Me Group reports record annual profit, launches share buyback

(Sharecast News) - Me Group International reported record annual profit on Monday, as growth in its laundry division offset weaker photobooth performance, while it also confirmed the launch of an £18m share buyback programme. The London-listed instant-service equipment provider, whose shares remain suspended from trading due to a delay in its audited full-year accounts, said profit before tax rose 6.5% to £78.2m for the year ended 31 October, as revenue increased 2.4% to £315.4m, or 3.0% on a constant currency basis.

EBITDA grew 5.4% to £120.4m, with margins improving to 38.2% from 37.1% a year earlier, while diluted earnings per share increased 4.5% to 14.91p.

Growth was driven by the group's laundry operations, where revenue climbed 17.3% to £112.4m and EBITDA rose 18.1% to £55.5m, accounting for 46.1% of total group EBITDA.

The company installed a record 1,326 machines during the year, taking the total estate to 7,607 units, up 17.7% year-on-year, with Wash.ME laundry vending revenue rising 10.2% to £100.8m.

By contrast, photobooth revenue declined 4.0% to £166.2m, reflecting regulatory changes in Germany and issues with a printer supplier, although the division continued to deliver robust trading in key markets.

Cash generation remained strong, with cash generated from operations increasing 8.9% to £115.5m, although net cash fell 10.2% to £26.5m due to increased capital investment.

The group raised its total dividend by 9.5% to 8.64p per share, returning £32.6m to shareholders.

"I am delighted to announce another year of record profitability at Me Group, largely driven by the continued strong performance in our fast-growing laundry division," said chief executive and deputy chairman Serge Crasnianski.

"Aligned with our growth strategy, and by leveraging strong customer relationships, the group will continue to further build on its existing strong international footprint through the accelerated rollout of its laundry operations.

Innovation and diversification remain a key focus for the group, and the year ahead will see the rollout of our innovative key duplication machine, Kee.ME, in France."

Crasnianski also said the group would look to pursue acquisitions closely aligned to its core business to expand its footprint and broaden its offering.

Alongside the results, Me Group confirmed it had started an £18m share buyback programme, which would run until 31 December.

The company said it had appointed Peel Hunt to execute the programme on its behalf through open market transactions, with purchases made independently of the company within pre-set parameters.

The group said it could cancel shares acquired or hold them in treasury to meet obligations under share option programmes.

Looking ahead, Me Group said trading in the current financial year was in line with expectations, with the board expressing confidence in the group's strategy, financial position and market leadership.

Reporting by Josh White for Sharecast.com.

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