Ian Forrest, investment research analyst at The Share Centre, explains why Photo-Me International is share of the week this week:

Photo-Me International is a cash-generative and increasingly innovative business which has concentrated on expanding into new geographic markets and new products. The firm offers rental or purchasing options for photo booths, children's rides and self-service laundrettes across 18 countries.

The group released results in June which reported a 20% increase in profit to £48m on the back of a 16.7% rise in revenue to £214.7m. Interested investors should appreciate that the company also announced that its dividend rose by 20% to 7.03 pence.

Market prices (PD)

The firm is confident that a significant proportion of future revenue will come from its futuristic photo booths. These will print pictures in 3D, allow card payments and enable digital photo printing. Also, after encouraging trials in France and Belgium, the group intends to place up to 6,000 laundry machines as it expands this service outside supermarkets in Europe by the end of 2020. Furthermore, investors should note that there is also potential demand from governments for ID photo cards needed to combat fraud and improve security.

We therefore recommend the shares as a 'buy' for those with a balanced portfolio and willing to accept a higher level of risk.

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