Photo-Me bosses ousted by investors

Activist shareholders were today successful in forcing out the chairman and chief executive of photo booth firm Photo-Me International.

Vernon Sankey, chairman, will not seek re-election at the company’s annual meeting in October, while chief executive Serge Crasnianski has announced his intention to retire.

Photo-Me announced the proposed boardroom changes after two shareholders, Principle Capital and Cycladic, threatened an extraordinary general meeting, at which they planned to seek the removal of the pair.

The investors said they were concerned about “unsatisfactory” operational performance, a badly managed strategic review and a lack of credibility among investors. Cycladic and Principle own 18.2% of the voting shares, but said holders of a further 28.2% expressed support for the EGM resolutions.

Photo-Me said today it was concerned that an EGM might distract the business at a time when it is considering the sale of its vending arm, which is responsible for photo booths and digital media kiosks.

It will now discuss the proposed changes with Principle and Cycladic, including a recommendation that a committee of the board selects a new chairman and chief executive. Mr Crasnianski has said he will leave as soon as the vending disposal process is completed and a successor is in place.

Mr Sankey said: “The board is unanimous in its belief that the continuation of the vending division disposal process is the right one at the moment and that the succession issue must be smoothly managed to avoid further unnecessary and damaging disruption to the business.

“The actions we are taking are designed to do this in a sensible and timely way.”

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.

It is the second time this year that Principle has called for an EGM, with a previous request withdrawn after four directors left the group and the board agreed a timetable for progressing the possible disposal of its vending arm.

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.