Source: Sharecast
Sales at the British company, which also makes and operates automated laundry machines, nudged up 0.3% to £154.3m in the six months to 30 April, while pre-tax profits eased 3.8% to £32.7m.
ME Group said interim trading had been as expected until April, when it experienced a slowdown in vending revenue, driven by a "significant" reduction in photobooth activity in particular in a small number of markets. France, its largest and most profitable market, was especially badly affected by a more cautious consumer environment, it noted. As well as weighing on overall sentiment, the outbreak of war in the Middle East and subsequent travel uncertainty also dented demand for official photo ID.
However, looking to the second half and ME Group remained confident. It said there had already been a return to more normal trading patterns, with total vending revenue 11.1% higher year-on-year in May. Within that, Wash.ME and Photo.ME vending revenues rose 25.9% and 1.8% respectively.
It concluded that while mindful of geopolitical factors, "which may lead to a softening of trading patterns", it was on track to meet full-year guidance for pre-tax profits in the range of £69m to £74m. It also confirmed it was on course to install around 1,300 automated laundry machines by the year end. It currently has around 49,000 vending units in operation worldwide.
As at 1030 BST, shares in the FTSE 250 company - which have been trading on the London market since 1962 - had rallied 11% to 114.72p.
Serge Crasnianski, chief executive, said: "Despite a challenging end to the period, largely driven by the ongoing Middle East conflict, I am pleased that the group has continued to make good strategic progress.
"During the period we secured new strategic partnerships, notably with Asda in the UK, and successfully renewed key multi-year contracts in France.
"The group’s predictable revenue streams and highly-cash generative business model support our long-term growth strategy. We are on track to deliver a full-year performance in line with revised expectations."
Annual guidance was revised in June on the back of the tough April trading.
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