Right, let’s dive into ME Group International’s (MEGP) latest interim results. The headline? A record-breaking first half for profitability paired with a chunky dividend hike. This isn’t just steady as she goes; it’s a clear signal of momentum despite the usual global economic headwinds. Serge Crasnianski and the team are delivering on their strategy, and the numbers back it up.
H1 2025: The Financial Snapshot
Cutting through the RNS detail, here’s the core financial performance for the six months ended 30 April 2025 (H1 2025) compared to H1 2024:
- Revenue: £153.8m (Up 2.3% Reported / Up 4.7% Constant Currency)
- EBITDA: £53.2m (Up 3.9% Reported / Up 6.4% Constant Currency) – Margin up 0.5 ppts to 34.6%
- Profit Before Tax (PBT): £34.0m (Up 13.3% Reported / Up 16.3% Constant Currency) – Margin up 2.2 ppts to 22.1%
- Cash Generated from Operations: £47.6m (Up 14.1%)
- Diluted Earnings Per Share (EPS): 6.74p (Up 12.8%)
- Interim Dividend Per Share: 3.85p (Up 11.6% from 3.45p) – Returning £14.5m to shareholders
- Net Cash: £36.2m (Up £14.5m YoY)
The constant currency figures tell the real underlying growth story, stripping out the negative FX impact (mainly a weaker Yen and Euro vs Sterling). Margins expanding? That’s operational efficiency and scale in action.
Driving the Engine: Wash.ME Laundry Leads the Charge
Forget the photobooths for a moment (though they’re still crucial). The undisputed star of this show is the Wash.ME Revolution laundry business.
- Total Laundry Revenue: £51.9m (Up 17.7% Reported / Up 20.2% CC)
- Revolution Vending Revenue: £46.7m (Up 13.3% Reported / Up 15.8% CC)
- Total Laundry EBITDA: £25.4m (Up 20.4% Reported / Up 22.7% CC) – 54% Margin!
- Units Deployed: 6,956 (Up 16.8% YoY)
- Net New Installations (H1): 523 Revolution units
This isn’t just growth; it’s hypergrowth. Laundry now contributes 33.5% of Group vending revenue and a whopping 47.7% of Group EBITDA – a dramatic shift from just 18.3% and 23.4% respectively back in 2019. The strategy of rapid, targeted deployment in high-footfall locations (supermarkets, petrol forecourts etc.) is paying serious dividends. Capex here was £14.4m (20% of total), showing continued heavy investment for future returns.
While average revenue per machine dipped slightly (-2.7% reported, -0.6% CC), this is largely due to a smart move: adding *extra* machines at 232 high-demand sites to manage peak loads (especially weekends). This increases total revenue but spreads it across more machines. Capacity meeting demand is a good problem to have.
Photo.ME: A Blip, Not a Breakdown
The photobooth division faced a temporary setback:
- Photo.ME Vending Revenue: £82.7m (Down 3.7% Reported / Down 1.4% CC)
- Cause: Technical issues with new printers supplied for next-gen booths (estimated 2.0% revenue impact).
- The Silver Lining: The issue was resolved in April. Crucially, despite the revenue dip, Photo.ME EBITDA actually increased by 1.0% (up 3.4% CC) to £29.6m, with margins improving significantly to 35.8% (H1 2024: 34.1%). That’s impressive cost control and operational leverage.
- Outlook: Performance has returned to growth post-fix. The rollout of 3,200 next-gen photobooths in FY25 is still on track, albeit capex was lower in H1 (£5.7m vs £9.0m) due to the printer delay. Innovation continues (e.g., AI image offerings, F1/PSG partnerships).
Photobooths remain the largest segment by machine count (30,557 units) and revenue contribution (53.8%), but its relative importance is evolving as laundry scales.
Print.ME & Other Vending: Steady Ancillary Performers
- Print.ME (Digital Printing): Revenue up 3.8% (7.7% CC) to £5.4m. EBITDA up to £2.3m. Focus on replacing old machines with new SpeedLab models is boosting quality and average revenue per machine (+8.1%), even as the total estate shrinks slightly.
- Other Vending (Amuse.ME, Copy.ME, Feed.ME): Vending revenue up 6.0% to £5.2m. EBITDA up 10.3% to £6.4m. A profitable, diverse mix leveraging existing site relationships.
Geographic Performance: Europe Powers Ahead
Continental Europe (66.3% of Revenue)
- Revenue: £102.0m (Up 3.8% Reported / Up 6.4% CC)
- Operating Profit: £25.7m (Up 22.4% Reported / Up 25.7% CC)
- Driven by strong laundry growth (+11.2% revenue) and 350 new Revolution installs. Solid Print.ME performance. Photobooth revenue dip due to printer issue, but recovering.
UK & Republic of Ireland (17.0% of Revenue)
- Revenue: £26.1m (Up 1.6% Reported / Up 2.3% CC)
- Operating Profit: £7.8m (Up 8.3%)
- Laundry shines again (+16.4% revenue), with 171 new Revolutions installed. Now operating at 159 Morrisons and 65 MFG sites. Photobooth revenue impacted by the end of a specific contract (known factor).
Asia Pacific (16.7% of Revenue)
- Revenue: £25.7m (Down 2.7% Reported / Up 0.4% CC)
- Operating Profit: £3.9m (Up 18.2% / Up 21.2% CC)
- FX headwinds masked underlying stability. Profitability improved significantly despite slight revenue pressure. Continued expansion in orange juice vending (487 machines).
Cash, Balance Sheet & Returns: The Virtuous Circle
ME Group’s model is inherently cash-generative, and H1 2025 demonstrated this powerfully:
- Cash Generated from Operations: £47.6m (Up 14.1%).
- This funded:
- Capex: £28.8m (Primarily Revolution laundry £14.4m & photobooths £5.7m)
- Loan Repayments: £11.0m
- Dividends: £14.5m via the increased interim payout (3.85p).
- Small Acquisition (APS Belgium): Adding 116 profitable photobooths.
- Net Cash Position: Strengthened to £36.2m (Excludes £9.7m lease liabilities), up £14.5m YoY. Gross cash £74.9m.
- Dividend Policy: Firmly committed to paying out more than 55% of annual profits after tax. This 11.6% interim hike is a confident statement.
Outlook & Strategic Nuances: Confidence and Options
The Board’s message is one of steady confidence:
- FY 2025 Guidance Reiterated: Profit Before Tax expected between £76m and £80m. Another record year in sight.
- Growth Strategy On Track: Focus remains on core laundry and photobooth expansion, leveraging competitive advantages (R&D, site partnerships, operational efficiency). Targeting 1,200 net new Revolution units and 3,200 next-gen photobooths in FY25.
- New Product Trial: Kee.ME automated key-cutting service (3 machines in France) showing “promising results”.
- Board Refresh: Vladimir Crasneanscki appointed Executive Director (also Head of IR & UK GM), Lord Gregory Barker joined as Independent NED.
- Post-Period Intrigue: On 18 June 2025, the Group announced it is “evaluating various strategic options to enhance shareholder value,” including potentially seeking offerors. Emphasis: No offers received yet, no certainty any will be made. This adds a layer of potential catalyst, but the underlying H1 performance stands strong regardless.
The Takeaway: Washing Well, Printing Money
ME Group’s H1 results are undeniably robust. They’ve navigated FX headwinds and a temporary photobooth hiccup to deliver record profitability, driven by the exceptional growth and margins of the Revolution laundry business. This isn’t a one-off; it’s the result of a clear, executed strategy transforming the business mix.
The cash generation is impressive, funding growth, debt reduction, and significantly increased shareholder returns (that juicy 11.6% dividend hike speaks volumes). The reiterated guidance underscores confidence in the second half and full year.
While the strategic review announcement adds a speculative element, the fundamental story here is one of a company executing well in its core markets, successfully pivoting its growth engine towards laundry, and rewarding shareholders along the way. For investors seeking profitable growth, strong cash generation, and a solid yield, ME Group’s latest numbers make a compelling case. One to watch closely, especially with that strategic option card now on the table.
Key Dates for the Diary:
- Ex-Dividend Date: 6 November 2025
- Record Date: 7 November 2025
- Interim Dividend Payment Date: 28 November 2025
