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One fifth of Photo-Me International’s (PHTM) market value was wiped off at the start of the week following news that the Home Office will accept photos taken on mobile phones for passports.
Investors assumed this would render Photo-Me’s UK fleet of photo booths as worthless. The company replied by saying it believed accepting photos from mobile phones for official documents was ‘incompatible with developing security requirements’.
Analyst Simon Davies of investment bank Canaccord Genuity remains a fan of Photo-Me, saying share price weakness is a buying opportunity.
‘The UK is trialling potential changes to passport applications, potentially allowing adults aged over 26 to use mobile photos to renew their passport, but only if the photos are of the requisite standard (set by ICAO and ISO), something which is very hard to achieve,’ he comments.
Photo-Me’s UK photo booths only account for an estimated 5% of group profit, so a decline in income from this area of the business wouldn’t have a major impact.
Davies notes Europe is shifting towards more sophisticated security photos including 3D imaging and iris scanning. Therefore he believes there is a chance the UK Passport Office could rethink its stance towards pictures from phones. (DC)
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