Me Group International “Expect considerable share price recovery”, Gervais Williams

Me Group International plc (LON:MEGP) is the topic of conversation when Co Fund Manager Gervais Williams of Premier Miton Investors caught up with DirectorsTalk for an exclusive interview to discuss the UK listed market and some of his holdings in Miton UK MicroCap Trust plc.

DirectorsTalk asked: Me Group International plc (LON:MEGP) specialises in photobooths, vending and laundry services amongst other businesses around the world. Now, it’s just posted a 20% growth in annual revenues of circa £260 million and a 41% rise in EBITDA (to £92.2 million) and that’s with a clear five-year growth strategy. This seems like another gem that’s really delivering globally, what are your thoughts?

Gervais Williams commented:

“Yes, it’s interesting. Even this company, which is slightly larger than some of the others in the MINI portfolio. It’s got great characteristics for us, it’s invested hard, it’s generating cash and it’s got a strong balance sheet and it’s paying dividends.

It’s these combinations which we think not only allow the business to continue to succeed at a time when other companies become more capital-constrained because perhaps the bankers aren’t lending them any money, but can acquire assets from the receiver and enhance cash generation going forward.”

There are a remarkable number of companies like this that are overlooked in the London markets which we think when the local selling reduces, could see their share prices recover quite considerably.

Me Group sets out the following highlights in its recently published Annual Report 2022:

  • Strong financial performance was driven by increased demand and a progressive increase of prices, particularly for photobooth and laundry services, across Continental Europe and in the UK & Republic of Ireland
  • Photo.ME revenue increased by 25.2% to £154.3 million as activity continued to recover following the easing of travel and social restrictions across most territories
  • Wash.ME revenue increased by 14.0% to £61.8 million reflecting the successful rollout, and uptake, of higher cost-per-use laundry machines. The total number of units in operation increased by 16.1% to 4,754 as the Group continued its strategic expansion of the estate
  • Print.ME revenue decreased due to the removal of unprofitable machines. Replacement of 500 machines with newer model commenced in H2
  • Feed.ME pizza vending business underwent a transition period, including reorganization of the sales teams and upgrading technical software across our pizza vending estate
  • Continued to execute innovation and diversification strategy to meet ever-changing consumer needs, including the launch of new self-service machine formats and liveness detection technology to mitigate photo ID manipulation
  • Company name changed to ME Group International plc (previously Photo-Me International plc), to better reflect the Group’s operations today evolution of the Group over the past 60 years through innovation to expand and diversify its operations internationally
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