Photo-Me shares have dropped by more than a quarter after it warned on profits due to poor trading in Japan.
The British company, which operates photo kiosks and ID card booths in Europe and Asia, said it now expects to make £44m of profit before tax for the year to next April, which was “below current market expectations”.
Shares in Photo-Me, which joined the London Stock Exchange in 1962, were down by 26% – 39.6p on Wednesday afternoon.
Japan has the highest density of photobooths in the world and the number was increased after the country’s government announced a new ID card programme two years ago.
Photo-Me said: “However, this card programme is not compulsory and has not gained the momentum photobooth operators initially anticipated.”
The group said it would now “invest in a thorough restructuring” of its Japanese subsidiary, which it expected to boost profitablity.
The rest of the photo business has performed well, with 2,200 photobooths having been upgraded to allow direct and secure transmission of ID photos and data to the UK Passport Office.
Annual results for the group will be published in July.