Photo-Me bosses under threat

Activist shareholders today called for the removal of the chairman and chief executive of photo booth specialist Photo-Me International.

Cycladic and Principle Capital cited “unsatisfactory” operational performance, a badly managed strategic review and a lack of credibility among investors.

The shareholders have called for an extraordinary general meeting, at which they will ask for the immediate removal of non-executive chairman Vernon Sankey and chief executive Serge Crasnianski, who also holds 20% of the firm.

Cycladic and Principle own 18.2% of the voting shares, but said holders of a further 28.2% had expressed support for the resolutions.

Photo-Me will now hold a board meeting to consider its response. It declined to comment further today.

It is the second time this year that Principle has called for an EGM, with a previous request withdrawn after four directors left the group and the board agreed a timetable for progressing the possible disposal of its vending arm, which is responsible for photo-booths and digital media kiosks.

Cycladic and Principle said Photo-Me’s recent history of “operational mismanagement” had led to a profits warning in each of the last two years. They also noted a “long history of poorly managing investor expectations”, as well as insufficient progress with a strategic review started in June 2006.

The pair said uncertainty over the retirement date of Mr Crasnianski added to the destabilising effect caused by the lengthy review process, which may result in the disposal of the vending arm.

Mr Crasnianski, who is 65, founded the French arm of the Photo-Me business in 1963. Mr Sankey stepped up to chairman from deputy chairman in 2005.

The shareholders added: “Cycladic and Principle Capital believe that it is imperative that the chief executive leaves the company as soon as possible so that the company’s turnaround can begin under new leadership.”

They proposed the appointment of Martin Reavley, the current senior independent director, as interim chairman of the board.

In a statement, they said: “Cycladic and Principle Capital are aware of a number of high quality and available candidates who might be willing to become the new chief executive of the company but who have been reluctant to pursue their interest given the current chief executive’s continued involvement.

“Once that obstacle is removed, Cycladic and Principle Capital believe the board will be able to appoint a competent successor in a very short time-frame.”

Bookham, Surrey-based Photo-Me recently reported pre-tax profits in line with revised market expectations at £13m (€19m), compared with £25.7m (€38m) a year earlier. Revenues were down 4.4% at £214.9m (€317.8).

An estimated 25,000 photobooths – designed and manufactured by group – have been installed in more than 100 countries. It also has a minilabs arm.