Market's view on ME Group
Published on April 2024
- ME Group is perceived positively for moving with the times regarding passport and driving licence pictures, and has diversified into laundry services.
- The company’s pre-tax profit increased by 26% to £67m last year, with a significant capital expenditure of £53m on new machines. Despite this, total cash was slightly up at £34m.
- ME Group’s shares have risen 30% over the past year to 166p, yet they are still below the target prices set by analysts, which are 200p and above.
- The price-earnings ratio is low at 11.1 for the current year, compared to 18 in 2022, suggesting the stock is undervalued.
- Concerns were raised about the company’s vulnerability to a takeover due to its low share price.
- There’s anticipation around the potential for significant business decisions influenced by key shareholder Serge Crasnianski, who holds almost 37% of the shares.
- The company operates laundry machines and photo booths across 19 countries, maintaining a dominant market position with 44,000 vending machines.
- Digitalisation of ME Group’s estate is ongoing, enhancing the efficiency of remote repairs and reducing the necessity for physical engineer visits.
- Stock watchers noted transactions with large volumes of shares sold at 172p, indicating potential significant market activities.
- There are discussions about the timing and implications of upcoming financial results and general meetings.