts. We have
over 3,000 photobooths and 1,300 laundry units sited across this region with
key partners including Tesco, Morrisions, Co-op, Musgraves, BWG, Circle K and
Applegreen. The Group remains focused on growing its vending estate within
these key accounts, which will provide it with the opportunity to continue
building market share in the UK & Republic of Ireland.
Operating profit grew by 6.9% to £12.4 million (2022: £11.6 million).
As at 31 October 2023, there were 6,297 units in operation in the UK &
Republic of Ireland, a decrease of 8.2%, due to the loss of two key accounts
in 2023. This segment represented 13.2% of the Group's total vending estate.
Asia Pacific
Revenue increased by 11.0% to £44.3 million, driven by a 5.4% increase in
photobooth operating revenue, and a 53.5% in revenue from Other Vending and
Feed.ME operations which mainly related to the successful expansion of freshly
squeezed orange juice vending operations in Japan. Asia Pacific continues to
be the only market in which the Group operates fresh fruit juice vending
machines, with 441 orange juice machines installed by 31 October 2023.
Operating profit in the region more than doubled to £4.3 million (2022: £2.0
million).
As set out above, the Group acquired 3,548 photobooths in Japan at the end of
the financial year for £4.8 million. As a consequence, the Group became the
market-leading photobooth operator in the Japanese market. To date, this
acquisition has performed in line with expectations and is expected to
increase Asia Pacific revenue by 20% to 30% and to add approximately £2.2
million in profit in FY 2024.
As at 31 October 2023, there were 15,037 units in operation in Asia Pacific,
which represented 31.6% of the Group's total vending estate. The region
contributed 14.9% of total Group revenue.
Serge Crasnianski
Chief Executive Officer & Deputy Chairman
22 February 2024
Key performance Indicators (KPIs)
The Group measures its performance using different types of indicators. The
main objective of these KPIs is to monitor the Group's cash generation,
long-term profitability, preservation of the value of its assets, and of
returns to shareholders.
Description Relevance Performance
12 months ended 12 months ended
31 October
31 October
2023 2022
Total Group revenue at actual rate of exchange £297.7m £259.8m
Group Profit before tax £67.1m £53.4m
Increase in number of photobooths 3,137 (242)
Increase in number of Laundry units (operated) The increase in number of Revolutions is a constant priority and a main driver 779 660
for growth
PRINCIPAL RISKS
As with 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 conditions Economic growth has a major influence on consumer spending. The Group focuses on maintaining the characteristics and affordability of its
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 upcoming elections in both the UK the US) could well consolidation in a cost-effective manner.
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 represent more than 2% of Group The Group continues to monitor the situation in both the French and the
turnover. UK 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 service quality 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
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
GROUP FINANCIAL STATEMENTS
Group Statement of Comprehensive Income
For the 12 months ending 31 October 2023
12 months ended 12 months ended
31 October
31 October
2023 2022
Notes £ '000 £ '000
Revenue 3 297,662 259,780
Cost of Sales (195,017) (178,377)
Gross Profit 102,645 81,403
Other Operating Income 194 7,916
Administrative Expenses (35,351) (32,638)
Share of Post-Tax Profits from Associates 14 -
Operating Profit 67,502 56,681
Other net gains / (losses) 701 (1,176)
Finance Income 1,401 -
Finance Cost (2,537) (2,151)
Profit before Tax 67,067 53,354
Total Tax Charge 4 (16,401) (14,561)
Profit for the year 50,666 38,793
Other Comprehensive Income
Items that are or may subsequently be classified to Profit and Loss:
Exchange Differences Arising on Translation of Foreign Operations 454 829
Total Items that are or may subsequently be classified to profit and loss 454 829
Items that will not be classified to profit and loss:
Remeasurement (losses) / gains in defined benefit obligations and other (220) 1,151
post-employment benefit obligations
Deferred tax on remeasurement losses / (gains) 48 (248)
Total Items that will not be classified to Profit and Loss (172) 903
Other comprehensive income for the year net of tax 282 1,732
Total Comprehensive income for the ear 50,948 40,525
Profit for the Year Attributable to:
Owners of the Parent 50,666 38,793
Non-controlling interests - -
50,666 38,793
Total comprehensive income attributable to:
Owners of the Parent 50,948 40,525
Non-controlling interests - -
50,948 40,525
Earnings per Share
Basic Earnings per Share 6 13.40p 10.26p
Diluted Earnings per Share 6 13.31p 10.23p
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 31 October 2023
31 October 31 October
2023 2022
(restated)
Notes £'000 £'000
Assets
Goodwill 7 18,888 16,320
Other intangible assets 7 13,054 16,435
Property, plant & equipment 7 118,124 101,090
Investment property 7 - 592
Investment in associates 35 21
Financial instruments held at FVTPL 5,886 5,239
Other receivables 3,005 1,973
Non-Current Assets 158,992 141,670
Inventories 32,501 25,491
Trade and other receivables 21,391 20,050
Current tax 7,962 2,990
Cash and cash equivalents 8 111,091 136,185
Current assets 172,945 184,716
Non-Current Assets Classified as Held for Sale 585 -
Total assets 332,522 326,386
Equity
Share capital 1,891 1,889
Share premium 11,083 10,627
Treasury shares (1,969) -
Translation and other reserves 11,958 11,159
Retained earnings 136,025 108,974
Total Shareholders' funds 158,988 132,649
Liabilities
Financial liabilities 8 58,447 82,429
Post-employment benefit obligations 4,063 3,850
Deferred tax liabilities 8,566 7,778
Non-current liabilities 71,076 94,057
Financial liabilities 8 32,063 35,657
Provisions 1,884 1,567
Current tax 10,590 10,208
Trade and other payables 57,921 52,248
Current liabilities 102,458 99,680
Total equity and liabilities 332,522 326,386
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Group Statement of Cash Flows
For the 12 months ending 31 October 2023
12 months ended 12 months ended
31 October
31 October
2023 2022
£'000 £'000
Cash flow from operating activities
Profit before tax 67,067 53,354
Finance costs 1,286 794
Interest of lease liabilities 1,251 1,357
Finance income (1,401) -
Other net (gains) / losses (701) 1,176
Operating profit 67,502 56,681
Amortisation and impairment of intangible assets 6,586 6,772
Depreciation and impairments of property,plant and equipment 32,552 28,791
Loss / (gain) on sale of property, plant and equipment and intangible 555 (7,490)
assets
Exchange differences (129) (594)
Movements in provisions 362 (809)
Other non cash items (33) (432)
Changes in working capital: - -
Inventories (7,010) (7,033)
Trade and other receivables (2,372) 2,295
Trade and other payables 5,673 9,764
Cash generated from operations 103,686 87,945
Net interest paid (1,136) (2,151)
Taxation paid (20,203) (10,895)
Net cash generated from operating activities 82,347 74,899
Cash flows from investing activities -
Acquisition of subsidiaries (4,790) (739)
Proceeds from disposal of subsidiaries 209 152
Purchase of intangible assets (2,813) (2,486)
Proceeds from sale of intangible assets - 71
Purchase of property, plant and equipment (45,842) (32,670)
Proceeds from sale of property, plant and equipment 1,539 8,997
Investment in financial instruments - (4,450)
Net cash utilised in investing activities (51,697) (31,125)
Cash flows from financing activities
Issue of ordinary shares to equity shareholders 458 28
Acquisition of minority interest - (2,985)
Purchase of treasury shares (1,969) -
Repayment of principal of leases (5,857) (6,196)
Repayment of borrowings (30,960) (24,622)
New borrowings drawn 4,817 61,773
Dividends paid to owners of the Parent (23,443) (35,497)
Net cash utilised in financing activities (56,954) (7,499)
Net (decrease) / increase in cash and cash equivalents (26,304) 36,275
Cash and cash equivalents at beginning of year 136,185 99,362
Exchange gain on cash and cash equivalents 1,210 548
Cash and cash equivalents at end of year 111,091 136,185
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Group Statement of Changes in Equity
For the 12 months ending 31 October 2023
Share Share Treasury shares Other Translation Retained Attributable to Non-controlling Total
premium
£'000
reserves
reserve
earnings
owners of the
interests
£'000
capital
£'000
£'000
£'000
Parent
£'000
£'000 £'000
£'000
At 1 November 2021 1,889 10,599 - 1,781 7,654 106,051 127,974 1,720 129,694
Profit for the period - - - - - 38,793 38,793 - 38,793
Other comprehensive income / (expense):
Exchange differences - - - - 840 - 840 (11) 829
Remeasurement gains in defined benefit pension scheme and other post-employment benefit obligations - - - - - 1,151 1,151 - 1,151
Deferred tax on remeasurement gains - - - - - (248) (248) - (248)
Total other comprehensive income / (expense) - - - - 840 903 1,743 (11) 1,732
Total comprehensive income / (expense) - - - - 840 39,696 40,536 (11) 40,525
Transactions with owners of the Parent:
Shares issued in the period - 28 - - - - 28 - 28
Share options - - - 884 - - 884 - 884
Dividends - - - - - (35,497) (35,497) - (35,497)
Acquisition of minority - - - - - (1,276) (1,276) (1,709) (2,985)
Total transactions with owners of the Parent - 28 - 884 - (36,773) (35,861) (1,709) (37,570)
At 31 October 2022 1,889 10,627 - 2,665 8,494 108,974 132,649 - 132,649
At 1 November 2022 1,889 10,627 - 2,665 8,494 108,974 132,649 - 132,649
Profit for the period - - - - - 50,666 50,666 - 50,666
Other comprehensive income / (expense):
Exchange differences - - - - 454 - 454 - 454
Remeasurement losses in defined benefit pension scheme and other post-employment benefit obligations - - - - - (220) (220) - (220)
Deferred tax on remeasurement losses - - - - - 48 48 - 48
Total other comprehensive income / (expense) - - - - 454 (172) 282 - 282
Total comprehensive income - - - - 454 50,494 50,948 - 50,948
Transactions with owners of the Parent:
Shares issued in the period 2 456 - - - - 458 - 458
Purchase of treasury shares - - (1,969) - - - (1,969) - (1,969)
Share options - - - 345 - - 345 - 345
Dividends - - - - - (23,443) (23,443) - (23,443)
Total transactions with owners of the Parent 2 456 (1,969) 345 - (23,443) (24,609) - (24,609)
At 31 October 2023 1,891 11,083 (1,969) 3,010 8,948 136,025 158,988 - 158,988
The accompanying notes form an integral part of these condensed consolidated
financial statements.
NOTES
1. General information
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.
Abridged financial information
The financial information in this announcement, which was approved by the
Board of Directors, does not constitute the Company's statutory accounts for
the years ended 31 October 2023 or 31 October 2022. The financial information
for 2022 is derived from the statutory accounts for that year, which have been
delivered to the Registrar of Companies. The auditors have reported on those
accounts; their report was unqualified, did not draw attention to any matters
by way of emphasis and did not contain statements under s498(2) or (3)
Companies Act 2006.
The audit of the statutory accounts for the year ended 31 October 2023 is
substantially complete, with only a number of minor procedural matters
outstanding. These accounts will be finalised on the basis of the financial
information presented by the directors in this results announcement and will
be delivered to the Registrar of Companies following the Company's annual
general meeting.
2. Basis of preparation and accounting policies
This preliminary announcement has been prepared in accordance with UK-adopted
international accounting standards ("IFRS") and in conformity with the
requirements of the Companies Act 2006.
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with IFRS, this announcement does not itself
contain sufficient information to comply with IFRS. This preliminary
announcement constitutes a dissemination announcement in accordance with
Section 6.3 of the Disclosures and Transparency Rules (DTR).
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.
Segmental results are reported before intra-group transfer pricing charges.
Asia Continental United Kingdom
Pacific Europe & Ireland Corporate Total
31 October 2023 £'000 £'000 £'000 £'000 £'000
Total revenue 44,332 211,432 48,183 - 303,947
Inter segment sales - (6,275) (10) - (6,285)
Revenue from external customers 44,332 205,157 48,173 - 297,662
EBITDA 9,475 90,109 18,545 (11,490) 106,639
Depreciation and amortisation (5,126) (26,079) (6,785) (355) (38,345)
(Impairment) / reversal of impairment (37) (1,395) 639 - (793)
Operating profit / (loss) 4,312 62,635 12,399 (11,844) 67,502
Operating profit 67,502
Other net gains 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 36,509 7,380 733 53,468
Non-current assets 28,134 103,226 26,508 1,124 158,992
Asia Continental United Kingdom
Pacific Europe & Ireland Corporate Total
31 October 2022 £'000 £'000 £'000 £'000 £'000
Total revenue 39,945 187,897 41,996 - 269,838
Inter segment sales - (10,058) - - (10,058)
Revenue from external customers 39,945 177,839 41,996 - 259,780
EBITDA 9,094 75,497 15,388 (7,738) 92,241
Depreciation and amortisation (5,421) (26,153) (6,954) (322) (38,850)
(Impairment) / reversal of impairment (1,715) 1,919 3,086 - 3,290
Operating profit / (loss) 1,958 51,263 11,520 (8,060) 56,681
Operating profit 56,681
Other net losses (1,176)
Finance income -
Finance costs (2,151)
Profit before tax 53,354
Tax (14,561)
Profit for the period 38,793
Capital expenditure (excluding Right of Use assets) 4,218 20,056 9,522 1,359 35,156
Non-current assets (restated) 24,870 90,959 25,045 796 141,670
Total revenue from external customers is analysed below:
31 October 31 October
2023 2022
£'000 £'000
Total revenue from external customers
Sales of equipment, spare parts & consumables 18,724 20,459
Sales of services 3,615 3,895
22,339 24,355
Vending revenue 275,323 235,425
Total revenue 297,662 259,780
There were no key customers in the period ended 31 October 2023 (2022: none).
4. Taxation expenses
Tax charges/(credits) in the statement of comprehensive income
31 October 31 October
2023 2022
£'000 £'000
Taxation
Current taxation
UK Corporation tax
- current period 9,833 6,104
- prior periods (1,068) 2,253
8,765 8,357
Overseas taxation
- current period 6,916 7,200
- prior periods (212) 90
6,704 7,290
Total current taxation 15,469 15,647
Deferred taxation
Origination and reversal of temporary differences
- current period - UK 677 (150)
- current period - overseas (663) (961)
Adjustments in respect of prior periods - UK 843 27
Adjustments in respect of prior periods - Overseas - 45
Impact of change in rate 75 (47)
Total deferred tax 932 (1,086)
Tax charge in the income statement 16,401 14,561
Tax relating to items (credited)/charged to other components of comprehensive
income
Corporation tax - -
Deferred tax (48) 248
Tax charge in other comprehensive income (48) 248
Total tax charge in the statement of comprehensive income 16,353 14,809
The Group tax charge of £16.4m (2022: £14.6m) corresponds to an effective
tax rate of 24.5% (2022: 27.4%).
The UK main rate of corporation tax increased from 19% to 25% on 1 April 2023.
The Group undertakes business in multiple tax jurisdictions.
5. Dividends paid and proposed
31 October 2023 31 October 2022
pence per share £'000 pence per share £'000
Dividends Paid
Special dividend
Approved by the Board on 18 July 2022 - - 6.50 24,572
Final
2021 approved at AGM held on 29 April 2022 - - 2.89 10,925
Interim Dividend
2022 approved by the board on 18 July 2022 2.60 9,829 - -
Final
2022 approved at AGM held on 28 April 2023 3.00 11,345 - -
Special dividend
2022 approved by the board on 20 April 2023 0.60 2,269 - -
6.20 23,443 9.39 35,497
Dividends Proposed
Interim Dividend
2022 approved by the board on 18 July 2022 - - 2.60 9,829
Interim Dividend
2023 approved by the board on 11 July 2023 2.97 11,240 - -
2.97 11,240 2.60 9,829
Period ended 31 October 2023 - Dividends paid in the period
The Board approved an interim dividend of 2.60p per ordinary share for the six
month period ended 30 April 2022, at its 18 July 2022 meeting. The interim
dividend was paid on 3 November 2022.
The Board proposed a final dividend of 3.00p per ordinary share in respect of
the year ended 31 October 2022, which was approved by shareholders at the
Annual General Meeting held on 28 April 2023 and paid on 12 May 2023.
The Board also approved, at its 20 April 2023 meeting, a special dividend of
0.60p per ordinary share, which was paid on 19 May 2023.
Period ended 31 October 2023 - Proposed dividends not paid in the period
The Board approved an interim dividend of 2.97p per ordinary share for the six
month period ended 30 April 2023, at its 11 July 2023 meeting. The interim
dividend was paid on 23 November 2023.
Period ended 31 October 2022 - Dividends paid in the period
The Board proposed a final dividend of 2.89p per ordinary share in respect of
the year ended 31 October 2021, which was approved by shareholders at the
Annual General Meeting held on 29 April 2022 and paid on 13 May 2022.
The Board also approved, at its 18 July meeting, a special dividend of 6.50p
per ordinary share, which was paid on 1 September 2022.
Period ended 31 October 2022 - Proposed dividends not paid in the period
The Board approved an interim dividend of 2.60p per ordinary share for the six
month period ended 30 April 2022, at its 18 July 2022 meeting. The interim
dividend was paid on 3 November 2022.
6. Earnings per share
Basic earnings per share amounts are calculated by dividing net earnings
attributable to shareholders of the Parent of £50,666,000 (2022:
£38,793,000) by the weighted average number of shares in issue during the
period.
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.
The earnings and weighted average number of shares used in the calculation are
set out in the table below:
31 October 2023 31 October 2022
Weighted Weighted
average Earnings average Earnings
number per share number per share
Earnings of shares pence Earnings of shares pence
£'000 '000 £'000 '000
Basic earnings per share 50,666 378,110 13.40 38,793 378,052 10.26
Effect of dilutive share options - 2,490 (0.09) - 1,048 (0.03)
Diluted earnings per share 50,666 380,600 13.31 38,793 379,100 10.23
Potential shares (for example, arising from exercising share options) are
treated as dilutive only when their conversion to shares would decrease basic
earnings per share or increase loss per share from continuing operations.
7. Non-current assets: Goodwill, other intangibles, property, plant and
equipment and investment property
Goodwill Other Intangible Property, plant & Investment
assets Equipment property
£'000 £'000 £'000 £'000
Net book value at 31 October 2021 15,305 19,988 91,973 597
Exchange adjustment 159 (110) 1,092 10
Additions - photobooths & vending machines - - 27,205 -
Additions - other assets - 2,486 5,465 -
Additions - right of use assets - - 7,298 -
Additions - new subsidaries 1,652 98 11 -
Amortisation / Depreciation - (6,618) (32,219) (15)
(Impairment) / Reversal of impairment - (153) 3,443 -
Disposals at net book value - (71) (3,178) -
Net book value at 31 October 2022 17,116 15,620 101,090 592
Purchase price allocation adjustment (796) 814 - -
Net book value at 1 November 2022 16,320 16,434 101,090 592
Exchange adjustment 1 (175) 628 9
Additions - photobooths & vending machines - - 39,122 -
Additions - other assets - 2,813 6,720 -
Additions - right of use assets - - 3,516 -
Additions - new subsidaries 3,268 49 1,496 -
Transfers - (121) 121 -
Transferred 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 13,054 118,124 -
8. Net cash
31 October 31 October
2023 2022
£'000 £'000
Cash and cash equivalents per statement of financial position 111,091 136,185
Non-current borrowings (50,137) (72,365)
Current borrowings (27,037) (29,799)
Net Cash 33,917 34,021
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.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE FINANCIAL REPORT
The Directors of the Company are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
The Directors who are making this responsibility statement and who are
responsible for preparing the Annual Report, the Report of the Directors and
the Group and Company financial statements in accordance with applicable law
and regulations (and their respective functions) are as follows:
Sir John Lewis OBE (Non-executive Chairman of the Board, Chairman of the
Nomination Committee, and member of the Remuneration and Audit Committees);
Serge Crasnianski (CEO and Deputy Chairman and member of the Executive Team);
Tania Crasnianski (Executive Director and member of the Executive Team);
Jean-Marc Janailhac (Non-executive Director); René Proglio (Non-executive
Director and Chairman of the Audit Committee); Emmanuel Olympitis (Senior
Independent Non-executive Director, Chairman of the Remuneration Committee and
a member of the Audit and Nomination Committees); Françoise Coutaz-Replan
(Non-executive Director and member of the Audit Committee); and Camille
Claverie (Non-executive Director).
Company law requires the Directors to prepare financial statements for the
Group and the Company for each financial year. Under that law, the Directors
are required to prepare the Group financial statements in accordance with
UK-adopted international accounting standards and applicable law and have
elected to prepare the Company's financial statements on the same basis.
Under company law, the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of their respective profit or loss
for that period. In preparing each of the Group and the Company's financial
statements, the Directors are required to:
■ Select suitable accounting policies and then apply them
consistently;
■ Make judgments and accounting estimates that are reasonable
and prudent;
■ State whether they have been prepared in accordance with
UK-adopted international accounting standards, subject to any material
departures disclosed and explained in the Group and Company financial
statements respectively; and
■ Prepare the financial statements on the going-concern basis unless
it is inappropriate to presume that the Group and the Parent Company will
continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and the
Group and enable them to ensure that their financial statements and the
Directors' Remuneration Report comply with the Companies Act 2006 and as
regards the Group's financial statements, Article 4 of the IAS Regulation.
The Directors have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration
Report and Corporate Governance Statement that comply with that law and those
regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility Statement of the Directors in respect of the annual financial report
Each of the Directors of the Company confirms that, to the best of his or her
knowledge:
■ The financial statements, which have been prepared in accordance
with UK-adopted international accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken as a whole;
and
■ The Strategic Report and Report of Directors in the Annual Report
include a fair review of the development and performance of the business and
the position of the Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that they face.
Fair, balanced and understandable
In accordance with the principles of the UK Corporate Governance Code, the
Directors have arrangements in place to ensure that the information presented
in the Annual Report is fair, balanced and understandable.
The Board considers, on the advice of its Audit Committee, that the Annual
Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for shareholders to assess the Company's and the
Group's position and performance, business model and strategy.
By order of the Board
Sir John Lewis OBE (Non-executive Chairman)
Serge Crasnianski (Chief Executive Officer and Deputy Chairman)
22 February 2024
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