Photo-Me and Pressure Tech shares plummet

Investors in Photo-Me International and Pressure Technologies found out to their cost today about how faraway trends and developments can bear down on share prices.

In the case of Photo-Me, the photo booth and laundry company has been hit by the slower-than-expected take up of the Japanese government's My Number ID card programme. The scheme is not compulsory and demand has not met the recent significant growth in the country's number of photobooths.

This has led to the need for a restructuring of its Japanese subsidiary, which Photo-Me said will mean profits for the year to April 2019 are likely to be similar to this year's performance.

Shares in the company, which joined the London stock exchange in 1962, lost a fifth of their value. However, Photo-Me said the news was unlikely to affect its dividend policy under which it pledged to grow the pay-out by 20% for the 2017 and 2018 financial years.

The group, which will release its annual results in July, paid a total dividend of 7.03p last year. Its current dividend yield stands at just above 6%.

The rest of the photo ID business has performed well, with the roll-out of the group's encrypted passport photo ID upload technology commencing in December. So far, 2,200 photobooths have been upgraded to allow direct and secure transmission of ID photos and data to the UK Passport Office.

Source: interactive investor          Past performance is not a guide to future performance

AIM-listed Pressure Technologies is seeing lumpiness in earnings thanks to delays in customer decision making on biogas upgrading equipment in its Alternative Energy division.

The maker of high pressure systems said this was partly due to slowness in customers obtaining environmental permits in North and South America.

Profit recognition for the upgrading projects is skewed towards completion, so delays in contract awards experienced to date will negatively impact 2018 results and the division will be loss making for the year.

There have also been delays closer to home in relation to cylinders for the Dreadnought submarine programme, which is the replacement for Trident.

Manufacturing of standard design naval cylinders has commenced, but the company is still awaiting the order to start manufacture of the programme specific cylinders.

Despite a material short-term impact. Pressure said the timing issues did not affect the medium-term prospects for the group as it continues to benefit from strong market positions.

Shares were 22% lower today, wiping out the gains since early April that had taken the stock as high as 200p. Cantor Fitzgerald remains supportive despite cutting its forecast profit for this year to £1.1 million from £4 million.

Source: interactive investor          Past performance is not a guide to future performance

Its industrials analyst Robin Byde said: "Today's trading update is clearly disappointing but we believe the manufacturing divisions are well placed to capture the accelerating recovery in market demand.

"The business is inherently lumpy and issues raised are largely around timing."