- Sales and profit up 7% and 10% respectively
- Laundry division up 21%
- Fourth year of double-digit profit growth
Instant equipment firm ME Group International (MEGP) said it expected another to book another record year of profitability after revealing revenue growth of approximately 7% excluding currency impacts and pre-tax profit up by a tenth for the 12-months to 31 October.
The shares fell 1.25% to 223p on profit-taking after a strong run which has seen the shares gain 71% so far in 2024, handsomely beating the FTSE 250 mid-cap return of 7%.
The Wash.ME laundry division was the standout performer delivering net revenue growth of circa 19% (up 21% excluding currency impacts) as the group continued to roll out a record 1,111 machines across key regions including France and the UK.
Meanwhile, the photobooth division performed as expected with revenue up circa 4.4% excluding foreign exchange impacts. The roll out of the company’s next generation photobooths, mainly in France, proved slower than expected due to technical issues.
FOREIGN EXCHANGE IMPACT
As ME Group previously flagged at the half year, the Japanese yen has been weak against the pound and registered a 12% decrease in value over the period, while the euro fell by 2% impacting reported revenue when converted back into sterling.
The effect is purely translational and has no impact on the underlying operations.
Excluding these effects the company expects full year revenue to be at least £318 million and pre-tax profit to be not less than £73 million, representing 10% growth on the prior year.
This was 4% ahead of the forecast from Berenberg analyst Eleanor Spencer, who commented: ‘We think that this adds to ME Group’s increasing track record of underlying performance delivery - it would mark the fourth consecutive year of double-digit PBT growth since 2020.’
On a reported basis revenue is expected to be greater than £308 million, up 3% on the prior year and below current analyst consensus forecasts calling for £315 million.
The company said it remains highly cash generative and well capitalised with a gross cash position of £86.1 million at the period end compared with £111.1 million in 2023.
This was after making loan repayments of circa £27 million, £53 million invested in capital expenditure and £28 million in dividends. The group’s net cash position was £38.2 million excluding investments and convertible bonds compared with £33.9 million in 2023.
Full year results are expected to be published in mid-February.
