Photo-Me agrees to boardroom clearout

A rebel shareholder was today successful in forcing the resignations of four directors at struggling photo booth firm Photo-Me International.

Principle Capital had pledged to put its call for a boardroom clearout to a vote of shareholders, along with its demand that Photo-Me end a strategic review which could lead to a break-up of the business.

Photo-Me said today it would continue with the review, which it believed was backed by the majority of Photo-Me shareholders. It urged Principle – owner of 10% of the company – to withdraw its resolution.

The developments came as Photo-Me said pre-tax profits for the year to April slid to £7.4m (€11m), from £21m (€31m) a year earlier.

The company's vending division, which comprises photobooths and digital media kiosks, saw operating profits decrease almost 25% to £14.2m (€21m), reflecting the temporary impact of changes in international passport photo regulations.

Continuing weakness in the market for minilabs meant profits in the manufacturing arm fell 61% to £5.1m (€7.6m).

Photo-Me said it was in the early stages of exploring the possible sale of the vending division, with “strong interest” in the business given its strong prospects and leading positions in key markets.

But Principle wants the sale process halted, amid frustration at the lack of progress shown by the England-based group.

It has called for an extraordinary general meeting, at which investors had also been due to discuss cuts to the size of the company’s 11-strong board, which Principle has described as being unwieldy.

Photo-Me pre-empted the vote by today announcing the departures of executive directors Riccardo Costi and Francois Giuntini and non-executive director Francis Wahl. Dan David, the company’s life president, will also step down as a non-executive director at the conclusion of the strategic review.

Chairman Vernon Sankey paid tribute to the “selfless” decision of the directors and paid tribute to the “very considerable contribution” made to the board over many years.

He added: “The board is unanimous in its belief that the strategy it is pursuing on a number of fronts is the right one to maximise value for shareholders.”