Photo firm focuses on new revenue streams after fine

The group said it swung into profit in the year to April 30, with pre-tax profits of 9.3m against 5.1m in losses a year earlier.

Photo-Me declared itself to be in a "much stronger position" after a boardroom overhaul and strategy re-think.

But it continues to be dogged by past mistakes – it was hit recently with a record fine from the Financial Services Authority (FSA) for failing to disclose key information promptly to the stock market.

It was the biggest penalty of its kind ever imposed and related to Photo-Me's breach of the rules surrounding so-called inside information in 2007, although the group said it had already provided for the FSA fine and legal costs in the year to April 30 2009.

Yesterday's annual figures showed progress in its revival plans, with sales up 5.7 per cent and surplus cash of 8.1m at the year-end against net debt of 23.5m a year earlier.

The firm – based in Bookham, Surrey – also said the threat of biometric identification to traditional photos had receded as hard-up governments put plans on hold.

Photo-Me is working on initiatives to drive new revenue streams, including the roll out of Photobook Makers offering five-minute digital print albums, as well as developing "futuristic" and 3D capable booths.

Chairman John Lewis, appointed in May, said the group "has a plan to drive better performance and re-energise this business".

He added: "We have gone through an extensive process of examining every aspect of our core photo booth business."

It sold off its loss-making wholesale photo-processing labs manufacturing business, Imaging Solutions, last July and aims to increase the number of sites it operates in its main photobooth division, focusing on the best locations.

As well as new product lines, Photo-Me is also targeting growth markets such as that in China.

The group now operates 43,800 vending sites worldwide, of which around a half are traditional photo booths and the remainder digital printing kiosks, Photobook Makers and amusement machines.

This side of the business accounts for 78 per cent of total group revenue, but its sales and servicing arm that sells to third parties drove the improvement in earnings as it moved out of the red, the company said.