Audited Annual Results

Mar 01 2023 07:00 GMTSource: RNS

RNS Number : 4220R

ME Group International PLC

01 March 2023

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

1 March 2023

ME GROUP INTERNATIONAL PLC

("Me Group" or "the Group" or "the Company")

Audited Annual Results for the 12 months ended 31 October 2022

Me Group International plc (LON: MEGP), the instant-service equipment group, announces its results for the 12 months ended 31 October 2022 ("FY 2022" or the "Period").

KEY FINANCIALS

	Reported
	12 months ended 31 October 2022	12 months ended 31 October 2021	Change
Revenue	£259.8m	£214.4m	+21.2%
EBITDA¹	£92.2m	£65.1m	+41.6%
Profit before tax²	£53.4m	£28.6m	+86.7%
Profit after tax	£38.8m	£21.9m	+77.2%
Cash generated from operations	£87.9m	£66.1m	+33.0%
Gross cash	£136.2m	£99.4m	+37.0%
Net cash³	£34.0m	£34.9m	+2.6%
Earnings per share (diluted)	10.23p	5.77p	+77.3%
Dividends:⁴
- Interim Dividend per ordinary share (declared)	2.6p	nil	n/a
- Special Dividend per ordinary share (paid)	6.5p	nil	n/a
- Final Dividend per ordinary share (declared)	3.0p	2.89p	n/a
Total dividend per ordinary share	12.1p	2.89p	n/a

¹ EBITDA is Reported profit before tax, total depreciation and amortisation, other net gains, finance cost and income.

² Includes impairments and provisions

³ Net cash excludes investments in convertible bonds (£4.3m) and lease liabilities (£15.9m). See note 19 of the Financial Statements for details of net cash

⁴ Special Dividend paid on 1 September 2022 (£24.57m), Interim Dividend paid on 3 November 2022. The Declared Final Dividend will be paid on 12 May 2023, subject to approval at the AGM

HIGHLIGHTS

· Strong financial performance was driven by increased demand and a progressive increase of prices, particularly for photobooth and laundry services, across Continental Europe and in the UK & the Republic of Ireland

· Photo.ME revenue increased by 25.2% to £154.3 million as photobooth activity continued to recover following the easing of travel and social restrictions across most territories

· Wash.ME revenue increased by 14.0% to £61.8 million reflecting the successful rollout, and uptake, of higher cost-per-use laundry machines

· The total number of Revolution laundry units in operation increased by 16.1% to 4,754 as the Group continued its strategic expansion of the estate

· Print.ME revenue slightly decreased due to the removal of unprofitable machines. Replacement of 500 machines with newer model commenced in H2

· Feed.ME pizza vending business underwent a transition period, including reorganization of the sales teams and upgrading technical software across our pizza vending estate.

· Continued to execute innovation and diversification strategy to meet ever-changing consumer needs, including the launch of new self-service machine formats and liveness detection technology to mitigate photo ID manipulation

· The Company name changed to ME Group International plc (previously Photo-Me International plc), to better reflect the Group's operations today and the evolution of the Group over the past 60 years through innovation to expand and diversify its operations internationally

OUTLOOK

· The Group has set out its five-year growth strategy, centered on five core pillars, to support the development of each of the Group's principal business areas and continue to drive sustainable revenue and profit performance

· Execution of next-generation multi-service photobooth rollout programme commenced in Q1 FY 2023, to deploy approx. 10,000 units by 2025, with an initial target of 3,000 machines installed in France by the end of October 2023 in France

· Continued focus on deployment of Revolution laundry units, with plans to accelerate installations at a rate of approx. 80-90 per month, alongside an increased focus on developing cost and energy-saving models

· Increase in activity around the expansion of Feed.ME business, targeting an increase in the number of lease agreements for further fruit juice vending equipment (in Japan) and pizza vending equipment (in France)

· Whilst still early into the financial year, the Board has seen a continuation of positive trading momentum and as a result, the Board anticipates that results for FY 2023 will be in line with current market expectations*, subject to any changes to the broader macroeconomic environment

^* The Group's compiled analysts' consensus forecast for the financial year ended 31 October 2023 shows revenue of £284.8m, EBITDA of £91.1m and profit before tax of £58.5m.

Serge Crasnianski, CEO & Deputy Chairman, commented:

"Our performance in FY 2022 showed strong recovery particularly within our photobooth operations despite some continued disruption from COVID-19 in the Period, and the macro-economic challenges impacting business. We have continued with our strategic focus on innovation, R&D and diversification which remain important factors in the Group's long-term growth strategy. We remain in a strong financial and liquidity position to fund future growth whilst continuing to navigate the broader macroeconomic headwinds."

Annual Report and Accounts

On Tuesday 28 February 2023, ME Group International plc published its annual report and accounts for the financial year ended 31 October 2022 (the "Annual Report"). The Annual Report is available on the Company's website at www.me-group.com.

The Annual Report will be posted to those shareholders who have not chosen to receive electronic communication or communication through the Company's website.

A copy of the Annual Report will also be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

Enquiries:

ME Group International plc	+44 (0) 1372 453 399
Serge Crasnianski, CEO
Stéphane Gibon, CFO

Hudson Sandler	+44 (0) 20 7796 4133 me-group@hudsonsandler.com
Wendy Baker/Nick Moore/Ben Wilson

NOTES TO EDITORS

ME Group International plc (LSE: MEGP) operates, sells and services a wide range of instant-service vending equipment, primarily aimed at the consumer market.

The Group operates vending units across 20 countries* and its technological innovation is focused on four principal areas:

· Photo.ME - Photobooths and integrated biometric identification solutions

· Wash.ME - Unattended laundry services and launderettes

· Print.ME - High-quality digital printing kiosks

· Feed.ME - Vending equipment for the food service market

*South Korea subsidiary sold in November 2022. Following this disposal, the Group has operations in 19 countries.

In addition, the Group operates other vending equipment such as children's rides, amusement machines, and business service equipment.

Whilst the Group both sells and services this equipment, the majority of units are owned, operated and maintained by Me Group International plc. The Group pays the site owner a commission based on turnover, which varies depending on the country, location and the type of machine.

The Group has built long-term relationships with major site owners and its equipment is generally sited in prime locations in areas of high footfall such as supermarkets, shopping malls (indoors and outdoors), transport hubs, and administration buildings (City Halls, Police etc.). Equipment is maintained and serviced by an established network of 650 field engineers.

In August 2022 the Company changed its listed entity name to ME Group International plc (previously Photo-Me International plc) to better reflect the Group's diversification focus and business strategy.

The Company's shares have been listed on the London Stock Exchange since 1962.

For further information: www.me-group.com

CHAIRMAN'S STATEMENT

2022 Overview

The Group delivered a strong performance in the Period, driven by the recovery across most of our markets and principal business areas. Most significant was the resurgence in activity across our photo ID and laundry services, which was most evident in Continental Europe, particularly France, the UK and Germany.

As a result of the positive trading momentum, the Group performed better than initially anticipated at the outset of FY 2022, which lead to the Board revising its revenue and profit expectation on two separate occasions during the Period. Total Group revenue increased by 21.2% and EBITDA increased by 41.6% compared to the prior 12 months to 31 October 2021.

Change of the Company name to ME Group

In August, we announced the change of the Company name to ME Group International plc, with the new London stock market ticker 'MEGP'. The new Company name marked an important milestone for the Group in its 60^th year as a public listed company. Our new name better reflects our innovation and diversification strategy, as well as the evolution of our product offer today. We look forward to the next exciting chapter of the Group's growth as we continue to innovate and extend our product range to meet the needs of our customers and consumers across the world.

Business model and growth strategy

We have a proven business model which benefits from a dominant market position, with limited or no competition, in many of the countries in which we operate. Each day, millions of people see and use our conveniently positioned instant service machines as we strive to make people's lives easier every day around the world.

Our growth strategy is focused on diversifying our product portfolio, expanding the number of units in operation and increasing the yield per unit. This is underpinned by our disciplined approach to minimising production and operational costs, enabling us to capitalise on operating leverage.

Our long-standing partnerships with site owners and utilisation of long-term contracts ensure consistent and solid recurring revenue streams and revenue visibility, year on year. These are characteristics similar to those of an infrastructure business which provide the Group with good visibility and predictability on revenue streams. In 90% of cases, contracts are tacit renewals. We also benefit from economies of scale through our extensive machine network and the increasing trend towards automation, where we have a depth of expertise, which also presents significant barriers to potential competitors.

Our five-year growth strategy is centred on five core pillars to support the development of each of the Group's principal business areas - photo identification (Photo.ME), laundry services (Wash.ME), digital printing services (Print.ME) and food vending equipment (Feed.ME) through:

1. Expansion into new geographic territories and continue to build the Group's international presence including recently entered markets of Italy, Finland and Australia.

2. Entering new market segments through securing new partnerships with businesses such as supermarkets and smaller retailers.

3. Ongoing new product and technology innovation to meet the vending needs of consumers through state-of-the-art user experience, backed by the best technology, and an omnichannel approach.

4. Continued expansion and diversification of services and revenue growth through a multi-service instant service offering and integration of centralised operating systems.

5. Merger & Acquisition strategy focused on enabling our growth strategy through bolt-on acquisitions, which meet the Group's return on investment criteria, to extend our geographic footprint, consolidate our market position and increase the breadth of our services available through our portfolio.

The Board believes this growth strategy will enable the Group to continue to drive sustainable revenue and profit performance over the next five years.

Dividend

The strong performance delivered in FY 2022 continues to give the Board confidence in the future performance of the Company.

In July, the Board announced that it was adopting a distribution policy under which, for the foreseeable future, it will pay annual dividends in excess of 50% of its annual profits after tax subject to market and capital requirements. This total will be split between interim dividends (1/3) (generally to be paid in the month of November) and final dividends (2/3) (generally to be paid in the month of May).

The Board declared an interim dividend for the six months ended 30 April 2022 of 2.6 pence per Ordinary share (the "Interim Dividend"), which amounted to £9.84 million, paid to shareholders on 3 November 2022.

At the same time, the Board was also pleased to announce an additional return of £24.57 million to shareholders by way of a special dividend of 6.5 pence per ordinary share ("Special Dividend"). This was paid to shareholders on 1 September 2022.

The Board has declared a final dividend of 3.00 pence per Ordinary share ("Final Dividend"). This does not exactly correspond to the 2/3 split mentioned above since this year the Company paid a special dividend which, when added to the interim dividend, already exceeded 50% of PBT. When combined with the Interim Dividend of 2.6 pence and the Special Dividend of 6.5 pence, this brings the total dividend for the year ended 31 October 2022 to 12.10 pence per Ordinary share.

Subject to approval at the Company's annual general meeting on 28 April 2023, the Final Dividend will be paid on 12 May 2023 to shareholders listed on the register at the close of business on 21 April 2023. The ex-dividend date will be 20 April 2023.

The Board & Executive Team

There were two changes in the composition of the Board of Directors. On 29 April 2022, Jean-Marcel Denis stepped down from the Board as a Non-executive Director. I would like to extend my sincere thanks and gratitude to Jean-Marcel for his loyal service and continued support to both myself and the Board.

On 13 May 2022 Sigieri Diaz Della Vittoria Pallavicini resigned as an Independent Non-executive Director having joined the Group in June 2021. I would like to extend my thanks to Sigieri and wish him all the best in his future endeavours.

The Board of Directors has worked hard to refresh its membership and believes it has a strong team in place to continue supporting the leadership team in delivering on the Group's long-term growth strategy.

The composition of the Executive Team has also evolved. Christian Autié, has been appointed as COO . on 1 November 2022. Christian was previously the Group's Head of Asia where he held the role for 5 years.

Corporate responsibility

We remain committed to strengthening our Sustainability activity to deliver our goals through inventing eco-responsible local services to support growth by integrating social, environmental, and economic expectations into our strategy and operations. Details of our Sustainability approach and KPIs are available on the Group's website me-group.com.

Looking ahead

We have made great progress during FY 2022 during which most of our key markets continued to recover from the post-COVID impacts, despite the challenging backdrop that is facing so many sectors.

The Group remains highly cash generative and our financial position remains strong, driven by good momentum across the business, leaving the Group well placed to withstand the current macroeconomic headwinds. We are well positioned to deliver on our strategic priorities as we enter FY 2023 which includes the rollout of next-generation multi-service photobooths as well as the continued expansion of our laundry operations and food vending equipment operations, whilst exploring further opportunities in new and existing geographies.

Unless there are major changes to the macroeconomic, the Board remains confident in the Group's long-term growth opportunities and its ability to deliver its key strategic priorities. For the 2023 financial year, the Board expects the Group to achieve revenue between £280 and £300 million, EBITDA between £95 and £105 million and profit before tax between £61 and 65 million.

Sir John Lewis OBE

Non-executive Chairman

28 February 2023

CHIEF EXECUTIVE'S REPORT

BUSINESS REVIEW

Our performance in FY 2022 showed strong recovery particularly within our photobooth operations. We have continued to benefit from our disciplined approach to cost management and our ability to increase pricing, as well as our ongoing marketing activity, all of which have underpinned the recovery in performance. The Group has delivered figures comparable to the performance achieved in 2019. This is despite some continued disruption from COVID-19 in the Period, and the macro-economic challenges impacting business.

We continue with a strategic focus on innovation, R&D and diversification which remain important factors in the Group's long-term growth strategy, ensuring the continued delivery of solutions and services that can address ever-changing consumer needs.

Financial performance

Reported revenue in the Period increased by 21.2% to £259.8 million, compared with £214.4 million in the prior 12 months ended 31 October 2021. This performance was primarily driven by a strong performance across Continental Europe and in the UK & the Republic of Ireland. The Group benefited from a recovery in activity levels from Q2 onwards, particularly for photobooths and laundry services, as well as substantial price increases in Germany and France during H2 2022.

Revenue for Continental Europe was up 22.6% and operating profit up 73.3%, mainly driven by activity in France. In the UK & Republic of Ireland, revenue was up 41.9% and operating profit improved by 132.0%. Activity in Asia Pacific was more subdued, due to pandemic restrictions remaining in place for longer than in the Group's other operating regions, with revenue and operating profit both flat year-on-year.

Profitability improved year-on-year across all regions, benefiting from a recovery in demand, our successful recent restructuring programme to remove unprofitable machines, and an increase in consumer pricing during the year. A breakdown of performance by region is set out in the Review of Performance by Geography.

Reported EBITDA (excluding associates) was £92.2 million, an increase of 41.6%% on the prior 12-month period, which delivered an EBITDA margin of 35.5%.

Reported profit before tax increased by £24.8 million (+86.7%) to £53.4 million (2021: 28.6 million).

Capital expenditure in the Period was £38.2 million, primarily related to Machines costs (£28.2m), Plant and Machinery (£5.1m) and the rest is Intangible assets (Goodwill: £1.7m, R&D: £1.4m, Other Intangibles: £1.7m).

Further detail of the Group's financial performance is set out in the Financial Review.

Funding and liquidity

The Group continues to be highly cash generative. At 31 October 2022, the Group had gross cash of £136.2 million and a net cash balance of £34.0 million. This is net of £0.7 million cash investment in acquisitions and dividends paid during the year which amounted to £35.5 million. We did not have the benefit of any government facilities in the Period.

The Group remains in a strong financial and liquidity position to fund future growth whilst continuing to navigate the broader macroeconomic headwinds.

nnovation and diversification

We are proud of our track record in new product development and our innovative approach, supported by our team of 50 engineers located in our R&D centres situated in France (primary facility) and Vietnam. Our in-house R&D team is continuously working on new product innovation to meet ever-changing customer and consumer needs, providing them with a range of instant service equipment that is modern, convenient and user-friendly.

Our approach to innovation and diversification is focused on two key pillars:

1. A state-of-the-art user experience, backed by the best proprietary technology, including the design of new, intuitive, and modern user interfaces across multiple product categories; the integration of digital payment systems across vending estate; and up-to-date functionalities, through an aggregate of the best of external technology providers

2. An omnichannel approach, leveraging digital functionalities to enhance the user experience of our brands and explore new business models, including the use of a powerful CRM which offers a customised experience to end users; the launch of applications that connect to our machines to offer mobile-to-machine features; the remote management of our self-service vending equipment through a cloud-based infrastructure; multi-service functionality for the next-generation machines; and centralised operating system offers a seamless, connected user experience for the consumer

Overview of principal business areas

Below is an overview of the Group's four principal business areas: Identification (Photo.ME), Laundry (Wash.ME), Kiosks (Print.ME) and Food (Feed.ME). In addition, the Group operates other vending equipment.

Photo.ME

Photobooths and integrated biometric identification solutions

	12 months ended 31 October 2022	12 months ended 31 October 2021
Number of units in operation	27,625	27,867
Percentage of total group vending estate (number of units)	62.9%	63.6%
Revenue	£154.3m	£123.2m
Capex	£3.0m	£5.0m
EBITDA	£54.2m	£36,4m

We saw a strong recovery in photo ID demand for passports and other official documentation restrictions were eased and consumers were able to travel and socialise, as well as other products delivered via our photobooth estate. Notably, demand was strong in Continental Europe, particularly France, from February onwards. The UK showed a similar trend from May onwards, despite the Government's ongoing acceptance of home-taken photos for official documents. The Asia market was subdued due to covid restrictions.

We gradually and successfully implemented price changes in H2 2022. The cost per use of our photobooths increased from €6 to €8 in France (10% of machines remained at €6 per use), and from €8 to €10 in Germany and Austria, which did not have an adverse impact on consumer demand. Subsequently, similar price increases were implemented across most of our operating markets during the second half of the year. We anticipate that the full benefit of these price increases will be evident in FY 2023.

Revenue increased by 25.2% to £154.3 million (2021: £123.2 million), driven largely by the increase in cost per use implemented across the Group's machine estate in certain territories along with increasing post-Covid demand. The average revenue per machine (excluding VAT) increased to £5,586 per year (2021: £4,421 per year).

Subsequently, EBITDA was £54.2 million, and represented 63.8% of Group EBITDA (excluding the property sale). EBITDA was 55.8% of the revenue during the Period.

Overall, this performance is a testament to the resilience and long-term future of our photobooth estate.

Capex in the Period decreased by 40.0% to £3.0 million, reflecting a deferral of investment in next-generation photobooths. The Group began the rollout and installation of next-generation photobooths during Q1 2023, initially with the deployment of 50 units in France. It is the Group's aim to deploy approximately 3,000 next-generation photobooths during FY 2023, with a view of rolling out c.10,000 units over the next three years. Consequently, the Group anticipates that Photo.ME capex will be significantly higher during FY 2023 in the range of £15.0 - £20.0 million. Whilst this is a material increase in capex, we expect our next-generation machines will achieve an attractive return on investment within one year.

At 31 October 2022, the number of photobooths in operation remained broadly flat at 27,625 units (2021: 27,867). Photo.ME operations accounted 62.9% of the Group's total vending units.

Growth strategy

Our photobooths meet the needs of consumers who are required to have official photo ID for documents such as passports and driving licences. This quasi-compulsory service and its strong market position give the Group pricing power for this service. Increasingly governments are seeking to improve and digitise photo ID security to combat fraud and terrorist activity. In addition, consumers are seeking multi-functional instant services through a single vending machine.

Alongside deploying our proven identification security technologies in existing and new countries of operation, we are continuously innovating with the aim of expanding the services available via our next-generation photobooth. This includes fun features and social media sharing functions providing customers with additional, diversified services. We are also targeting new strategic partnerships which will enable us to operate at high-footfall locations, including supermarkets, smaller retail shops and retail parks.

Strategy in action

Since February 2022, our face ID anti-spoofing technology secured compliance recognition under the international Biometrics Presentation Attack Detection standards (ISO/IEC 30107-3) by Cabinet Louis Reynolds (CLR), the French biometrics and security technologies experts. This recognises the Group's anti-spoofing technology, which helps to ensure that all ME Group photobooths are biometrically secure and mitigative against "fake" photo ID for official documents, as credible by regulatory standards.

The Board continues to believe that there are longer-term opportunities in the photo ID market across both existing and new geographic markets. Our new multiservice next-generation photobooth will integrate the consumer journey into specific omnichannel automated services.

Wash.ME

Unattended Revolution laundry services and launderettes

	12 months ended 31 October 2022	12 months ended 31 October 2021
Total Laundry units deployed (owned, sold and acquisitions)	5,924	5,533
Total revenue from Laundry operations	£61.8m	£54.2m
Total Laundry EBITDA	£29.1m	£22.6m
Revolution
(excludes Launderettes and B2B):
- Number of Revolutions in operation*	4,754	4,094
- Percentage of total group vending estate (number of units)	10.8%	9.3%
- Total revenue from Revolutions	£56.7m	£44.8m
- Revolution capex	£20.2m	£15.9m

* There were 4,424 Revolution units in operation through the entirety of the 12 months ended 31 October 2022 compared with 3,765 in 12 months ended 31 October 2021.

Total revenue from our laundry operations grew by 14.0% % to £61.8 million, driven by an increase in the number of Revolution units in operation. At 31 October 2022, the total number of laundry units deployed (owned, sold) was up to 5,924.

La Wash, our Spanish B2B laundry service franchise business, was sold in November 2021. La Wash represented a minor part of the laundry business. Following this disposal, we no longer operate B2B laundry services except for a small level of activity in Ireland.

Continued growth of Revolution laundry operations

In line with our growth strategy, the Group installed an average of 70 machines per month, primarily in Continental Europe and the UK & Republic of Ireland. As a result, the number of units in operation grew by 16.1% to 4,754. Revolution laundry machines accounted for 10.8% of the Group's total estate by number of machines (2021: 9.3%).

Revenue increased by 26.6% to £ 56.7 million, which represented 21.8% of Group revenue. The average revenue per machine (excluding VAT) was £12,816 per year (2021: £11,899 per year). EBITDA was £29.1 million and contributed 34.3% of Group EBITDA (excluding property sales). EBITDA was 34.7% of revenue in the Period.

Revolution capex increased to £20.2 million (2021: £15.9 million) reflecting an increase in production and installation costs, along with the redeployment of selected machines to more profitable locations. Additionally, the Group has entered a period of machine refurbishment and maintenance, the first since we launched our laundry operations in 2012.

Growth strategy

Revolution laundry services remain a key growth driver for the Group and revenue from this business area is expected to continue to increase as a proportion of total Group revenue.

Our strategy is to further expand our operations through new and existing partnerships with site owners in target territories to address consumer demand for convenient and competitively priced high-capacity laundry services. Our R&D teams will also continue to innovate to improve and upgrade our product range and commercialise new formats aimed at specific market segments.

In FY 2023, we plan to invest approx. £23.0 million in Wash.ME and our aim is to increase Revolution installations to 80-90 units per month, targeting a return on investment of approx. 18 months.

Strategy in action

During the Period the Group launched two newly developed laundry machine formats - the Revolution Compact V3 which offers a more environmentally friendly solution by using less energy and detergent, and the Revolution Flex which offers a compact format that can be deployed inside co-living locations.

We continue to innovate and over time we will deploy lower-cost models which will offer substantial savings in production costs and flexibility of deployment, along with improved energy efficiency features that aim to reduce water and electricity consumption.

We have continued to deliver on our sustainability commitment and reduce our impact on the environment. To date, we have installed 223 Photovoltaic solar panels on Revolution units primarily in France and expect to roll this out into other geographies in time.

Our strategy to expand existing and secure new long-term partnerships with site owners has enabled us to expand our Revolution estate in the key UK market and extend our footprint across major, high-footfall locations bringing our laundry services to even more existing and potential customers. We have begun pilot testing of our new indoor and outdoor "Flex" laundry machine format. We believe there is a large-scale opportunity in the European market for this compact machine format.

Print.ME

High-quality digital printing services

	12 months ended 31 October 2022	12 months ended 31 October 2021
Number of units in operation	4,785	5,173
Percentage of total group vending estate (number of units)	10.9%	11.8%
Revenue	£10.7m	£11.7m
Capex	£1.3m	£0.5m
EBITDA	£3.6m	£3.4m

Our estate of digital printing kiosks offers a wide range of competitively priced print formats and personalised products. Our key markets are France, where most machines are situated, the UK and Switzerland.

At 31 October 2022 the Group had 4,785 kiosks in operation, down 7.5% compared with the prior year. Kiosks accounted for 10.9% of the total number of vending units in operation.

Revenue decreased slightly to £10.7 million from £11.7 million in the prior year, due to a reduction in the number of digital printing kiosks in operation, following the removal of unprofitable machines. Print.ME revenue represented 4.6% of Group revenue. EBITDA was £3.6 million and contributed 4.2% of Group EBITDA in the Period.

The average revenue per machine (excluding VAT) was £2,279 per year (2021: £2,146).

Capex for the Period was £1.3 million in line with our strategy to focus our investment on expanding our growing Wash.ME and Feed.ME businesses during FY 2022. During the second half of the year, this capex was invested in 500 new kiosks to refresh our machine portfolio in France. The replacement of machines began in H2 2022 and will complete during H1 2023. The expected return on investment is 18 months and the benefit is expected to be evident in FY 2023.

Growth strategy

There remains demand for high-quality printing services reflecting the increased use of smartphones and digital sharing across social media networks. Print.ME's convenient, affordable and easy-to-use instant printing services enable consumers to print direct from smart devices.

The Group is considering opportunities to further extend its digital kiosk services offered through its instant-service machine network, as well as a focus on identifying product partnership opportunities within existing territories. Our next generation photobooths are multi-functional and will have similar functions as our digital printing kiosks, in line with our innovation and diversification plan for our services.

Feed.MEVending equipment for the food service market

Feed.ME business model is different from our other business areas. It is primarily based on equipment sales, and on a smaller scale on operating machines in Japan (214 orange juice machines). There is currently no significant capex requirement for this business area.

Our food vending equipment operations, which further diversify our vending services, are the Group's newest business area. Activities are focused on (i) self-service fresh fruit juice equipment market and (ii) pizza vending machines aimed at the B2B retail and hospitality markets. The Group currently has such operations in Belgium, France, Japan and Switzerland.

The Group sells its vending equipment to customers, typically with a maintenance agreement for the Group to service the equipment. Customers typically (but not exclusively) choose to enter into a sale and leaseback arrangement with a third-party financing company for a period of 15 months for fruit juice machines and five years for pizzas machines. At the end of a sale and leaseback contract, the Group has the option to buy the machine back and to refurbish it. The machine can then be sold again. The renewal rate for existing customers is over 70%. The Group does not operate food vending equipment in Japan except for fresh fruit juice vending machines.

Revenue solely from the sale of equipment was £9.9 million, adding other revenue (£2.6m), the total revenue of Feed.ME is £12.5m which reflected the good strategic progress made in the Period. This business area contributed 4.8% of total Group revenue.

EBITDA was £3.4 million and contributed 4.0% of Group EBITDA (excluding the property sale).

Growth strategy

There is a growing demand for vending services within the food sector, particularly for fresh fruit juice and pizza. Our growth strategy is built around new product innovation and is focused on three key areas (i) expanding our presence in the self-service fruit juice equipment market, (ii) establishing a larger presence in the pizza-vending equipment market, and (iii) building new partnerships with site owners to sell or deploy food vending equipment.

Strategy in action

· Fresh Fruit Juice equipment

Our new product innovation capabilities have enabled us to further expand our presence in the self-service fruit juice equipment market through a wider variety of self-service fresh juice options. We have installed new professional apple, pineapple and grape juice vending machines in France, Belgium and Japan, as part of our juice wall concept. The orange juice vending model in Japan continued to grow with very satisfying results. There are now 214 machines active in Japan which are operated by ME Group, the only geography where the Group does operate food vending equipment.

Following delays due to the pandemic, the Group's professional apple and pineapple machines were installed across France and Belgium. Furthermore, nine of the Group's innovative 'juice wall concept' were deployed in the Period, which offers consumers different fruit juice options.

· Pizza vending equipment

Our pizza vending machines, which are sold to site owners, offer consumers ready to eat pizza in four minutes available 24 hours a day, seven days a week. In line with our strategy, we accelerated the rate of machine sales during the year to an average of 20 machines per month in France. We have started to deploy further machines in Spain, Belgium and the Netherlands in the second half of the year.

In May we announced a new technological partnership with Digitiz.me, a ground-breaking digital platform, enabling the Group to accelerate development in the fast-growing connected food vending market. Through this new partnership, omnichannel software offering an all-in-one complete solution will be rolled out across all ME Group pizza vending equipment to offer consumers an easy and integrated experience, whilst also improving our ability to remotely manage units. We believe this will revolutionise the way our food vending machines function and deliver value for our partners. The deployment of this technology will start in H1 2023.

We continue to invest in new product innovation to enhance our product range. In June, we launched our second-generation pizza kiosk, which is aimed at the independent pizziaolos market as well as global hypermarket key accounts. In October, we launched 64-pizza Muliquattro V3 and 96-pizza capacity kiosks. These new design machines, and our new industrialisation process, have enabled us to decrease production costs and optimise logistics costs. The Group has started with the development of a new pizza vending machine unit, offering a smaller one-pizza format designed for more compact locations.

Our strategy is to enhance our presence in the pizza vending equipment market, with the aim of becoming a leader in the European market. We are also exploring new business models and opportunities to accelerate expansion of our presence in the growing food service vending equipment market.

Other vending equipment

At 31 October 2022, the Group operated 6,483 (2021: 6,624) other vending units in addition to our four principal business areas. This included 2,489 children's rides (Amuse.ME), 3,456 photocopiers (Copy.ME) and 538 other miscellaneous machines.

These machines are typically located in high-footfall locations alongside the Group's principal activities, thereby benefiting from existing site owner relationships and operating synergies. The Group will continue to operate other vending units where profitable.

Other vending equipment accounted for 15.3% of the Group's total vending estate by number of units, down 0.2% compared to the previous year and represented 2.0% of the total Group revenue.

REVIEW OF PERFORMANCE BY GEOGRAPHY

Commentary on the Group's financial performance is set out below, in line with the segments as operated by the Board and the management of the Group. These segmental breakdowns are consistent with the information prepared to support the Board's decision-making. Some commentary below relates to the performance of specific products in the relevant geographies.

Vending units in operations

	At October 2022		At October 2021
	Number	% of total	Number	% of total
	of units	estate	of units	estate
Continental Europe	25,331	57.7%	25,111	57.3%
UK & Republic of Ireland	6,858	15.6%	7,238	16.5%
Asia Pacific	11,721	26.7%	11,468	26.2%
Total	43,910	100%	43,817	100%

As expected, the total number of vending units in operation at 31 October 2022 increased slightly 0.2% to 43,910 compared with the prior year (2021: 43,817), reflecting the Group's strategy to remove unprofitable machines as part of the restructuring programme initiated in April 2021. This was compensated by the number of new installations.

Key financials

The Group reports its financial performance based on three geographic regions of operation: (i) Continental Europe; (ii) the UK & Republic of Ireland; and (iii) Asia Pacific.

Revenue by geographic region

	12 months ended 31 October 2022	12 months ended 31 October 2021

Continental Europe	£177.8m	£145.0m
UK & Republic of Ireland	£42.0m	£29.6m
Asia Pacific	£39.9m	£39.8m
Total	£259.7m	£214.4m

Operating profit by geographic region

	12 months ended 31 October 2022	12 months ended 31 October 2021

Continental Europe	£51.3m	£29.6m
UK & Republic of Ireland	£11.6m	£5.0m
Asia Pacific	£2.0m	£2.0m
Corporate costs	£(8.1)m	£(7.3)m
Total	£56.8m	£29.3m

The Group delivered a 21.2% increase in total revenue to £259.8 million driven by recovering markets, price increases as well as the successful completion of the Group's restructuring programme.

Operating revenue evolution (last 12 months by quarter)

The table below provides a detailed breakdown of changes in operating revenue by geographic region and business area for the Period, compared with the similar period in the 12 months ended 31 October 2022.

Operating revenue is sales revenue generated by vending units, less VAT. It excludes sales of machines and parts and other ancillary revenue streams.

	Nov 2021	Feb 2022	May 2022	Aug 2022
	to Jan 2022	to Apr 2022	to Jul 2022	to Oct 2022	Total

CONTINENTAL EUROPE
Photo.ME	40.7%	38.4%	29.2%	30.2%	33.4%
Print.ME	(13.2)%	(6.7)%	5.0%	0.2%	(4.2)%
Wash.ME	32.2%	30.9%	19.8%	12.2%	21.9%
Other Vending and Feed.ME	(25.9)%	2.8%	4.3%	(13.2)%	(9.3)%
Total	28.1%	31.3%	24.5%	21.7%	25.7%


UK & REPUBLIC OF IRELAND
Photo.ME	85.5%	127.3%	76.4%	26.4%	72.9%
Print.ME	(17.8)%	(73.8)%	(78.6)%	(73.6)%	(58.4)%
Wash.ME	49.4%	39.3%	32.0%	19.9%	34.0%
Other Vending and Feed.ME	93.8%	109.1%	37.8%	7.5%	46.7%
Total	63.2%	81.6%	52.3%	20.4%	50.5%


ASIA PACIFIC
Photo.ME	2.0%	(28.1)%	(5.1)%	20.8%	(6.4)%
Print.ME	(6.0)%	(19.7)%	(10.9)%	(12.5)%	(12.5)%
Wash.ME	78.6%	83.3%	63.4%	30.8%	60.5%
Other Vending and Feed.ME	524.0%	71.6%	(599.5)%	910.5%	510.9%
Total	8.7%	-22.8%	11.6%	36.8%	3.6%


TOTAL
Photo.ME	31.4%	18.7%	25.3%	27.7%	25.4%
Print.ME	(13.4)%	(11.6)%	0.3%	(4.0)%	(7.5)%
Wash.ME	37.5%	33.3%	22.7%	14.2%	25.2%
Other Vending and Feed.ME	41.7%	47.0%	169.1%	82.1%	76.9%
Total	29.3%	20.9%	26.0%	23.7%	24.7%

Continental Europe

Continental Europe is the Group's largest region by both number of machines and contribution to Group revenue.

Revenue increased 22.6% to £177.8 million driven by a strong recovery in photobooth and laundry activity throughout the Period. Kiosk demand improved in Q3 and Q4. Operating revenue for Photo.ME was up 33.6%, Wash.ME was up 12.2% and Print.ME up 4.6%. Operating profit increased by £21.7 million to £56.8 million.

France performed particularly strongly, benefiting from the recovery in activity alongside an increase in consumer pricing.

In April 2022, the Group sold an office building for £7.1 million, which had a positive impact on the region's operating profit.

In November 2021 we sold La Wash, our Spanish B2B laundry service franchise business at a loss of £(0.5) million. This item was not included in Continental Europe's operating profit but was reported in other net gains and losses, below operating profit.

At 31 October2022, 25,331 units were in operation in Continental Europe which represented 57.7% of the Group's total estate. Continental Europe contributed 68.5% of total Group revenue.

UK & Republic of Ireland

Revenue in the UK & the Republic of Ireland grew by 41.9% to £42.0 million driven by a strong recovery in photobooth and laundry activity in the second half of the year, the Group's key business areas in the region. The significant increase in demand for photo ID for passports and official documents led to a 70.2% increase in Photo.ME operating revenue in the Period. Wash.ME performance was consistently strong, with operating revenue growth delivered each quarter which resulted in operating revenue for the year up 19.0%. The Group's other vending equipment in the region benefited from increased footfall matches in the second half of the year, following the lifting of pandemic restrictions.

Profitability in the region improved, with an operating profit of £ 11.6 million, compared to £ 5.0 million in the prior year. This performance reflected the successful restructuring programme in the region (completed in April 2021), which included the removal of unprofitable machines and bolstering of the management team in the region.

As at 31 October 2022, there were 6,858 units in operation in the UK & Republic of Ireland, a decrease of 5.3%, representing 15.6% of the Group's total vending estate.

Asia Pacific

The Group's operations continued to be impacted by extended COVID-19 restrictions which severely limited consumer demand, notably in Japan and China. This particularly affected photobooth activity, our largest business area in the region, with Photo.ME operating revenue down 6.5% compared to the prior year. Our laundry operations were more resilient with operating revenue up 50.0% year-on-year.

Despite these challenges, revenue in the region grew slightly by 0.3% to £39.9 million whilst operating profit was flat year-on-year at £2.0 million.

As at 31 October 2022, there were 11,721 units in operation which represented 26.7% of the Group's total vending estate.

In October, Japan eased restrictions and since then trading has started to rebound as anticipated.

Key performance Indicators (KPIs)

The Group measures its performance using different types of indicators. The main objective of these KPIs is to monitor the Group's cash generation, long-term profitability, preservation of the value of its assets, and of returns to shareholders.

Description	Relevance	Performance
		12 months ended 31 October	12 months ended 31 October
		2022	2021
Total Group revenue at actual rate of exchange		£259.8m	£214.4m
Group Profit before tax		£53.4m	£28.6m
Increase in number of photobooths		(242)	679
Increase in number of Laundry units (operated)	The increase in number of Revolutions is a constant priority and a main driver for growth	660	657

PRINCIPAL RISKS

Similar to any business, the Group faces risks and uncertainties that could impact the achievement of the Group's strategy.

These risks are accepted as inherent to the Group's business. The Board recognises that the nature and scope of these risks can change; it therefore regularly reviews the risks faced by the Group as well as the systems and processes to mitigate them.

The table below sets out what the Board believes to be the principal risks and uncertainties, their impact, and actions taken to mitigate them.

Economic

Nature of risk	Description and impact	Mitigation
COVID-19	COVID-19 has continued to cause disruption to worldwide markets and supply chains, including those that ME Group operates within.	The Group continues to monitor the COVID-19 situation closely and update its practices in line with government guidelines and other relevant guidance. The pandemic cleaning regime continues, to help reduce the risk of cross contamination between the Company's customers. Measures taken include providing employees with face shields, surgical masks, gloves, hand sanitiser. The cleaning equipment additions such as SD90 and DEW remain in use.
Global economic conditions	Economic growth has a major influence on consumer spending. A sustained period of economic recession and a period of high inflation could lead to a decrease in consumer expenditure in discretionary areas.	The Group focuses on maintaining the characteristics and affordability of its needs-driven products. Like most businesses around the world, the Group has had to face a significant increase in supply chain and raw material costs, however, its strong position in the markets in which it operates gives the Group significant pricing power. The Group has no exposure to the invasion of Ukraine by Russia.
Volatility of foreign exchange rates	The majority of the Group's revenue and profit is generated outside the UK, and the Group's financial results could be adversely impacted by an increase in the value of sterling relative to those currencies.	The Group hedges its exposure to currency fluctuations on transactions, as relevant. However, by its nature, in the Board's opinion, it is very difficult to hedge against currency fluctuations arising from translation in consolidation in a cost-effective manner.

Regulations

Nature of risk

Description and impact

Mitigation

Centralisation of the production of ID photos

In many European countries where the Group operates, if governments were to implement centralised image capture, for biometric passport and other applications, or widen the acceptance of self-made or home-made photographs for official document applications, the Group's revenues and profits could be affected.

The Group has developed new systems that respond to this situation, leveraging 3D technology in ID security standards, and securely linking our booths to the administration repositories. Solutions are in place in France, Ireland, Germany, Switzerland and the UK; discussions in Belgium and the Netherlands.

Furthermore, the Group also ensures that its ID products remain affordable and of a high-quality.

Brexit

The UK left the EU on 31 January 2020. This has led to changes in the UK regulations as modifications to numerous arrangements between the UK and other members of the EU and EEA, affecting trade and customs conditions, taxation, movements of resources, among other things.

The Board is continually reviewing the potential impact on the Group's operations following the UK's leaving the EU.

Any potential developments, including new information and policy indications from the UK Government and the EU, is scrutinised with a view to enhancing the Group's ability to take appropriate action targeted at managing and, where possible, minimising adverse repercussions of Brexit.

The business carried out post-transition impact assessments to include all customs documentation, licences, permits, consents, certificates, rules of origin, commodity codes, and delays at the borders.

The Board foresees that in the short-term the negative impact of the uncertainty overshadowing the general UK economy could spill over into the Group's UK operations.

Strategic

Nature of risk	Description and impact	Mitigation
Identification of new business opportunities	The failure to identify new business areas may impact the ability of the Group to grow in the long-term.	Management teams constantly review demand in existing markets and potential new opportunities. The Group continues to invest in research in new products and technologies. Furthermore, the Group also ensures that its ID products remain affordable and of a high-quality.
Inability to deliver anticipated benefits from the launch of new products	The realisation of long-term anticipated benefits depends mainly on the continued growth of the laundry and food businesses and the successful development of integrated secure ID solutions.	The Group regularly monitors the performance of its entire estate of machines. New technology-enabled secure ID solutions are heavily trialled before launch and the performance of operating machines is continually monitored.

Market

Nature of risk

Description and impact

Mitigation

Commercial relationships

The Group has well-established, long-term relationships with a number of site-owners. The deterioration in the relationship with, or ultimately the loss of, a key account would have an adverse, albeit contained, impact on the Group's results, bearing in mind that the Group's turnover is spread over a large client base and none of the accounts represent more than 2% of Group turnover.

To maintain its performance, the Group needs to have the ability to continue trading in good conditions in France and the UK, taking into account the situation in these two countries.

The Group's major key relationships are supported by medium-term contracts. The Group actively manages its site-owner relationships at all levels to ensure a high quality of service.

The Group continues to monitor the situation in both the French and the
UK markets.

Operational

Nature of risk	Description and impact	Mitigation
Reliance on foreign manufacturers	The Group sources most of its products from outside the UK. Consequently, the Group is subject to risks associated with international trade.	Extensive research is conducted into quality and ethics before the Group procures products from any new country or supplier. The Group also maintains very close relationships with both its suppliers and shippers to ensure that risks of disruption to production and supply are managed appropriately.
Reliance on one single supplier of consumables	The Group currently buys all its paper for photobooths from one single supplier. The failure of this supplier could have a significant adverse impact on paper procurement.	The Board has decided to hold a strategic stock of paper, allowing for 6-9 months' worth of paper consumption, to allow enough time to put in place alternative solutions.
Reputation	The Group's brands are key assets of the business. Failure to protect the Group's reputation and brands could lead to a loss of trust and confidence. This could result in a decline in our customer base.	The protection of the Group's brands in its core markets is sustained with certain unique features. The appearance of the machine is subject to high maintenance standards. Furthermore, the reputational risk is diluted as the Group also operates under a range of brands.
Product and service quality	The Board recognises that the quality and safety of both its products and services are of critical importance and that any major failure will affect consumer confidence.	The Group continues to invest in its existing estate, to ensure that it remains contemporary, and in constant product innovation to meet customer needs. The Group also has a programme in place to regularly train its technicians.

Technological

Nature of risk	Description and impact	Mitigation
Failure to keep up with advances in technology	The Group operates in fields where upgrades to new technologies are critical.	The Group mitigates this risk by continually focusing on R&D.
Cyber risk: Third party attack on secure ID data transfer feeds	The Group operates an increasing number of photobooths capturing ID data and transferring these data directly to government databases.	The Group undertakes an ongoing assessment of the risks and ensures that the infrastructure meets the security requirements.

Serge Crasnianski

Chief Executive Officer & Deputy Chairman

28 February 2023

GROUP FINANCIAL STATEMENTS

Group Statement of Comprehensive Income

For the 12 months ending 31 October 2022

		31 October	31 October
		2022	2021
	Notes	£ '000	£ '000
Revenue	3	259,780	214,404
Cost of Sales		(178,377)	(161,467)
Gross Profit		81,403	52,937
Other Operating Income	4	7,916	317
Administrative Expenses		(32,638)	(23,919)
Operating Profit		56,681	29,335
Other net (losses) / gains	4	(1,176)	1,998
Finance Income	6	-	177
Finance Cost	6	(2,151)	(2,955)
Profit before Tax	3	53,354	28,555
Total Tax Charge	7	(14,561)	(6,703)
Profit for the year		38,793	21,852

Other Comprehensive Income
Items that are or may subsequently be classified to Profit and Loss:
Exchange Differences Arising on Translation of Foreign Operations		829	(6,987)
Total Items that are or may subsequently be classified to profit and loss		829	(6,987)
Items that will not be classified to profit and loss:
Remeasurement gains in defined benefit obligations and other post-employment benefit obligations		1,151	560
Deferred tax on remeasurement gains		(248)	(94)
Total Items that will not be classified to profit and loss		903	466
Other comprehensive income / (expense) for the year net of tax		1,732	(6,521)
Total Comprehensive income for the year		40,525	15,331

Profit for the Year Attributable to:
Owners of the Parent		38,793	21,713
Non-controlling interests		-	139
		38,793	21,852

Total comprehensive income attributable to:
Owners of the Parent		40,525	15,192
Non-controlling interests		-	139
		40,525	15,331

Earnings per Share
Basic Earnings per Share	10	10.26p	5.78p
Diluted Earnings per Share	10	10.23p	5.77p

All results derive from continuing operations.

The notes on pages 121 to 193 of the Annual Report 2022 are an integral part of these Group financial statements

Group Statement of Financial Position

As at 31 October 2022

		Group
		31 October	31 October
		2022	2021
			(Restated)
	Notes	£'000	£'000
Assets
Goodwill	11	17,116	15,305
Other intangible assets	11	15,620	19,988
Property, plant & equipment	12	101,090	91,973
Investment property	13	592	597
Investment in associates	14	21	21
Financial instruments held at FVTPL	15	5,239	1,501
Other receivables	16	1,974	1,868
Non-Current Assets		141,652	131,253
Inventories	17	25,491	18,458
Trade and other receivables	16	20,050	22,452
Current tax		2,990	1,417
Cash and cash equivalents	18	136,185	99,362
Current assets		184,716	141,688
Total assets		326,368	272,941

Equity
Share capital	20	1,889	1,889
Share premium		10,627	10,599
Translation and other reserves		11,159	9,435
Retained earnings		108,974	106,051
Equity attributable to owners of the Parent		132,649	127,974
Non-controlling interests		-	1,720
Total Shareholders' funds		132,649	129,694

Liabilities
Financial liabilities	21	82,429	55,058
Post-employment benefit obligations	22	3,850	4,933
Deferred tax liabilities	24	7,760	9,362
Provisions	23	-	338
Non-current liabilities		94,039	69,691
Financial liabilities	21	35,657	25,877
Provisions	23	1,567	1,828
Current tax		10,208	3,367
Trade and other payables	25	52,248	42,484
Current liabilities		99,680	73,556
Total equity and liabilities		326,368	272,941

The notes on pages 121 to 193 of the Annual Report 2022 are an integral part of these Group financial statements

The accounts were approved by the Board on 28 February 2023 and signed on its behalf by:

Serge Crasnianski Sir John Lewis OBE

Director (Chief Executive Officer) Non-executive Chairman (Director)

Registration number: 00735438

Company Statement of Financial Position

As at 31 October 2022

		Company
		31 October	31 October
		2022	2021
	Notes	£'000	£'000
Assets
Other intangible assets	11	5	-
Property, plant & equipment	12	15,364	10,933
Investment in subsidiaries	14	44,468	46,901
Financial instruments held at FVTPL	15	789	1,292
Non-current assets		60,841	59,125
Inventories	17	1,830	1,492
Trade and other receivables	16	23,142	19,454
Cash and cash equivalents	18	13,321	4,002
Current tax		1,205	583
Current assets		39,498	25,531
Total assets		100,340	84,656

Equity
Share capital	20	1,889	1,889
Share premium		10,627	10,599
Translation and other reserves		2,728	2,207
Retained earnings		68,743	46,405
Total Shareholders' funds		83,987	61,100

Liabilities
Financial liabilities	21	741	1,727
Non-current liabilities		741	1,727
Financial liabilities	21	1,060	830
Trade and other payables	25	14,552	20,999
Current liabilities		15,612	21,829
Total equity and liabilities		100,340	84,656

The notes on pages 121 to 193 of the Annual Report 2022 are an integral part of these financial statements.

The Company recognised a profit after tax for the period of £57,824,000 (2021: profit of £785,000).

The accounts were approved by the Board on 28 February 2023 and signed on its behalf by:

Serge Crasnianski Sir John Lewis OBE

Director (Chief Executive Officer) Non-executive Chairman (Director)

Registration number: 00735438

Group Statement of Cash Flows

For the period ended 31 October 2022

		31 October 2022	31 October 2021
	Notes	£'000	£'000
Cash flow from operating activities
Profit before tax		53,354	28,555
Finance costs		794	697
Interest of lease liabilities		1,357	2,258
Finance income		-	(177)
Other gains		1,176	(1,998)
Operating profit		56,681	29,335
Amortisation and impairment of intangible assets	4	6,772	5,419
Depreciation and impairments of property,plant and equipment	4	28,791	30,328
Profit on sale of property, plant and equipment		(7,490)	(368)
Exchange differences		(594)	(355)
Movements in provisions		(809)	400
Other non cash items		(432)	680
Changes in working capital:
Inventories		(7,033)	(1,847)
Trade and other receivables		2,295	(5,780)
Trade and other payables		9,764	8,278
Cash generated from operations		87,945	66,090
Interest paid		(2,151)	(2,956)
Taxation paid		(10,895)	(9,269)
Net cash generated from operating activities		74,899	53,865
Cash flows from investing activities
Acquisition of subsidiaries	29	(739)	(10,133)
Proceeds from disposal of subsidiaries		152	1,050
Investment in intangible assets		(2,486)	(2,529)
Proceeds from sale of intangible assets		71	-
Purchase of property, plant and equipment		(32,670)	(26,376)
Proceeds from sale of property, plant and equipment		8,997	3,904
Investment in financial instruments		(4,450)	-
Interest received		-	73
Dividends received from associates		-	104
Net cash in investing activities		(31,125)	(33,907)
Cash flows from financing activities
Issue of ordinary shares to equity shareholders		28	-
Acquisition of minority interest		(2,985)	-
Repayment of principal of leases	19	(6,196)	(4,600)
Repayment of borrowings	19	(24,622)	(22,365)
Increase in borrowings	19	61,773	5,093
Decrease in assets held to maturity / held at amortised cost	19	-	25
Dividends paid to owners of the Parent	9	(35,497)	-
Net cash utilised in financing activities		(7,499)	(21,847)
Net interest / (decrease) in cash and cash equivalents		36,275	(1,889)
Cash and cash equivalents at beginning of year		99,362	107,177
Exchange loss on cash and cash equivalents		548	(5,926)
Cash and cash equivalents at end of year		136,185	99,362

The notes on pages 121 to 193 of the Annual Report 2022 are an integral part of these Group financial statements.

Company Statement of Cash Flows

For the period ended 31 October 2022

		31 October 2022	31 October 2021
	Notes	£'000	£'000
Cash flow from operating activities
Profit before tax		57,111	2,050
Finance costs		-	36
Interest of lease liabilities		209	247
Finance income		(15)	(76)
Dividends received		(56,511)	-
Other losses		914	311
Operating profit		1,708	2,568
Depreciation and impairments of property,plant and equipment		2,123	3,436
(Loss) / gain on sale of property, plant and equipment		(110)	31
Non cash movement in investment of subsidary		2,956	-
Other non cash items		(125)	(848)
Changes in working capital:
Inventories		(338)	(230)
Trade and other receivables		(3,676)	5,455
Trade and other payables		(6,448)	(3,362)
Cash (utilised in)/ generated from operations		(3,911)	7,049
Interest paid		(194)	(283)
Taxation paid		(125)	(2,373)
Net cash (utilised in) / generated from operating activities		(4,230)	4,394
Cash flows from investing activities
Acquisition of subsidiaries		-	(2,440)
Proceeds from disposal of subsidiaries		-	1,050
Purchase of property, plant and equipment		(7,095)	(4,387)
Investment in intangible assets		(5)	-
Proceeds from sale of property, plant and equipment		450	450
Dividends received from associates and subsidaries		56,511	76
Net cash generated from / (utilised in) investing activities		49,862	(5,251)
Cash flows from financing activities
Issue of ordinary shares to equity shareholders		28	-
Repayment of principal of leases		(844)	(1,020)
Dividends paid to owners of the Parent		(35,497)	-
Net cash utilised in financing activities		(36,313)	(1,020)
Net increase / (decrease) in cash and cash equivalents		9,319	(1,877)
Cash and cash equivalents at beginning of year		4,002	5,879
Cash and cash equivalents at end of year		13,321	4,002

The notes on pages 121 to 193 of the Annual Report 2022 are an integral part of these Group financial statements.

Group Statement of Changes in Equity

For the period ended 31 October 2022

	Share capital £'000	Share premium £'000	Other reserves £'000	Translation reserve £'000	Retained earnings £'000	Attributable to owners of the Parent £'000	Non-controlling interests £'000	Total £'000
At 1 November 2020	1,889	10,599	1,781	14,533	83,379	112,181	1,689	113,870
Profit for the period	-	-	-	-	21,713	21,713	139	21,852
Other comprehensive (expense)/income:
Exchange differences	-	-	-	(6,879)	-	(6,879)	(108)	(6,987)
Remeasurement losses in defined benefit pension scheme and other post-employment benefit obligations	-	-	-	-	560	560	-	560
Deferred tax on remeasurement gains	-	-	-	-	(94)	(94)	-	(94)
Total other comprehensive (expense) / income	-	-	-	(6,879)	466	(6,413)	(108)	(6,521)
Total comprehensive (expense) / income	-	-	-	(6,879)	22,179	15,300	31	15,331
Transactions with owners of the Parent:
Share options	-	-	-	-	493	493	-	493
Dividends	-	-	-	-	-	-	-	-
Total transactions with owners of the Parent	-	-	-	-	493	493	-	493
At 31 October 2021	1,889	10,599	1,781	7,654	106,051	127,974	1,720	129,694
At 1 November 2021	1,889	10,599	1,781	7,654	106,051	127,974	1,720	129,694
Profit for the period	-	-	-	-	38,793	38,793	-	38,793
Other comprehensive (expense)/income:
Exchange differences	-	-	-	840	-	840	(11)	829
Remeasurement losses in defined benefit pension scheme and other post-employment benefit obligations	-	-	-	-	1,151	1,151	-	1,151
Deferred tax on remeasurement gains	-	-	-	-	(248)	(248)	-	(248)
Total other comprehensive (expense) / income	-	-	-	840	903	1,743	(11)	1,732
Total comprehensive (expense) / income	-	-	-	840	39,696	40,536	(11)	40,525
Transactions with owners of the Parent:
Shares issued in the period	-	28	-	-	-	28	-	28
Share options	-		884	-	-	884	-	884
Dividends	-	-	-	-	(35,497)	(35,497)	-	(35,497)
Acquisition of minority	-	-	-	-	(1,276)	(1,276)	(1,709)	(2,985)
Total transactions with owners of the Parent	-	28	884	-	(36,773)	(35,861)	(1,709)	(37,570)
At 31 October 2022	1,889	10,627	2,665	8,494	108,974	132,649	-	132,649

The notes on pages 121 to 193 of the Annual Report 2022 are an integral part of these Group financial statements.

Company Statements of Changes in Equity

For the period ended 31 October 2022

	Share capital £'000	Share premium £'000	Other reserves £'000	Retained earnings £'000	Total £'000
At 1 November 2020	1,889	10,599	2,207	45,632	60,327
Profit for the period	-	-	-	785	785
Other comprehensive gain	-	-	-	(12)	(12)
Total other comprehensive gain	-	-	-	(12)	(12)
Total comprehensive income for the period	-	-	-	773	773
At 31 October 2021	1,889	10,599	2,207	46,405	61,100
At 1 November 2021	1,889	10,599	2,207	46,405	61,100
Profit for period	-	-	-	57,824	57,824
Other comprehensive expense	-	-	-	11	11
Total other comprehensive gain	-	-	-	11	11
Total comprehensive gain	-	-	-	57,835	57,835
Transactions with owners of the Parent
Shares issued in the period	-	28	-	-	28
Capital contributions relating to share-based payments (net)	-	-	521	-	521
Dividends	-	-	-	(35,497)	(35,497)
Total transactions with the Parent	-	28	521	(35,497)	(34,948)
At 31 October 2022	1,889	10,627	2,728	68,743	83,987

Notes to the Financial Statements

General information

Me Group International plc (the "Company") is a public limited company incorporated and registered in England and Wales and whose shares are quoted on the London Stock Exchange, under the symbol MEGP. The registered number of the Company is 735438 and its registered office is at Unit 3B, Blenheim Rd, Epsom, KT19 9AP.

The principal activities of the Group continue to be the operation, sale, and servicing of a wide range of instant-service equipment. The Group operates coin-operated automatic photobooths for identification and fun purposes, and a diverse range of vending equipment, including digital photo kiosks, laundry machines, and business service equipment, and amusement machines.

Authorisation of the financial statements and statement of compliance with IFRSs

The Group and the Company financial statements of Me Group International plc (the "Company") for the period ended 31 October 2022 were authorised for issue by the Directors on 28 February 2023 and the statements of financial position were signed by Mr Serge Crasnianski, Chief Executive Officer and Sir John Lewis OBE, Non-executive Chairman.

The financial statements have been prepared in accordance with UK-adopted international accounting standards and in conformity with the requirements of the Companies Act 2006.

Change of company name

On 1 August 2022 the Company changed its name from Photo-Me International Plc to Me Group International Plc. On the same date, the Company's London Stock Exchange symbol changed from PHTM to MEGP.

1 ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the Group's consolidated financial statements and the Company's individual financial statements are set out below. The policies have been consistently applied, unless otherwise stated, to all of the statements presented. New standards adopted for this financial period are shown in note 2 on page 133 of the Annual Report 2022.

1.1 BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards under the historical cost convention except for certain financial instruments held at FVTPL.

Going concern

The financial statements of the Group and the Parent Company have been prepared on the going concern basis.

In reaching this conclusion, the Directors have reviewed detailed budgets, which reflect, where applicable, the current economic conditions, with regard to the level of demand for the Group's and Parent Company's produced equipment, the level of consumer confidence including the potential prolonged impact of the COVID 19 pandemic and cash flow forecasts for at least the next twelve months.

Directors assessed the Group's and Parent Company's going concern by stress testing four scenarios and their projected financial impact over a five-year period. The Directors' have used the five-year business plan in this assessment which covers a period of 12 months for the assessment of going concern and a period of five years for the assessment of viability. The following scenarios were tested:

Scenario 1:

The budget, elaborated with each country manager and validated by the top management, which we consider as the best scenario.

Scenario 2:

The "most likely scenario" is based on the budget, but with the following sensitivities:

· A 10% decrease in machine installations due to supply chain issues,

· A 5% price increase in spare parts and consumables

· A 10% increase in paper costs

· A 1% drop in total revenue due to loss of key accounts

· A 2% drop in revenue due to the ongoing COVID pandemic.

· This scenario does not consider the potential impact of new regulations regarding photo identification or permission of selfies as official photos within the five year forecast.

Scenario 3:

The "mild" scenario is based on the budget, but with the following sensitivities:

· A 20% decrease in machine installations due to supply chain issues,

· A 10% price increase in spare parts and consumables

· A 20% increase in paper costs

· A 1% drop in total revenue due to loss of key accounts

· A 3% drop in revenue due to the ongoing COVID pandemic.

· Revenue is reduced by 2% each year due to the potential impact of new regulations regarding photo identification or permission of selfies as official photos.

Scenario 4:

The "worst case" scenario is based on the budget, but with the following sensitivities:

· A 30% decrease in machine installations due to supply chain issues,

· A 20% price increase in spare parts and consumables

· A 30% increase in paper costs

· A 3% drop in total revenue due to loss of key accounts

· A 5% drop in revenue due to the ongoing COVID pandemic.

· Revenue is reduced by 5% each year due to the potential impact of new regulations regarding photo identification or permission of selfies as official photos.

In all four scenarios, exchange rate assumptions are as per the budget. The forecasts assume payment of dividends in line with the groups policy.

In all four scenarios tested, the Group continues to comply with its bank covenants and loan repayment terms and is in a strong financial position after five years.

Management do not expect the Ukrainian conflict to have any impact on the business. The group has no activity in this region.

Management does not consider interest rate risk to be a threat to the Group's going concern, as all current debt is at fixed rates and the forecasts indicate no requirement for new debt facilities.

As a result, the cash flow projections indicate that the Group and the Parent Company will remain within their available banking facilities over the 12 months from signing these financial statements. Additional information on these facilities is provided in note 15.

Critical accounting estimates and key judgements

The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

1) Development costs - notes 1.4 and 11.

Management determine when the criteria for capitalisation of development costs have been met including commercial viability and ability to reliably measure costs as an intangible asset based on discounted expected cash flows. Judgement is required in determining the practice for capitalising development costs and is required in assessing whether the development costs meet the criteria for capitalisation. This judgement has been applied consistently year to year.

2) Application of IFRS16 to site agreements - note 1.7

The Group operates vending units which are deployed under a fee-paying agreement with the site owner. These agreements vary widely in their terms and conditions. Due to the high volume of such agreements, the accounting impact is material to the Group. Management assesses, on agreement-by-agreement basis, whether the criteria for recognition as a lease under IFRS 16 has been met, which requires judgement. This judgement has been applied consistently year to year.

Group and Company

The following are areas of estimation uncertainty:

1) Goodwill and other intangible assets - notes 1.4, 1.8 and 11.

The recoverable amount of cash generating units (CGUs) has been determined by management on a value in use basis. These calculations require estimates by management, including management's expectations of future growth in revenue, costs and profit margins, cash flows and discount rates.

The carrying value of goodwill and intangible assets at the period end were £17,116,000 and £15,620,000 respectively.

For both goodwill and intangible assets, we have used for impairment tests the discounted cash flows method to evaluate the asset value. Value in use was determined by discounting the future cash flows of the CGU. Cash flows include a forecast period of five years, based on actual operating results, budgets and economic market research with a terminal value based on a long-term growth rate applied thereafter. The Growth rate assumption for all CGUs was 1%.

WACC discount rates were calculated for each territory and ranged between 9.7% and 14.2%. Further details of impairment testing are disclosed in note 11.

Goodwill impairments are not reversed or adjusted.

2) Useful lives and Impairment of property, plant and equipment - notes 1.5, 1.8, 12 and 13

Management make estimates of the useful life of property, plant and equipment as disclosed below in notes 1.4 and 1.5. Technological developments and regulatory changes can impact on the lives of the vending estate. Management consider these factors in assessing the useful lives of the assets.

Each of the Group's vending machine units is considered a standalone cash generating unit. The COVID 19 pandemic negatively impacted the cash generation of vending units, indicating potential impairment at that point in time. Consequently, at 31 October 2020 each unit was subject to impairment testing, based on each individual unit's projected EBITDA, as described in note 12. Impairment charges were recognised where value in use of a unit was lower than its carrying value.

At 31 October 2021 and 31 October 2022 all units were subject to updated impairment tests and impairments were updated accordingly. Where impairment tests indicated a reduced level of impairment, the impairment held was reduced, with care taken to ensure that the closing net book value did not exceed what it would have been had the original impairment never occurred. Further details are disclosed in note 12.

The carrying value of property, plant and equipment at the period end was £101,090,000.

3) Valuation of pension obligations - note 1.13 and 22

The Group operates pension and other retirement and post-employment schemes including both funded defined benefit schemes, and defined contribution schemes. The schemes' assets and liabilities are valued annually by third party actuaries, in accordance with IAS19. Pension valuations are subject to estimation and uncertainty due to the complex nature of actuarial assumptions. Management reviews the appropriateness of the actuaries' assumptions each year as part of the valuation process.

The carrying value of the Group's pension and retirement obligations at the period end was £3,850,000.

4) Determination of discount rates for lease accounting - notes 1.7 and 12

To calculate the value of right of use assets and lease liabilities recognised in the Statement of Financial Position, management must determine an appropriate discount rate to apply to the cashflows of each lease agreement. Discount rates are subject to uncertainty and estimation as they are based on numerous external inputs and assumptions.

Management determines discount rates using the Group's external cost of borrowing adjusted for timing of borrowing, lease term, country and currency impacts. An asset specific adjustment is also applied to tailor the discount rate to the specific characteristic of the leased asset. For the purpose of determining asset specific adjustments leases have been organised into pools of similar leased asset types.

Management obtained expert external advice on the determination of appropriate discount rates for the year ended 31 October 2022. The discount rates used range between 0.05% and 2.29%.

1.2 BASIS OF CONSOLIDATION

The Group consolidates the financial statements of the Company and all of its subsidiaries, and includes associates under the equity method, as at each year end.

Subsidiaries

Subsidiaries are all entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date on which control ceases. Losses applicable to non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a negative balance.

The principal subsidiaries affecting the results and financial position of the Group are shown in note 28.

Changes in ownership of subsidiaries and loss of control

Changes in the Group's interest in a subsidiary that do not result in loss of control are accounted for as equity transactions.

Where the Group loses control of a subsidiary, the assets and liabilities are derecognised along with any related non controlling interest and other components of equity. Any resulting gain or loss is recognised in profit and loss. Any interest retained in a subsidiary is measured at fair value when control is lost.

The Group uses the acquisition method to account for business combinations. Acquisition costs for business combinations are expensed as incurred. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets acquired, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at their fair values on acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

If the business combination is achieved in stages, the carrying value of the acquirer's previously held interest in the acquiree is re-measured to fair value at the acquisition date, with such gains or losses arising from re-measurement recognised in profit and loss.

Transactions eliminated on consolidation

Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Where necessary, subsidiaries' accounting policies have been changed to ensure consistency with the Group's policies.

Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Application of the equity method to associates and joint ventures

Associates are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group's share of the total comprehensive income and equity movements of equity accounted investees, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the Group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an investee.

The principal associates affecting the results and financial position of the Group are shown in note 28.

Non-controlling interests

Non-controlling interests represent the portion of results for the period and net assets not held by the Group. They are presented separately within the statement of comprehensive income and the statement of financial position.

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. When a non-controlling interest is acquired by the Group, any difference between the consideration paid and the accumulated value of the non-controlling interest is recognised in equity. Gains or losses on disposal of non-controlling interests are also recognised in equity.

1.3 FOREIGN CURRENCY TRANSLATION

The consolidated financial statements and the Company's own financial statements are presented in Sterling being the functional and presentational currency of the Parent Company and all values are shown in £'000 except where indicated.

Transactions in foreign currencies are translated into the respective functional currencies of the Group's subsidiaries at the exchange rate ruling on the date the transaction is recorded. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates ruling at 31 October. Exchange gains and losses resulting from the above translation are reflected in the income statement, except where they qualify as cash flow hedges and are reflected in equity. There were no qualifying cash flow hedges in 2022 or 2021.

Income statements of overseas entities are translated into Sterling, at weighted average rates of exchange, as a reasonable approximation to actual exchange rates at the date of the transaction and their statements of financial position are translated at the exchange rate ruling at 31 October. Exchange differences arising on the translation of opening net assets are taken to equity, as is the exchange difference on the translation of the income statement between average and closing exchange rates. For this purpose, net assets includes loans between group companies and any related foreign exchange contracts where settlement is neither planned nor likely to occur in the foreseeable future. Such cumulative exchange differences are released to the income statement on disposal of the subsidiary or associate.

1.4 INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of cost of an acquisition of a subsidiary or associate over the fair value of the Group's share of net identifiable assets at the date of acquisition. Goodwill on acquisition of associates is included in investment in associates and impairments thereof in administrative expenses in the income statement.

Goodwill is not amortised but is tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amounts may be impaired and is carried at cost less any impairment. On disposals, goodwill is included in the calculation of gains or losses on the sale of the previously acquired entity.

For the purposes of impairment testing, goodwill is allocated to cash-generating units. Each of these units represents the Group's investment in operating subsidiary .

Research and development expenditure

Research and Development costs are accounted for in line with all relevant criteria as mandated by IAS 38 Intangible Assets. Research expenditure is expensed as incurred. Costs incurred in developing projects are capitalised as intangible assets when it is considered that the commercial viability of the project will be a success based on discounted expected cash flows, and the costs can be reliably measured. Other development costs are expensed and are not recognised as assets.

Other intangible assets

Intangible assets (including research and development) acquired as part of a business combination are capitalised at fair value at the date of acquisition. Other intangibles are capitalised at cost.

The policies applied to the Group's intangible assets are summarised as follows:

	Development costs	Software	Customer related	Patents and licences	Droit au Bail
Useful lives	Finite	Finite	Finite	Finite	Indefinite
Amortisation	Straight-line basis, with a maximum life of four years from commencement of commercial production, with no residual value	Straight-line basis, with a maximum life of three years, with no residual value	Customer related intangible assets are amortised over their useful lives of between three and 10 years on a straight-line basis with no residual value	Patents and licence assets are amortised over their useful lives of between seven and 10 years on a straight-line basis with no residual value	Not amortised, but subject to impairment testing annually
Internally generated or acquired	Internally generated	Acquired	Acquired	Acquired	Acquired

Amortisation of capitalised development costs are included in the cost of sales. Amortisation of other intangible assets categories is included in both the cost of sales and administration expenses in the income statement.

1.5 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is shown at cost, less accumulated depreciation and any impairment.

Subsequent expenditure on property, plant and equipment is capitalised, either as a separate asset, or included in the cost of the asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost can be measured reliably. The carrying amount of any parts of the assets that are replaced are derecognised. All other costs are recognised in the income statement as an expense as incurred.

Freehold land is not depreciated. Other assets are depreciated on a straight-line basis, to reduce cost to the estimated residual value over the estimated useful life of the asset at the following rates:

Freehold buildings	2% - 5% straight-line
Photobooths and vending machines	10% - 33.33% straight-line
Right of use assets	Depreciated over the lease term.
Plant, machinery, furniture, fixtures and motor vehicles	12.5% - 33.33% straight-line.

The assets' residual values and useful lives are reviewed at each year end and adjusted, if appropriate.

Operating equipment assets are reviewed at least annually for impairment testing.

1.6 INVESTMENT PROPERTY

Certain of the Group's properties are classified as investment properties; being held for long-term investment and to earn rental income. Investment properties are stated at cost and the building element is depreciated to reduce cost to its estimated residual value at rates between 3.33% and 8.33% on a straight-line basis.

1.7 LEASES

The Group has arrangements across three main categories that meet the definition of a lease under IFRS 16: site agreements, property and motor vehicles. The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognizes a right-of use asset and corresponding lease liability at the lease commencement date, except for short term leases and leases of low value. For these leases, the lease payments are recognized as an operating expense on a straight-line basis over the term of the lease.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liabilities adjusted for any lease payments made at or before the commencement date, plus any initial costs incurred. The right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses. The right-of-use assets are from the commencement date depreciated over the shorter period of lease term and useful life of the underlying asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment.

The lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the relevant country discount rate. Lease Liabilities are adjusted for certain re-measurement events, e.g. revised discount rate, change in the lease term or change in future lease payments resulting from a change in an index. Discount rates are determined using the Group's external cost of borrowing adjusted for timing of borrowing, lease term, country and currency impacts. An asset specific adjustment is also applied to tailor the discount rate to the specific characteristic of the leased asset. For the purpose of determining asset specific adjustments leases have been organised into pools of similar leased asset types.

Site agreements

The Group operates vending units which are deployed under a fee-paying agreement with the site owner. These agreements vary widely in their terms and conditions. The Group examines, on an individual basis, the degree to which these agreements meet the definition of a lease under IFRS 16, with particular regard to the presence of an identified asset with no substitution rights. While the standard sets out the definition of a lease, judgement is required in assessing the degree to which those criteria are met, particularly with regard to the presence of an identified asset with no substitution rights.

Non-IFRS16 leases

Some of the Group's lease arrangements do not meet the criteria for IFRS16 treatment (eg variable rent, site owners have the control on the machine location or Me Group can stop a contract with a short period notice at any time) and are de facto accounted for as operating costs.

1.8 IMPAIRMENT

For goodwill and intangible assets with indefinite lives, the carrying value is reviewed annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amounts may be impaired.

Other intangible assets and property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value of the asset is higher than the recoverable amount of the asset an impairment loss is recognised. In carrying out such impairment evaluations the recoverable amount is the higher of the asset's value in use or its fair value less costs to sell. Assets that do not generate largely independent cash inflows are grouped at the lowest level for which separately identifiable cash flows exist (cash-generating units) and the recoverable amount is determined for the cash-generating unit (CGU). If necessary, the carrying value is reduced by charging an impairment loss in the income statement.

These impairments are shown under "Administrative expenses" on the Statement of Comprehensive income.

Reversal of impairment

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that it does not exceed the carrying amount that would have been determined had no impairment loss been recognised. No impairment loss is reversed for goodwill or intangible assets with indefinite lives.

1.9 FINANCIAL INSTRUMENTS

(i) Financial assets

Classification of financial assets

Financial instruments are classified based on the Group's business model for managing financial assets and the contractual cash flow characteristics of the financial asset.

(a) Trade receivables

Trade receivables are initially measured at fair value, and subsequently at their amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts.

(b) Financial assets held at amortised cost

Initially recognised at fair value and subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by any impairment losses. Interest income, foreign exchange gains and losses and impairments are recognised in the income statement. Any gain or loss on derecognition is recognised in the income statement.

Financial assets in this category are initially recorded and subsequently valued at fair value, with changes in fair value recognised in the income statement.

For investments designated as financial assets at fair value through profit or loss, the fair values of quoted investments are based on current bid prices. For unlisted investments the Group uses various valuation techniques to determine fair values.

(ii) Financial liabilities

(a) Borrowings

Borrowings are recorded initially at the fair value of the consideration received net of directly attributable transaction costs.

After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method. This method includes any initial issue costs and discounts or premiums on settlement. Finance costs on the borrowings are charged to the income statement under the effective interest rate method.

Financial liabilities are derecognised when the obligation under the liability is cancelled, discharged or has expired.

(b) Trade and other payables

Trade payables are initially recorded at fair value and subsequently recorded at amortised cost using the effective interest rate method.

1.10 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost includes costs incurred in bringing inventories to their present location and condition. The cost of work-in-progress and finished goods includes an appropriate proportion of production overheads.

Finished goods also include operating equipment not yet sited.

Raw materials and consumables are valued on a first-in first-out basis or on an average cost basis where average cost is not significantly different to first-in first-out due to the fast turnaround of consumables. The Group uses standard costs to value inventory and these standard costs are regularly updated to reflect current prices.

Inventories are stated net of provisions for slow moving and obsolete inventory based on expected future usage.

1.11 CASH AND CASH EQUIVALENTS

Cash and cash equivalents are carried in the statements of financial position at cost. Bank overdrafts are included within borrowings in current liabilities in the statements of financial position. For the purposes of the statements of cash flows, cash and cash equivalents comprises cash on hand, restricted and unrestricted deposits held at banks and other highly liquid investments with an original maturity of three months or less, less bank overdrafts.

1.12 SHARE CAPITAL

Shares of the Company are classified as equity.

Where the Company acquires its own equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of tax relief), is deducted from equity attributable to the Company's equity shareholders until the shares are either cancelled or subsequently reissued. The amount is shown in equity as treasury shares. Where such shares (the treasury shares) are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company's equity holders.

1.13 EMPLOYEE BENEFITS

Pension obligations

Group companies have various pension schemes in accordance with local conditions and practices in the countries in which they operate.

The Company operates a defined benefit pension scheme, which is closed to new entrants, with contributions made by employees and the Company with defined benefits being based upon the employee's length of service and final pensionable salary. The Company also operates a defined contribution pension scheme.

Defined benefit scheme

Details of the pension schemes are included in note 22.

The net obligation for the Group's defined benefit pension schemes is calculated for each scheme separately by estimating the future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value amount of plan assets. The calculation is performed by independent actuaries using the projected unit credit actuarial method. If this calculation results in a potential asset for the Group, this asset is only recognised to the present value of the economic benefits available in the form of a refund of contributions paid to the fund or reductions in future contributions. In calculating the present value of any economic benefit consideration is given to any minimum funding requirements.

Re-measurement of the net liability, which comprises actuarial gains and losses, the return on plan assets (excluding interest) and the effects of any asset ceiling, are recognised in other comprehensive income. The Group determines the net interest expense (income) on the net liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the then net defined liability (asset), taking into account changes in the period as a result of contributions and pension benefits paid. Other expenses are charged to profit and loss.

When plan benefits are changed or the plan curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised in profit and loss. Gains and losses on settlement of any plan are recognised when settlement occurs.

Defined contribution scheme

Contributions to defined contribution schemes are expensed as incurred.

o Short-term employee benefits

The Group recognises a liability and an expense for short-term employee benefits (such as holiday pay, bonuses and profit sharing) where these obligations contractually arise (for example, as a result of employment contracts) or where a constructive obligation has arisen from past practice.

1.14 PROVISIONS

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are discounted where the effect of the time value of money is material.

1.15 TAXATION

Tax expense for the current period comprises current and deferred tax and is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or equity. The current tax charge is calculated on the basis of the laws enacted or substantively enacted at the statement of financial position date in the countries where the Group operates.

Deferred tax is provided in full on temporary differences arising between the tax base of assets and liabilities and their carrying value in the accounts.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in future periods in which the temporary difference will reverse, based on tax rates and laws enacted or substantively enacted at the year end.

Deferred tax assets are recognised to the extent that it is probable that the future taxable profit, against which the deductible temporary differences can be utilised, will be available.

Deferred tax is provided, or an asset recognised, on taxable temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Current tax assets and liabilities are measured at the amounts expected to be recovered from, or paid to, the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at year end.

1.16 SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker as required by IFRS 8 Operating Segments. Details of the segments are shown in note 3.

1.17 REVENUE RECOGNITION

There are 3 types of revenue considering by the Group:

• Vending revenue from the operating machines is recognised when the services are provided which is when payment is received. Vending revenue is total consideration received during the period including that held in machines at the statement of financial position date. There are no vending transactions requiring unbundling of components. Revenue is the fair value of consideration received or receivable and is measured net of discounts, VAT and other sales-related taxes. Payment is received immediately before the service is delivered to the customer.

• Revenue from the sale of equipment, spare parts and consumables is recognised upon delivery of products and acceptance, if applicable, by the customer. Equipment, spare parts and consumables are sold on their own and no unbundling is required for accounting purposes. Revenue is the fair value of consideration received or receivable and is measured net of discounts, VAT and other sales-related taxes. Payment is typically due and received 30 days after the delivery of the product.

The Group offers a two-year warranty on all machines sold and is responsible for any repairs required in that period.

• Revenue from the provision of services, principally maintenance contracts, is recognised at the time the service is delivered to the customer. Services are sold on their own as stand-alone products with no unbundling required. Revenue is the fair value of consideration received or receivable and is measured net of discounts, VAT and other sales-related taxes. Revenue is recognised in a straight-line manner over the maintenance contract term. Payment is typically due and received 30 days after the delivery of the service is complete. Contract terms do not exceed one year in length.

1.18 DIVIDEND DISTRIBUTIONS

Dividends to the Company's shareholders are recognised as a liability and deducted from shareholders' equity in the period in which the shareholders' right to receive payment is established.

1.19 COMPANY INVESTMENTS

In the Company statement of financial position, investments in subsidiaries and associates are stated at cost less impairment. The Company reviews, at least annually, the carrying value of investments and performs an impairment exercise.

An impairment charge is made where there is evidence that the carrying value exceeds the future cash flows of the investment or where its carrying amount will not be recovered from sale.

2 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

New accounting standards

Adopted by the Group

The Group has adopted the following new standards and amendments for the first time in these financial statements with no material impact.

· Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

· COVID-19-Related Rent Concessions beyond 20 June 2021 (Amendment to IFRS 16)

Not yet adopted by the Group

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted by the Group. These new standards and interpretations, which are not expected to have a material effect on the Group, are set out below.

Description	Date required to be adopted by the Group
Onerous Contracts Cost of Fulfilling a Contract (Amendments to IAS 37)	1 January 2022
Annual Improvements to IFRS Standards 2018-2020	1 January 2022
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)	1 January 2022
Reference to the Conceptual Framework (Amendments to IFRS 3)	1 January 2022
IFRS 17 Insurance Contracts	1 January 2023
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)	1 January 2023
Definition of Accounting Estimate (Amendments to IAS 8)	1 January 2023

3 SEGMENTAL ANALYSIS

IFRS 8 requires operating segments to be identified, based on information presented to the Chief Operating Decision Maker (CODM) in order to allocate resources to the segments and monitor performance. The Group reports its segments on a geographical basis: Asia Pacific, Continental Europe and United Kingdom & Ireland. The Group's Continental European operations are predominately based in Western Europe and, with the exception of the Swiss operations, use the Euro as their domestic currency. The Board, being the CODM, believe that the economic characteristics of the European operations, together with the fact that they are similar in terms of operations, use common systems and the nature of the regulatory environment allow them to be aggregated into one reporting segment.

Segmental results are reported before intra-group transfer pricing charges.

	Asia	Continental	United Kingdom
	Pacific	Europe	& Ireland	Corporate	Total
12 months ended 31 October 2022	£'000	£'000	£'000	£'000	£'000
Total revenue	39,945	187,897	41,996	-	269,838
Inter segment sales	-	(10,058)	-	-	(10,058)
Revenue from external customers	39,945	177,839	41,996	-	259,780
EBITDA	9,094	75,497	15,388	(7,738)	92,241
Depreciation, amortisation and impairment	(7,136)	(24,234)	(3,868)	(322)	(35,560)
Operating profit/loss excluding associates	1,958	51,263	11,520	(8,060)	56,681
Operating profit					56,681
Other losses					(1,176)
Finance income					-
Finance costs					(2,151)
Profit before tax					53,354
Tax					(14,561)
Profit for the period					38,793
Capital expenditure (excluding Right of Use assets)	4,218	20,056	9,522	1,359	35,156

Non-current assets	24,870	90,932	25,054	796	141,652

	Asia	Continental	United Kingdom
	Pacific	Europe	& Ireland	Corporate	Total
12 months ended 31 October 2021	£'000	£'000	£'000	£'000	£'000
Total revenue	39,751	152,257	29,644	-	221,652
Inter segment sales	-	(7,248)	-	-	(7,248)
Revenue from external customers	39,751	145,009	29,644	-	214,404
EBITDA	8,062	54,809	8,587	(6,381)	65,077
Depreciation, amortisation and impairment	(6,024)	(25,174)	(3,643)	(901)	(35,742)
Operating profit/loss excluding associates	2,038	29,635	4,944	(7,282)	29,335
Operating profit					29,335
Other gains					1,998
Finance income					177
Finance costs					(2,955)
Profit before tax					28,555
Tax					(6,703)
Profit for the period					21,852
Capital expenditure (excluding Right of Use assets)	2,993	20,749	5,974	245	29,961

Non-current assets	28,088	85,150	18,643	(1,419)	130,462

Inter-segment revenue mainly relates to sales of equipment.

Total revenue from external customers is analysed below:

	Group
	12 months ended 31 October	12 months ended 31 October
	2022	2021
	£'000	£'000
Total revenue from external customers
Sales of equipment, spare parts & consumables	20,459	21,013
Sales of services	3,895	3,772
Other sales	-	130
	24,355	24,915
Vending revenue	235,425	189,488
Total revenue	259,780	214,404

There were no key customers in the period ended 31 October 2022 (2021: none).

4 PROFIT FOR THE PERIOD

Costs and overhead items charged/(credited) in arriving at profit for the period, include the following:

	31 October	31 October
	2022	2021
	£'000	£'000
Amortisation, depreciation and impairment
Amortisation of capitalised research and development expenditure	2,955	1,396
Amortisation of intangible assets other than research and development	3,664	(49)
Impairment of / (reversal of impairment of) capitalised research and development expenditure	153	(112)
Impairment of / (reversal of impairment of) intangible assets other than research and development	-	3,602
Impairment of goodwill	-	582
	6,772	5,419
Depreciation of property, plant and equipment and investment property
Depreciation of owned assets	25,774	28,767
Depreciation of right of use asset	6,445	4,420
Impairment of / (reversal of impairment of) owned property, plant and equipment and investment property	(3,443)	(2,875)
	28,776	30,312
Amortisation of capitalised research and development expenditure
- reflected in income statement in cost of sales	2,955	1,396
Amortisation of intangible assets other than research and development
- reflected in income statement in cost of sales	3,394	1,181
- reflected in income statement in administrative expenses	272	(1,231)
	6,621	1,346

	31 October	31 October
	2022	2021
	£'000	£'000
Short term leases
- property	945	537
- plant and equipment	825	888
	1,770	1,425
Inventory cost
Cost of inventories recognised as an expense	6,580	8,537
	6,580	8,537

During the period the Group provided £288,000 in respect of obsolete stock (2021: £1,268,000).

	31 October	31 October
	2022	2021
	£'000	£'000
Other items
Research and development current period expenditure, not capitalized	1,724	1,463
Trade receivables impairment / (reduction of impairment) (note 15)	(126)	850
Net foreign exchange losses	630	689
(Gain) on sale of property, plant and equipment	(175)	(368)
Direct expenses for investment properties generating rental income	-	12

Audit and non-audit services

The following fees for audit and non-audit services were paid or are payable to the Company's auditor, Mazars (2021: Mazars) and its associates.

	31 October	31 October
	2022	2021
	£'000	£'000
Fees for the audit of the company and the group - Mazars LLP	313	232
Fees for the audit of the subsidiaries - other Mazars	39	192
Fees for audit related services (interim review) - Mazars	50	-
Fees for the audit of the subsidiaries - Other firms	84	83
	486	507

In order to maintain the independence of the external auditors, the Board has determined policies as to what non-audit services can be provided by the Company's external auditors and the approval processes related thereto. This function is performed by the Audit Committee. No such services were delivered in the year or in the previous year.

In addition to the audit fees payable to the Group's auditor and its associates, certain Group subsidiaries are audited by other firms.

Other operating income

	31 October	31 October
	2022	2021
	£'000	£'000
Gain on disposal of property	7315
Rental income from investment property (note 13)	365	98
Other small items of non-trading income	236	219
	7916	317

The Group generated a gain of £7,315,000 from the sale of an office property in France.

Other gains and losses

Other gains and losses comprise of transactions relating to financial instruments held at FVTPL, other financial instruments and the disposal of subsidiaries. They have been disclosed separately in order to improve a reader's understanding of the financial statements and are not disclosed within operating profit as they are non-trading in nature.

	31 October	31 October
	2022	2021
	£'000	£'000
Other gains and losses
(Loss)/gain on disposal of subsidiary	(459)	1093
Fair value (loss)/gain on financial instrument held at FVTPL	(330)	546
(Loss)/gain on available for sale financial instruments	(20)	26
Other (losses)/gains	(367)	333
	(1,176)	1,998

Period ended 31 October 2022

The Group incurred a loss on disposal of £459,000 from the disposal of its Spanish subsidiary La Wash Group, recognized in other losses in the income statement.

Period ended 31 October 2021

The gain of £1,093,000 related to the disposal of the Group's investments in Revolution Max Limited and Inox Limited, previously subsidiary undertakings.

5 EMPLOYEES

Employment costs

	31 October	31 October
	2022	2021
	£'000	£'000
Wages and salaries	41,394	38,920
Social security costs	9,017	7,491
Share options granted to directors and employees	884	493
Post-employment benefit costs
- defined benefit schemes	383	251
- defined contribution schemes	265	447
	51,943	47,602

Number of employees

The average number of employees during the period (including executive directors) comprised:

	31 October	31 October
	2022	2021

Full - time	996	860
Part - time	121	113
	1,117	973

UK : Full - time	159	103
UK : Part - time	4	0
Continental Europe : Full - time	688	625
Continental Europe : Part - time	24	35
Asia and rest of the world : Full - time	149	132
Asia and rest of the world : Part - time	93	78
	1,117	973

Employees by category

	As at	As at
	31 October	31 October
	2022	2021
Senior managers in the Group (excluding directors of Me Group)	27	31
Employees- Sales	110	113
Employees-Administration	191	184
Employees-Operating	789	645
Total	1,117	973

6 FINANCE INCOME AND COSTS

	31 October	31 October
	2022	2021
	£'000	£'000
Finance income
Dividends received from investments	-	104
Other financial income	-	73
	-	177
Finance costs
Bank loans and overdrafts at amortised cost	(714)	(691)
Interest on lease liabilities	(1,437)	(2,254)
	(2,151)	(2,955)

7 TAXATION EXPENSE

Tax charges/(credits) in the statement of comprehensive income

	31 October	31 October
	2022	2021
	£'000	£'000
Taxation
Current taxation
UK Corporation tax
- current period	6,104	3,562
- prior periods	2,253	(259)
	8,357	3,303
Overseas taxation
- current period	7,200	3,415
- prior periods	90	259
	7,290	3,674
Total current taxation	15,647	6,977
Deferred taxation
Origination and reversal of temporary differences
- current period - UK	(150)	(301)
- current period - overseas	(961)	119
Adjustments in respect of prior periods - UK	27	-
Adjustments in respect of prior periods - Overseas	45	-
Impact of change in rate	(47)	-
Total deferred tax	(1,086)	(181)
Tax charge in the income statement	14,561	6,796

Tax relating to items (credited)/charged to other components of comprehensive income
Corporation tax	-	-
Deferred tax	248	94
Tax charge in other comprehensive income	248	94

Total tax charge in the statement of comprehensive income	14,809	6,890

Reconciliation of total tax charge

The difference between the Group tax charge and the standard UK corporation tax rate of 19% (2021: 19%) is explained below:

	31 October	31 October
	2022	2021
	£'000	£'000
Profit before tax	53,354	28,555
Tax using the UK corporation tax rate of 19% (2021: 19%)	10,137	5,425
Effect of:
- non-taxable items	405	63
- overseas tax rates	1,983	354
- remeasurement of deferred tax for changes in tax rates	(47)
- losses not recognised in deferred tax (relieved)/incurred	(1,053)	648
- non-deductible expenses	(98)	-
- adjustments to tax in respect of prior periods	2,416	-
- foreign exchange movements	-	213
- other adjustments	818	-
Total tax charge	14,561	6,703
Effective tax rate	27.3%	23.8%

The Group tax charge of £14.8m (2021: £6.8m) corresponds to an effective tax rate of 27.7% (2021: 23.8%).

There will be an increase in the main rate of corporation tax in the UK from 19% to 25% from 1 April

2023. The deferred tax assets and liabilities have been recognised based on the corporation tax rate at

which they are anticipated to unwind.

The Group undertakes business in multiple tax jurisdictions.

8 PROFITS ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY

The profit for the period, after tax, dealt with in the financial statements of the Parent Company is £57,824,000 (2021: £785,000), including dividends received from subsidiaries.

9 DIVIDENDS PAID AND PROPOSED

	31 October 2022		31 October 2021
	pence per share	£'000	pence per share	£'000
Dividends Paid
Special dividend
Approved by the Board on 18 July 2022	6.50	24,572	-	-
Final
2021 approved at AGM held on 29 April 2022	2.89	10,925	-	-
	9.39	35,497	-	-
Dividends Proposed
Interim Dividend
2022 approved by the board on 18 July 2022	2.60	9,829	-	-
	2.60	9,829	-	-

Period ended 31 October 2022 - Dividends paid

The Board proposed a final dividend of 2.89p per ordinary share in respect of the year ended 31 October 2021, which was approved by shareholders at the Annual General Meeting held on 29 April 2022 and paid on 13 May 2022.

The Board also approved, at its 18 July meeting, a special dividend of 6.50p per ordinary share, which was paid on 1 September 2022.

Period ended 31 October 2022 - Proposed dividends not yet paid

The Board proposed an interim dividend of 2.60p per ordinary share for the six month period ended 30 April 2022. The interim dividend was approved by the Board on 18 July 2022 and paid on 3 November 2022.

Period ended 31 October 2021

No dividends were paid in the year ended 31 October 2021.

10 EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net earnings attributable to shareholders of the Parent of £38,793,000 (2021: £21,852,000) by the weighted average number of shares in issue during the period.

Diluted earnings per share amounts are calculated by dividing the net earnings attributable to shareholders of the Parent by the weighted average number of shares outstanding during the period plus the weighted average number of shares that would be issued on conversion of all the dilutive potential shares into shares. The Group has only one category of dilutive potential shares being share options granted to senior staff, including directors, as detailed in note 20.

The earnings and weighted average number of shares used in the calculation are set out in the table below:

	31 October 2022			31 October 2021
		Weighted	Earnings		Weighted	Earnings
		average	per share		average	per share
		number	pence		number	pence
	Earnings	of shares		Earnings	of shares
	£'000	'000		£'000	'000
Basic earnings per share	38,793	378,052	10.26	21,852	378,012	5.78
Effect of dilutive share options	-	1,048	(0.03)	-	927	(0.01)
Diluted earnings per share	38,793	379,100	10.23	21,852	378,938	5.77

Potential shares (for example, arising from exercising share options) are treated as dilutive only when their conversion to shares would decrease basic earnings per share or increase loss per share from continuing operations.

11 GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Group

	£'000
Cost:
At 1 November 2020	19,246
Exchange differences	(370)
Additions	4,685
Disposals	(2,826)
At 31 October 2021	20,735
IFRS remeasurement	(2,337)
At 31 October 2021 (restated)	18,398
At 1 November 2021	18,398
Exchange differences	204
Additions	1,652
Disposals	(2,523)
At 31 October 2022	17,731
Impairment charges:
At 1 November 2020	5,478
Exchange differences	(141)
Disposals	(2,826)
Impairment charge in the period	582
At 31 October 2021	3,093
At 1 November 2021	3,093
Disposals	(2,523)
At 31 October 2022	615
Net book value:
At 31 October 2021	15,305
At 31 October 2022	17,116

In the period the purchase price allocation was completed for two acquisitions: Société Générale d'Equipement de Restauration and Now Retail Group. Brand, patent and customer related intangible assets with a total value of £3,128,000 were identified and transferred from goodwill to intangible assets. A deferred tax liability of £791,000 was recognised in respect of these intangible assets and added to the value of goodwill. Further details of the purchase price allocation are provided in note 29.

Additions to goodwill in the year are in relation to the following acquisitions of subsidiaries:

Additions:	£'000
Dreamakers	1,652
	1,652

Disposals:	£'000
Global Network Investment SL:
Cost	2,523
Impairment	(2,523)
Net book value	-

The assessment of the purchase price adjustments in relation to Dreamakers was still in progress at 31 October 2022.

Company

The Company has no goodwill.

Goodwill by segments

The table below shows the allocation of goodwill acquired through business combinations between segments.

The amount of impairment losses is recognised in Administrative costs.

Goodwill has been allocated for impairment testing purposes to nine (2021: nine) cash-generating units (CGUs); allocated between geographical areas and activity in accordance with impairment testing in the prior period:

	31 October	31 October
	2022	2021
	£'000	£'000
Carrying amount
UK & Ireland
CGU 1 - ME Group Ireland Supplies Limited	154	154
CGU 2 - Photo-Me Northern Ireland	14	14
Total UK & Ireland	168	168
Continental Europe
CGU 1 - ME Group France SAS	308	303
CGU 2 - ME Group Germany GmbH	1,976	1,941
CGU 3 - Sempa SARL	3,374	3,299
CGU 4 - KIS SAS*	693	653
CGU 5 - Dreamakers**	1,692	-
Total Continental Europe	8,043	6,196
Asia
CGU 1 - Nippon Auto-Photo Kabushiki Kaisha***	7,801	7,854
CGU 2 - Now Retail Group	1,104	1,087
Total Asia	8,905	8,941

Total	17,116	15,305

* Europe CGU 4 includes goodwill from the acquisition of Resto'Clock, which was merged into KIS SAS on 31^st May 2022.

** This amount is converted at the closing balance FX rate when the amount in the previous table is converted at the FX rate at the date of acquisition

*** Asia CGU 1 includes goodwill from the acquisition of Photo Plaza Co Ltd, which was merged into Nippon Auto-Photo Kabushiki Kaisha on 15^th March 2021.

The Group tests annually, for impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amount of all CGUs has been determined on a value in use basis.

Value in use was determined by discounting the future cash flows of the CGU. Cash flows include a forecast period of five years, based on actual operating results, budgets and economic market research with a terminal value based on a long-term growth rate applied thereafter.

Key assumptions

Long-term growth rate 1% (2021: 0% to 1%)

The long-term growth rate assumption for all Group CGUs was 1%. The long-term growth rate has been determined based on a conservative basis for expected growth in EBITDA for each CGU and takes into account revenue, volumes, selling prices and operating costs. It is based on past experience and expected future developments in markets and operations, and for the current period taking into account in particular the COVID-19 pandemic and economic conditions.

Discount rate 9.74%-14.24% (2021: 12.63%-14.50%)

The pre-tax discount rates applied to the cash flow forecasts for the CGUs are derived from the pre-tax weighted average cost of capital for the Group adjusted for country specific risks, local risk free borrowing rates and local tax rates for the specific country concerned.

The rates used are: United Kingdom 13.28%, (2021: 13.14%), Ireland 10.40% (2021: 13.39%), France 12.36% (2021: 13.05%), Germany 11.16% (2021: 12.61%), Spain 14.24% (2021: 13.97%), Japan 10.65% (2021: 13.20%), Portugal 12.29% (2021: 14.50%), Belgium 10.12% (2021: 13.14%), Netherlands 11.28% (2021: 12.63%), Switzerland 10.00% (2021: 12.67%) and Austria 9.74% (2021: 12.96%). The Board is confident, overall, that these discount rates reflect the circumstances in each country, and are in accordance with IAS 36.

Sensitivity to key assumptions

As at the measurement date, the recoverable amount of all cash-generating units, based on their value in use, is significantly higher than the carrying amount relevant for the impairment test. After considering all key assumptions, management considers that a reasonably pessimistic revision of key assumptions which can rationally be expected would still cause the carrying amount of the cash-generating units to exceed their recoverable amount.

Other intangible assets - Group

	Capitalised	Other
	development	intangible
	costs	assets	Total
	£'000	£'000	£'000
Cost:
At 1 November 2020	12,919	23,036	35,955
Exchange differences	(710)	(1,311)	(2,021)
Additions external	1,802	727	2,529
Additions new subsidiary	-	7,644	7,644
Disposals	(1,000)	(42)	(1,042)
At 31 October 2021	13,011	30,054	43,065
IFRS remeasurement	-	3,128	3,128
At 31 October 2021 (restated)	13,011	33,182	46,193
At 1 November 2021	13,011	33,182	46,193
Exchange differences	(16)	(306)	(322)
Additions external	1,418	1,068	2,486
Additions new subsidiary	-	98	98
Disposals	(6,374)	(4,306)	(10,680)
At 31 October 2022	8,039	29,736	37,775
Amortisation:
At 1 November 2020	9,243	13,246	22,489
Exchange differences	(1,157)	(1,066)	(2,223)
Provided during the period	1,284	3,553	4,837
Transfer from property, plant and equipment	758	386	1,144
Disposals	-	(42)	(42)
At 31 October 2021	10,128	16,077	26,205
At 1 November 2021	10,128	16,077	26,205
Exchange differences	(31)	(182)	(213)
Provided during the period	3,108	3,664	6,772
Disposals	(6,341)	(4,268)	(10,609)
At 31 October 2022	6,864	15,291	22,155
Net book value:
At 1 November 2020	3,676	9,790	13,466
At 31 October 2021	2,883	17,105	19,988
At 31 October 2022	1,175	14,445	15,620

Capitalised research and development expenditure is amortised over a maximum of four years, with no residual value.

Other intangible assets consist of software (£1,390,000), brands (£665,000), customer related assets (£11,181,000), patents (£1,089,000) and Droit au Bail (£120,000).

Research and development

An impairment charge of £153,000 (2021: credit for reversal of impairment of £112,000) is recognised in the line "Costs of sales". The impairment charge was made against the intangible assets of KIS SAS (£49,000) and the Photo-Me (Shanghai) Co Limited (£104,000). Impairment losses were due to a reduction in forecast cash generation of the affected subsidiaries.

Other intangible assets

No impairment charges or reversals were recognised in the year (2021: £3,602,000 impairment charge was recognised in "Administrative expenses").

Company

	Other
	intangible
	assets
	£'000
Cost:
At 1 November 2020	776
At 31 October 2021	776
Addition	5
At 31 October 2022	781
Amortisation:
At 1 November 2020	776
At 31 October 2021	776
At 31 October 2022	776
Net book value:
At 1 November 2020	0
At 31 October 2021	0
At 31 October 2022	5

12 PROPERTY, PLANT AND EQUIPMENT

Own work capitalised

Some of the Group's subsidiaries manufacture vending equipment, which is then sold to the Group's operating companies and capitalised by them as fixed assets. The amount capitalised includes direct costs associated with the manufacture of such items together with applicable overheads, but excludes general overheads and administration costs. When relevant, profits made by the selling company are eliminated on consolidation.

Group

	Land & Buildings	Photobooth & vending machines	Plant, machinery, furniture, fixtures & motor vehicles	Right of Use Land & Buildings	Right of Use Plant, machinery, furniture, fixtures	Right of Use Motor vehicles	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost:
At 31 October 2020	19,308	278,800	27,258	1,003	10,715	4,814	341,898
Exchange difference	(1,359)	(17,747)	(1,481)	(49)	(520)	(234)	(21,390)
Additions internal	-	22,450	4	-	-	-	22,454
Additions external	425	113	4,437	3,517	4,356	1,868	14,716
Additions - new sub	-	2,207	274	-	-	-	2,481
Disposals	(313)	(20,991)	(2,362)	(71)	(976)	(998)	(25,711)
At 31 October 2021	18,061	264,832	28,130	4,400	13,575	5,450	334,448
Exchange difference	206	(644)	295	59	155	102	173
Additions internal	-	21,496	-	-	-	-	21,496
Additions external	683	5,709	4,782	2,878	1,803	2,617	18,472
Additions - new sub	3	8	-	-	-	-	11
Disposals	(3,650)	(14,477)	(3,042)	(2,328)	(1,047)	(1,707)	(26,251)
At 31 October 2022	15,303	276,924	30,165	5,009	14,486	6,462	348,349
Depreciation:
At 31 October 2020	9,690	213,280	22,115	291	4,409	1,828	251,613
Exchange difference	(798)	(13,922)	(1,597)	(14)	11	(89)	(16,409)
Provided during the period	330	25,931	2,506	972	2002	1446	33,187
Impairments	95	(4,167)	1,197	-	-	-	(2,875)
Transfers to intangibles	-	(1,144)	-	-	-	-	(1,144)
Disposals	(56)	(18,960)	(1,114)	271	(1,137)	(901)	(21,897)
At 31 October 2021	9,261	201,018	23,107	1,520	5,285	2,284	242,475
Exchange difference	7	(1,439)	357	93	23	40	(919)
Provided during the period	322	22,849	2,603	2,015	2,619	1,811	32,219
Impairments	(86)	(2,650)	(707)	-	-	-	(3,443)
Disposals	(2,510)	(14,477)	(1,862)	(1,470)	(1,047)	(1,707)	(23,073)
At 31 October 2022	6,994	205,301	23,498	2,158	6,880	2,428	247,259
Net book value:
At 1 November 2020	9,618	65,520	5,143	712	6,306	2,986	90,285
At 31 October 2021	8,800	63,814	5,023	2,880	8,290	3,166	91,973
At 31 October 2022	8,309	71,623	6,667	2,851	7,606	4,034	101,090

Internal additions for photobooths and vending machines of £21,496,000 (2021: £22,450,000) relate to own work capitalised, being equipment manufactured by the subsidiaries and capitalised by the group companies.

The Group and the Company test all significant operating equipment asset classes for impairment annually, or more frequently if there are indications of impairment. Impairment reviews on operating equipment are all conducted on a value in use basis.

The key assumptions for the value in use calculation were those regarding the discount rates, growth during the forecast period. The estimated growth rates were based on historic performance trends and budgets. The long-term growth rate used to extrapolate cash flow projections beyond the period covered by the financial forecasts was 1% (2021: 0%- 1%). Pre-tax discount rates ranging between 9.7% and 14.2% (2021: 12.6% to 14.5%) were applied to the cash flows.

At the current year end all units were subject to an updated impairment test and impairments updated accordingly. Where impairment tests indicated a reduced level of impairment, the impairment held was reduced, with care taken to ensure that the closing net book value did not exceed what it would have been had the original impairment never occurred. Impairments or reversals of impairment to photobooths and vending machines were recognised in the following operating segments: Asia Pacific - impairment charge of £1,603,000; Continental Europe - impairment reversal of (£1,405,000); and United Kingdom - impairment reversal of (£2,848,000).

A reversal of impairment to land and buildings of (£86,000) was recognised in the United Kingdom operating segment.

Impairments or reversals of impairment to plant, machinery, furniture, fixtures and motor vehicles were recognised in the following operating segments: Asia Pacific - impairment charge of £9,000; Continental Europe - impairment reversal of (£563,000); and United Kingdom - impairment reversal of (£153,000).

Significant impairment charges were made against the Group's property, plant and equipment during the pandemic affected period, when the uncertain outlook and reduced trading indicated impairment. In the current and prior years, as the pandemic restrictions has eased in most of our territories, the value in use of assets has increased and provisions have been reversed where appropriate.

Company

	Land & Buildings	Photobooth & vending machines	Plant, machinery, furniture, fixtures & motor vehicles	Right of Use Land & Buildings	Right of Use Plant, machinery, furniture, fixtures	Right of Use Motor vehicles	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost:
At 1 November 2020	-	42,530	1,440	-	2,438	955	47,363
Additions internal	-	3,226	-	-	-	-	3,226
Additions external	-	193	969	-	-	-	1,162
Additions right of use	-	-	-	1,011	109	772	1,892
Disposals external	-	(7,517)	(128)	-	(649)	(312)	(8,606)
At 31 October 2021	-	38,432	2,281	1,011	1,898	1,415	45,037
Additions internal	572	5,063	-	-	-	-	5,635
Additions external	-	430	1,030	-	28	60	1,548
Disposals external	-	(3,603)	(150)	-	(427)	(361)	(4,541)
At 31 October 2022	572	40,323	3,161	1,011	1,499	1,114	47,679
Depreciation:
At 31 October 2020	-	36,612	400	-	1,163	434	38,609
Provided during the period	-	1,524	822	107	628	354	3,435
Disposals external	-	(7,128)	(35)	162	(649)	(290)	(7,940)
At 31 October 2021	-	31,008	1,187	269	1,142	498	34,104
Provided during the period	18	1,107	147	107	408	336	2,123
Additions internal	289	-	-	-	-	-	289
Disposals external	-	(3,347)	(66)	-	(427)	(361)	(4,201)
At 31 October 2022	307	28,768	1,268	376	1,123	473	32,315
Net book value:
At 1 November 2020	1,796	4,321	1,041	1,041	1,041	1,041	7,158
At 31 October 2021	2,537	7,424	972	972	972	972	10,933
At 31 October 2022	265	11,554	1,891	634	375	640	15,364

Internal additions for photobooths and vending machines of £5,063,000 (2021: £3,226,000) relate to new equipment produced by subsidiaries and equipment previously capitalised by the Group's subsidiaries and sold to the parent.

13 INVESTMENT PROPERTY

Group

	£'000
Cost:
At 1 November 2020	13,660
Exchange differences	(838)
At 31 October 2021	12,822
Exchange differences	230
At 31 October 2022	13,052
Depreciation:
At 1 November 2020	13,008
Exchange differences	(799)
Provided during the period	16
At 31 October 2021	12,225
Exchange differences	220
Provided during the period	15
At 31 October 2022	12,460
Net book value:
At 1 November 2020	652
At 31 October 2021	597
At 31 October 2022	592

The investment property is freehold and is stated at cost less depreciation and any impairment charges. The directors are satisfied that the fair value of the Investment property is not less than its net book value.

Rental income from the investment property was £365,000 (2021: £98,000) (note 4).

Company

The Company has no investment property.

14 INVESTMENTS IN ASSOCIATES AND SUBSIDIARIES

Investment in associates

Group

	£'000
Cost:
At 1 November 2020	57
Exchange differences	(1)
Disposal (see note 4)	(35)
At 31 October 2021	21
Exchange differences	(1)
Disposal (see note 4)	-
Dividends	-
At 31 October 2022	20

					Share of
Name	Country of	Assets	Liabilities	Revenue	profit	Dividends	Interest
	incorporation	£'000	£'000	£'000	£'000	received	%
At 31 October 2021
Globe Connect & Photomaton Maroc	Morocco	90	69	-	-	-	-
		90	69	-	-	-	50
At 31 October 2022
Globe Connect & Photomaton Maroc	Morocco	90	70	-	-	-	50
		90	70	-	-	-	50

Company

	Associated	Subsidiary
	undertakings	undertakings	Total
	£'000	£'000	£'000
Costs:
At 1 November 2020	41	48,119	48,160
Addition	-	2,953	2,953
Disposal	(35)	(2,251)	(2,286)
At 31 October 2021	6	48,821	48,827
At 1 November 2021	6	48,821	48,827
Capital increase relating to share-based payment (net)	-	521	521
Disposal	-	(2,956)	(2,956)
At 31 October 2022	6	46,386	46,392
Provision:
At 1 November 2020	3	2,623	2,626
Impairment	3	1,548	1,552
Disposal	-	(2,251)	(2,251)
At 31 October 2021	6	1,920	1,926
At 1 November 2021	6	1,920	1,926
Impairment	-	-	-
Disposal	-	(2)	(2)
At 31 October 2022	6	1,918	1,924
Net book value:
At 1 November 2020	38	45,496	45,534
At 31 October 2021	-	46,901	46,901
At 31 October 2022	-	44,468	44,468

The net capital increase relating to share-based payments relates to share options in the parent company, Me Group International plc, granted to employees of subsidiary undertakings of the Group. Refer to note 20 for further details on the Group's share option schemes.

The details of all the Group's subsidiaries and associates are given in note 28 of the Annual Report 2022.

15 FINANCIAL INSTRUMENTS

Group Treasury

The Group has a centralised treasury function. The primary aim for this function is to manage liquidity and funding arrangements and the Group's exposure to associated financial and market risks, including credit risk, interest rate risk and foreign currency risk. The general approach for Group Treasury is one of risk reduction within a framework of delivering total shareholder return.

Treasury operations

Overview and policy

Treasury policy is set by the Board. Group treasury activities are subject to a set of controls appropriate for the magnitude of the borrowing, investments and group-wide exposures. To date the treasury function has limited itself to obtaining surplus cash from the subsidiaries and depositing this in bank accounts owned by the Group's Treasury Company. The Board has defined an investment strategy, amounts and types of products to which the surplus cash may be invested.

The Board monitors the performance of the Treasury function and is responsible for making changes to the personnel and limits of authority of Treasury personnel.

The Board has provided written principles for overall risk management of the Treasury Function. It has also defined policies and procedures covering such areas as foreign exchange risk, interest rate risk, credit risk, the use of derivative instruments and investment of excess liquidity (surplus funds above the immediate and short-term operational funding needs, such as working capital requirements). The key objectives for Group Treasury are to protect the principal value of cash and cash equivalents, to concentrate cash at the centre to minimise external borrowings, and to maximise the return on cash.

Liquidity risk

Liquidity risk is the risk that the Group will face in meeting its obligations in settling its financial liabilities. The Group's approach to managing liquidity risk is to ensure that it has sufficient funds to meet its liabilities when due without incurring unacceptable losses. A material and sustained shortfall in the Group's cash flow could undermine the Group's credit rating, impair major investor confidence and restrict the ability of the Group to raise new funds.

The Group maintained a satisfactory net cash position throughout the period and preceding periods as a result of cash generation from the business.

During the current period and prior period surplus cash held by the operating subsidiaries, over and above balances required for working capital management was transferred to Group Treasury. These funds were kept in their local currency, or converted into sterling and kept in the Treasury Company bank accounts which are interest bearing.

The strong cash generation and retention from the business together with available credit resources, help mitigate liquidity risk.

The Group may hold financial instruments (such as bank and other loans) to finance its day to day working capital requirements, for capital expenditure, for corporate transactions (such as dividend payments to shareholders, share buybacks, acquisitions), for the management of currency and interest rate exposure arising from its operations (which may involve the use of derivatives and swaps) and for the temporary investment of short-term funds. No derivatives or swaps have been used in the period ending 31 October 2022 (31 October 2021: none). With a satisfactory net cash position, the Group largely finances its working capital and capital expenditure programmes from its own resources. In addition, financial instruments such as trade receivables (amounts due from customers as a result of a sale) and trade payables (arising from purchases of materials and services) arise from day-to-day trading.

The following notes describe the Group's financial risk management policy and details on financial instruments.

15(A) FAIR VALUES OF FINANCIAL INSTRUMENTS BY CLASS

There is no difference between the fair values and the carrying values of financial assets and financial liabilities held in the Group's or the Company's statement of financial position.

The Group holds an investment in Max Sight Group Holdings Ltd, which as a listed company. This investment is valued at level 1. The Group owns 109,972,500 Max Sight Group Holdings Ltd's shares valued at 0,065 HKD per share as at 31 October 2022, giving a value at that date of £788,643.

On 27 October 2022, the Group subscribed to 500,000 convertible bonds in Energy Observer Developments SAS, a privately held company. This investment is valued at level 3 as its value is linked to the equity value of Energy Observer Developments SAS, which is not observable market data. At both the subscription date, 27 October 2022, and at the reporting date, 31 October 2022, the investment is valued at is issue price of €5,000,000 (£4,300,335).

In the absence of observable relevant market data, the bond's issue price is deemed to be the best measure of fair value.

There are no material Level 2 investments held by the Group or Company.

Financial instruments by category

The tables below show financial instruments by category for the Group

Group

At 31 October 2022		Fair Value
	Loans and	Through	Total
	receivables	Profit & Loss
	£'000	£'000	£'000
Assets per statement of financial position
Financial instruments held at FVTPL	-	5,239	5,239
Financial assets - held at amortised cost:
Trade and other receivables	10,449	-	10,449
Cash and cash equivalents	136,185	-	136,185
	146,634	5,239	151,873

		Other financial	Total
		liabilities at
		amortised cost
		£'000	£'000
Liabilities per statement of financial position
Borrowings		102,163	102,163
Leases		15,923	15,923
Trade and other payables		52,248	52,248
		170,334	170,334

At 31 October 2021		Fair Value
	Loans and	Through	Total
	receivables	Profit & Loss
	£'000	£'000	£'000
Assets per statement of financial position
Financial instruments held at FVTPL	-	1501	1501
Financial assets - held at amortised cost:
Trade and other receivables	24,320	-	24,320
Cash and cash equivalents	99,362	-	99,362
	124,826	1501	125,183

		Other financial	Total
		liabilities at
		amortised cost
		£'000	£'000
Liabilities per statement of financial position
Borrowings		64,443	64,443
Leases		16,493	16,493
Trade and other payables		42,484	42,484
		123,420	123,420

Company

At 31 October 2022		Fair Value
	Loans and	Through	Total
	receivables	Profit & Loss
	£'000	£'000	£'000
Assets per statement of financial position
Financial assets held at FVTPL	-	789	789
Financial assets - held at amortised cost:
Trade and other receivables	23,142	-	23,142
Cash and cash equivalents	13,321	-	13,321
	36,463	789	37,251

		Other financial	Total
		liabilities at
		amortised cost
		£'000	£'000
Liabilities per statement of financial position
Leases		1,801	1,801
Trade and other payables		14,551	14,551
		16,352	16,352

At 31 October 2021		Fair Value
	Loans and	Through	Total
	receivables	Profit & Loss
	£'000	£'000	£'000
Assets per statement of financial position
Financial assets held at FVTPL	-	1,292	1,292
Financial assets - held at amortised cost:
Trade and other receivables	19,454	-	19,454
Cash and cash equivalents	4,002	-	4,002
	23,456	1,292	24,748

		Other financial	Total
		liabilities at
		amortised cost
		£'000	£'000
Liabilities per statement of financial position
Leases		2,557	2,557
Trade and other payables		20,999	20,999
		23,556	23,556

15(B) FINANCIAL STATEMENT RISK MANAGEMENT

Financial risk factors and financial risk management

Overview

The Group and the Company are exposed to the following risks arising from financial instruments:

(i) Credit risk

(ii) Liquidity risk

(iii) Market risk

Credit risk is the risk of financial loss to the Group and the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. It mainly arises on trade and other receivables and bank balances.

Liquidity risk arises from the Group and the Company having insufficient cash resources to meet its obligations as and when they fall due for payment.

Market risk arises from changes in market prices, such as exchange rates, interest rates and equity prices that will impact on the Group's and the Company's statement of comprehensive income or the value of its holding of financial instruments.

Listed below are details of these risks, the Group's objectives, policies and processes for measuring and monitoring risks and the Group's management of capital.

Risk Management Framework

The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential risks for the Group. Information has been disclosed relating to the Parent Company only where material risk exists.

There is a continuous process for identifying, evaluating and managing the key financial risks faced by the Group in line with changing market conditions and the Group's strategy. If necessary, the Group's internal audit function may assist in monitoring and assessing the effectiveness of controls and procedures. The Board retains responsibility for ensuring the adequacy of systems for identifying and assessing significant risks, that appropriate control systems and other mitigating actions are in place and that residual exposures are consistent with the Group's strategy and objectives. Assessments are conducted for all material entities.

The Group may use derivatives to manage exchange or interest rate risk. Approval for their use is given by the Board and the position is monitored constantly.

With regard to management of interest rate risk, the objectives are to lessen the impact of adverse interest rate movements on earnings and shareholders' funds and to ensure no breach of covenants. This is mainly achieved by reviewing the mix of fixed and floating rate borrowings.

The Group's liquidity risk management involves maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount of committed credit facilities.

(i) Credit risk

The Group has no significant concentrations of credit risk. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, and on outstanding trade and other receivables. Cash deposits are limited to high credit quality financial institutions. The Group has policies in place to ensure that sales of products and services are made to customers with an approved credit history.

Credit quality of financial assets

Individual Group companies have banking relationships with leading banks in the country in which the Group company operates. Surplus cash is placed with Group Treasury bank accounts, as described above. The Group has procedures in place to ensure that cash is placed with sound financial institutions.

The Group and the Company trade with a large number of customers, ranging from quoted companies and state organisations to individual traders. Individual Group companies have credit control procedures in place before making sales to new customers and levels of credit are reviewed in light of trading experience. The normal terms of trade are in the range 30-90 days. The collection of outstanding receivables is monitored at both the Group and subsidiary level.

The Group and the Company make provisions against trade and other receivables, such provisions being based on the previous credit history of the debtor and if the debtor is in receivership or liquidation.

The maximum credit risk for financial assets is the carrying value.

Trade and other receivables are normally interest free. The normal terms of settlement for trade receivables are between 30 and 90 days.

Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments for a period of greater than 120 days past due or an impairment amount being required under the ECL model mandated by IFRS 9.

Under the Group's operating model, most revenue is collected at the point of sale. Where credit terms are offered, the Group has a strong record of debtor recovery.

Any balances that are more than 90 days past due date are provided for in their entirety. The only exceptions to this policy are accounts where the Group has open work in progress or where technical issues are preventing the proper operation of the vending unit in question.

Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

The Group does not require collateral in respect of trade and other receivables. The Group does not have trade receivable and contract assets for which no loss allowance is recognised because of collateral.

The Directors have concluded that the credit risk of trade and other receivables has not increased significantly since initial recognition. The Directors have come to this conclusion having considered micro and macro-economic factors including Brexit, the Group's knowledge of its customers, payment history of the customers and industry trends.

The ageing of net current trade receivables is as follows:

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
	£'000	£'000	£'000	£'000
Current	4,209	7,061	12	(2)
Past due
- overdue 1-30 days
- overdue 31-60 days	39	1,280	5	65
- overdue 61 days	1,630	1,370	8	(52)
Total past due	1,669	2,650	13	13
Total trade receivables	5,878	9,711	25	11

The credit quality of trade receivables that are neither past due nor impaired is assessed on an individual basis, based on credit ratings and experience. Management believes adequate provision has been made for trade receivables.

(ii) Liquidity risk

The Group's liquidity risk management involves maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount of committed credit facilities. Trading forecasts indicate that the current facilities provide more than sufficient liquidity headroom to support the business for the foreseeable future. The net cash position at 31 October 2022 and 31 October 2021 has reduced liquidity risk for the Group.

The Group has adequate undrawn facilities and, having regard to the Group's cash flow, it is considered that these facilities provide adequate headroom for the Group's needs. The facilities are generally reaffirmed by the banks annually. These undrawn facilities, if used, will be subject to floating rates of interest and may be subject to the normal covenant conditions attached to such borrowings.

Certain lending banks may impose loan covenants on borrowings, which are normal for these types of borrowings, and, during the years to 31 October 2022 and 31 October 2021, the Group and the Company have comfortably complied with such requirements.

The table below summarises the maturity profile of the Group's and Company's financial liabilities (including trade and other payables) at 31 October 2022 and 31 October 2021 based on contractual undiscounted payments.

Group contractual cash flows

	Within					Over
	one year	Year 2	Year 3	Year 4	Year 5	5 years	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 October 2022
Interest bearing loans and borrowings and interest free loans	29,799	25,678	19,523	16,735	10,158	271	102,164
Finance leases	5,858	2,568	2,513	2,503	2,481	-	15,922
Trade and other payables	52,248	-	-	-	-	-	52,248
	87,905	28,246	22,036	19,238	12,639	271	170,334
At 30 October 2021
Interest bearing loans and borrowings and interest free loans	20,120	17,770	13,593	7,381	4,410	1,169	64,443
Finance leases	5,757	2,556	2,141	2,082	2,071	1,887	16,493
Trade and other payables	42,484	-	-	-	-	-	42,484
	68,361	20,326	15,734	9,463	6,481	3,056	123,420

Company contractual cash flows

	Within					Over
	one year	Year 2	Year 3	Year 4	Year 5	5 years	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 October 2022
Finance leases	1,060	185	185	185	185	-	1,801
Trade and other payables	14,552	-	-	-	-	-	14,552
	15,612	185	185	185	185	-	16,353
At 30 October 2021
Finance leases	830	361	361	361	361	282	2,557
Trade and other payables	20,999	-	-	-	-	-	20,999
	21,829	361	361	361	361	282	23,556

Financial instruments held at amortised cost and held to maturity

These largely comprise of restricted bank deposit accounts where the cash acts as security against possible shortfalls in the Group's UK pension fund obligations.

(iii) Market risk

Foreign exchange risk

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the local functional currency. In addition, the Group faces currency risks arising from monetary financial instruments held in non-functional currencies. The income statement reflects the impact of realised and unrealised exchange differences on trading items and monetary financial instruments (note 4).

The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. The main currency translation risk relates to foreign operations whose functional currency is the Euro, Swiss Franc or Japanese Yen. The investments are not hedged. The translation reserve reflects the exchange differences arising on translation of the opening net assets and results of the foreign operation (note 20).

Operational foreign exchange exposure

Where possible, the Group tries to invoice in the local currency of the respective entity. If this is not possible, to mitigate exposure, the Group endeavours to buy from suppliers and sell to customers in the same currency. The exposure relating to receivables and payables denominated in the non-functional currency is normally less than 3 months as this is the normal settlement period for these items.

Subject to the requirements of Group Treasury, as noted above, where possible, the Group tries to hold the majority of its cash and cash equivalent balances in the local currency of the respective entity.

Monetary assets/liabilities

The Group continues to monitor exchange rates and buy or sell currencies in order to minimise the open exposure to foreign exchange risk.

The Group may use derivative financial instruments mainly to reduce the risk of foreign exchange exposure on trading items (sales or purchases in currencies other than the domestic currency of the company concerned) and interest rate movements. The Group does not hold or issue derivative financial instruments for financial trading purposes.

Borrowings

At 31 October 2022 and 31 October 2021 the majority of the Group's borrowings were denominated in Euros and held by subsidiaries whose functional currency is the Euro.

Analysis monetary assets and liabilities by currency

Group

At 31 October 2022			Swiss	Japanese	Other
	Sterling	Euro	Franc	Yen	Currencies	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Assets per statement of financial position
Financial instruments held at FVTPL	789	4,450	-	-	-	5,239
Trade and other receivables	2,152	15,708	139	3,002	1,023	22,024
Cash and cash equivalents	15,781	105,910	5,236	7,694	1,564	136,185
	18,722	126,068	5,375	10,696	2,587	163,448
Liabilities per statement of financial position
Borrowings and Leases	1,802	110,801	435	4,944	104	118,086
Trade and other payables	9,109	37,149	2,300	3,170	520	52,248
	10,911	147,950	2,735	8,114	624	170,334

At 31 October 2021			Swiss	Japanese	Other
	Sterling	Euro	Franc	Yen	Currencies	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Assets per statement of financial position
Financial instruments held at FVTPL	1,425	76	-	-	-	1,501
Trade and other receivables	4,340	15,897	291	2,236	1,556	24,320
Cash and cash equivalents	5,146	80,199	3,493	8,539	1,985	99,362
	10,911	96,172	3,784	10,775	3,541	125,183

Liabilities per statement of financial position
Borrowings and Leases	114,045	(29,652)	(1,637)	3,420	(5,240)	80,936
Trade and other payables	8,417	28,329	1,769	3,202	767	42,484
	122,462	(1,323)	132	6,622	(4,473)	123,420

IFRS 7 sensitivity analysis

Sensitivity analysis has been performed on the Group's Euro foreign exchange risk, as its most material foreign currency. A 10% strengthening of Euro against Sterling, at the Statement of Financial Position date, would have caused a £2,432,000 decrease in the Group's net assets at that date (2021: £267,000 increase in net assets). A 10% weakening of Euro against Sterling would have had the equal and opposite effect on the Group's net assets..

Interest rate risk

	31 October	31 October
	2022	2021
	£'000	£'000
Net cash
Mainly non-interest bearing current accounts:
Cash at bank and in hand	81,219	97,683
Deposit accounts - generally interest bearing:
Bank deposit accounts	53,981	695
Restricted bank deposit accounts	985	984
Other items
Interest free and interest bearing loans	(102,163)	(64,443)

	34,022	34,919

The above table shows which components of net debt are subject to interest. The Group has no exposure to floating rate interest bearing debt and a change in interest rates will not have a material change on interest expense.

IFRS 7 sensitivity analysis

All of the Group's debt is subject to fixed rates of interest, so interest payable charges would not be materially impacted by a change in interest rates. Consequently, no sensitivity tables have been presented.

Details of the Group's borrowings are shown in the table below. All loans are subject to fixed rates of interest. An increase of 1% in the fixed rate of interest would result in an extra £1,022,000 (31 October 2021: £644,000) of interest expense.

Terms and debt repayment schedule

The table below shows the maturity profile and interest rates of the Groups borrowings at 31 October 2022 and 31 October 2021.

					2022	2021
					Carrying	Carrying
			Interest	Year of	amount	amount
Group	Status	Currency	Rate	maturity	£'000	£'000
Loans	Fixed rate	Euro	0.49% - 1.2%	2022-2026	102,163	64,443
Lease liabilities	Fixed rate	Various	6,1% - 18.6%	Various	15,923	16,493
					118,086	80,936

Price risk

The Group and the Company are exposed to changes in prices on raw materials, consumables and finished goods purchased from suppliers. Wherever possible, price rises are passed on to customers via sales price increases to help manage this risk.

The Group's other investments in equity securities are not listed, and are not material thus the Group does not have any significant exposure to price risk on these equity investments.

15(C) CAPITAL RISK MANAGEMENT

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern and to enhance long-term shareholder value, by investing in the business so as to improve the return on investment (by increasing profits available for dividends) and by managing the capital gearing ratio (mixture of equity and debt).

The Group manages, and makes adjustments to, its capital structure in light of the prevailing risks and economic conditions affecting its business activities. This may involve adjusting the rate of dividends, purchasing the Company's own shares, the issue of new shares and reviewing the level and type of debt. The Group manages its borrowings by appraising the mix of fixed and floating rate borrowings and the mix of long-term and short-term borrowings. Details of how the Group and subsidiaries are funded are shown below. There were no changes to the Group's approach to capital management during the period.

Group

The Group is funded by share capital and retained earnings; supplemented by external borrowing as required. The Group has had a strong net cash position throughout the current and comparative period.

Subsidiary companies

Subsidiary companies are funded by share capital and retained earnings, and where applicable local borrowings by the subsidiaries in appropriate currencies.

The capital structure of the Group is presented below.

	31 October	31 October
	2022	2021
	£'000	£'000
Cash and cash equivalents	136,185	99,362
Borrowings	(102,163)	(64,443)
Net cash (excluding restricted deposits)	34,022	34,919
Equity	132,649	129,964

The Group has various borrowings and available facilities that contain certain external capital requirements (covenants) that are considered normal for these types of arrangements. The Group remains comfortably within all such covenants.

16 TRADE AND OTHER RECEIVABLES

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
	£'000	£'000	£'000	£'000
Non-current assets
Other receivables	1,974	1,784	-	-
Prepayments	-	84
	1,974	1,868	-	-

Current assets
Gross trade receivables	6,865	10,587	101	115
Provision for trade receivables	(987)	(876)	(76)	(104)
Trade receivables	5,878	9,711	25	11
Amounts due from subsidiaries	-	-	21,525	17,020
Other receivables	2,597	5,282	354	127
Prepayments	11,549	7,458	1,238	2,296
	20,024	22,451	23,142	19,454

All trade receivables arise from contracts with customers.

Non-current other receivables include deposits relating to operating sites and properties. Current other receivables include deposits relating to operating sites and properties, indirect and other taxation and other receivables.

17 INVENTORIES

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
	£'000	£'000	£'000	£'000
Raw materials and consumables	18,774	14,271	1,066	999
Finished goods	6,717	4,187	764	493
	25,491	18,458	1,830	1,492

The replacement value of inventories is not materially different from that stated above.

18 CASH AND CASH EQUIVALENTS

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
	£'000	£'000	£'000	£'000
Cash at bank and in hand	81,220	97,683	2,516	3,026
Deposit accounts (excluding restricted deposits)	53,980	695	9,829	-
Restricted deposit accounts	985	984	976	976
Cash and cash equivalents per statement of financial position	136,185	99,362	13,321	4,002

Cash and cash equivalents per cash flow comprise cash at bank and in hand and short-term deposit accounts with an original maturity of less than three months, less bank overdrafts. The amounts placed in short-term deposit accounts depend on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rate. Cash at bank is generally interest free but may earn interest at the applicable daily bank floating deposit rate.

The restricted bank deposit accounts of £985,000 (2021: £984,000) are subject to restrictions and are not freely available for use by the Group or Company.

19 NET CASH

		Group		Company
		31 October	31 October	31 October	31 October
		2022	2021	2022	2021
	Notes	£'000	£'000	£'000	£'000
Cash and cash equivalents per statement of financial position	18	136,185	99,362	13,321	4,002
Non-current borrowings	21	(72,365)	(44,323)	-	-
Current borrowings	21	(29,799)	(20,120)	-	-
Net Cash		34,021	34,919	13,321	4,002

At 31 October 2022, £985,000 of the total net cash (2021: £984,000) comprised bank deposit accounts that are subject to restrictions and are not freely available for use by the Group and Company.

Net cash is a non-GAAP measure since it is not defined in accordance with IFRS but is a key indicator used by management in assessing operational performance and financial position strength. The inclusion of items in net cash as defined by the Group may not be comparable with other companies' measurement of net cash/debt. The Group includes in net cash, cash and cash equivalents and certain financial assets, mainly deposits, less current and non-current borrowings outstanding excluding lease liabilities of £15,922,000 (2021: £16,493,000).

The tables below reconcile the Group's net cash to the Group's statement of cash flows.

Group

		Exchange	Other
	1 November	differences	movements	Cash flow	31 October
	£'000	£'000	£'000	£'000	£'000
31 October 2022
Cash and cash equivalents per statement of financial position and cash flow	99,362	548	-	36,275	136,185
Financial asset held at amortised cost					-
Non-current loans	(44,323)	(310)	27,740	(55,473)	(72,366)
Current loans	(20,120)	(255)	(27,740)	18,316	(29,799)
	34,919	(17)	-	(882)	34,020

31 October 2021
Cash and cash equivalents per statement of financial position and cash flow	107,177	(5,926)	-	(1,889)	99,362
Financial asset held at amortised cost					-
Non-current loans	(39,444)	2,413	(3,295)	(3,997)	(44,323)
Current loans	(45,434)	2,989	3,295	19,030	(20,120)
	22,299	(524)	(0)	13,144	34,919

Company

	1 November	Cash flow	31 October
	£'000	£'000	£'000
31 October 2022
Cash and cash equivalents per statement of financial position and cash flow	4,002	9,319	13,321
Financial instrument held at amortised cost/held to maturity	-		-
	4,002	9,319	13,321
31 October 2021
Cash and cash equivalents per statement of financial position and cash flow	5,879	(1,877)	4,002
Financial instrument held at amortised cost/held to maturity	-		-
	5,879	(1,877)	4,002

20 SHARE CAPITAL AND RESERVES

	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
Share Capital	Number	Number	£'000	£'000
Allotted, issued and fully paid:
Ordinary shares of 0.5p each
At the beginning of the period	378,011,637	377,992,637	1,889	1,889
Issued in year - share options exercised	40,000	19,000	-	-
At the end of the period	378,051,637	378,011,637	1,889	1,889

The holders of Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Share options, which have been granted to senior staff, including directors, to purchase Ordinary shares of 0.5p each, are as follows:

Date options granted	At 31 October 2021	Exercise price	Granted during year	Lapsed or forfeited during year	Exercised during year	At 31 October 2022	Exercise price	Date from which exercisable	Last date on which exercisable
09-Jul-15	761,000	133.33p	-	(761,000)	-	-	133.33p	09-Jul-18	08-Jul-22
13-Jul-16	499,300	141.50p	-	(50,000)	-	449,300	141.50p	13-Jul-19	12-Jul-23
21-Jul-17	260,000	157.00p	-	(260,000)	-	-	157.00p	21-Jul-20	21-Jul-24
27-Aug-19	976,509	101.40p	-	(30,000)	-	946,509	101.40p	27-Aug-22	26-Aug-26
4-Oct-19	1,000,000	93.30p	-	-	-	1,000,000	93.30p	4-Oct-22	4-Oct-26
5-Oct-20	1,000,000	51.05p	-	-	-	1,000,000	51.05p	5-Oct-23	5-Oct-27
19-Apr-21	1,265,000	61.40p	-	-	(20,000)	1,245,000	61.40p	19-Apr-24	19-Apr-28
05-Aug-21	2,184,774	77.50p	-	-	(20,000)	2,164,774	77.50p	05-Aug-24	05-Aug-28
5-Oct-21	1,000,000	61.10p	-	-	-	1,000,000	61.10p	5-Oct-24	5-Oct-28
12-May-22	-	68,73p	2,225,000	-	-	2,225,000	68.73p	12-May-25	12-May-29
	8,946,583		2,225,000	(1,101,000)	(40,000)	10,030,583

All options can be exercised, in normal circumstances, within a period of four years from the grant date, providing that the performance criterion or performance condition has been achieved. The subscription price for all options is based upon the average market price on the three days prior to the date of grant. Options are restricted, or may lapse, if the grantee leaves the employment of the Group before the first exercise date.

All options are equity settled options.

Options granted after 2005 are covered by the new Me Group Executive Share Option Scheme. The vesting of options is subject to an EPS-based performance condition relating to the extent to which the Company's basic EPS for the third financial year, following the date of grant, reaches a sliding scale of challenging EPS targets.

Options are normally granted over shares worth up to 150% of a participant's salary each year. In exceptional cases as part of the terms of attracting senior management, options in excess of that number may be granted.

The weighted average exercise price of all options outstanding at 31 October 2022 is 75.98p (2021: 86.91p) and the weighted average exercise price of options exercisable at 31 October 2022 is 105.54p (2021: 140.06p).

The weighted average share price for options exercised during the period ended 31 October 2022 was 96.35p (31 October 2021: no options exercised).

The weighted average remaining years for options outstanding at the period-end date is 5.2 years (2021: 4.9 years).

Share-based payments

In accordance with IFRS 2 Share-based Payments, share options granted to senior management including directors after November 2002 have been fair-valued and the Company has used the Black-Scholes option pricing model. This model takes into account the terms and conditions under which the options were granted.

The following table lists the inputs to the model used for the years ended 31 October 2022 and 31 October 2021:

Date of grant	27 August 2019	4 October 2019
Vesting period	3 years	3 years
Share price volatility	32.5%	32.59%
Share price on date of grant	101.40p	92.80p
Option price	103.00p	93.30p
Expected term	3.25 years	3.25 years
Dividend yield	0.00%	3.98%
Risk free interest rate	0.00%
Fair value	45.51p

Date of grant	5 October 2020	19 April 2021	5 August 2021
Vesting period	3 years	3 years	3 years
Share price volatility	31.64%	51.40%	77.50%
Share price on date of grant	42.30p	63.20p	77.50p
Option price	93.30p	61.40p	77.50p
Expected term	3.25 years	3.25 years	3.25 years
Dividend yield	0.00%	0.00%	0.00%
Risk free interest rate		0.17%	0.15%
Fair value		34.89p	28.18p

Date of grant	12 May 2022	5 October 2021
Vesting period	3 years	3 years
Share price volatility	49.91%	49.48%
Share price on date of grant	65.20p	65.50p
Option price	68.73p	61.10p
Expected term	3.25 years	3.25 years
Dividend yield	4.43%	0.00%
Risk free interest rate	1.24%	0.56%
Fair value	25.17p	24.47p

The charge for share-based payments was £884,000 (2021: £493,000) and for the Company the charge was £321,000 (2021: £5,000).

Share price volatility is based on historical data.

Reserves

Group

Treasury shares (Group and Company)

In accordance with shareholders' resolutions passed at Annual General Meetings, the Company may purchase its own shares up to a maximum of 10% of the Ordinary shares in issue. At 31 October 2022 and 31 October 2021 the Company held no shares in treasury.

Share premium

Share premium reserve is the cumulative value of the excess received for shares above their nominal value.

Other reserves

Other reserves mainly arise in subsidiaries, are generally not distributable, and arise as a result of local legislation regarding capital maintenance.

Translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries and associates. In accordance with the options allowed under IFRS 1, only exchange rate differences arising on translation after the date of transition, 1 May 2004, are shown in this reserve. When an overseas subsidiary or associate is disposed, the cumulative exchange difference relating to the entity disposed is recycled through the statement of comprehensive income as part of the profit or loss on sale in finance revenue/cost and is shown as a movement in other comprehensive income.

Company

Other reserves

The Company's other reserves include £521,000 (2021: £201,000) arising on the redemption of the deferred shares and £2,007,000 (2021: £2,006,000) relating to the fair value of options granted to employees of Group undertakings.

21 FINANCIAL LIABILITIES

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
	£'000	£'000	£'000	£'000
Non-current liabilities
Non-current instalments due on bank loans	72,365	44,323	-	-
Current liabilities
Current instalments due on loans	29,799	20,120	-	-

Bank loans bear fixed rates of interest. Margins are generally between 0.4% and 1.0%. Further details are provided in note 15.

Lease liabilities

In addition to bank loans, the Group has lease liabilities of £15,922,000 (2021: £16,493,000).

The Company has lease liabilities of £1,801,000 (2021: £2,557,000).

The Group has arrangements across three main categories: site agreements, property and motor vehicles. The key quantitative information regarding the lease portfolio is shown below:

Group As at 31 October 2022	Site agreements	Property	Motor vehicles
Number of lease agreements	545	9	423
Average lease term	74	66	43
Average remaining term (months)	34	28	10

Company As at 31 October 2022	Site agreements	Property	Motor vehicles
Number of lease agreements	65	1	99
Average lease term	47	113	47
Average remaining term (months)	6	72	17

The maturity profile of lease liabilities is shown below:

Group	Within					Over
	one year	Year 2	Year 3	Year 4	Year 5	5 years	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 October 2022
Leases	5,858	2,568	2,513	2,503	2,481	-	15,922

At 31 October 2021
Lleases	5,757	2,556	2,141	2,082	2,071	1,887	16,493

Company	Within					Over
	one year	Year 2	Year 3	Year 4	Year 5	5 years	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31 October 2022
Lleases	1,060	185	185	185	185	-	1,801

At 31 October 2021
Leases	830	361	361	361	361	282	2,557

22 POST-EMPLOYMENT BENEFIT OBLIGATIONS

The Company and its principal subsidiaries operate pension and other retirement and post-employment schemes including both funded defined benefit schemes, and defined contribution schemes.

Defined benefit plans

A defined benefit plan is a pension arrangement under which participating members receive a benefit at retirement. The amount is determined by the plan rules and is dependent on such factors as age, years of service and pensionable pay and is not dependent on contributions made by the Company or members. The income statement service cost, in respect of defined benefit plans represents the increase in the defined benefit liability arising from pension benefits accrued by members in the current period. The Company having such plans is exposed to investment and other experience risks and may need to make additional contributions where it is estimated that the benefits will not be covered by the assets of the plan.

The Group's and the Company's policy is to recognise actuarial gains and losses immediately each year in the statement of changes in equity, under other comprehensive income. These comprise the impact on the defined benefit liability of changes in demographic and financial assumptions compared with the start of the year, actual experience being different to those assumptions and the return on plan assets above the amount included in net pension interest.

Defined contribution plans are arrangements in which the benefits paid to participants are linked to the amount of contributions paid and the performance of the scheme. Such plans are independent of the Company and the Group and the Company and the Group have no exposure to investment and experience risks. The income statement charge for these plans represents the contributions paid by the Group based on a percentage of employees' pay.

The Group's and the Company's defined benefit pension schemes are included in the statement of financial position under employment benefit obligations, as are other overseas retirement provisions.

The amounts charged to profit and loss for all post-employment benefits are shown in note 5.

The amount shown in the statement of financial position is detailed as follows:

	Group		Company
	31 October 2022 £'000	31 October 2021 £'000	31 October 2022 £'000	31 October 2021 £'000
Employment benefit obligations	3,692	4,425	-	-
Defined benefit schemes	158	508	-	-
	3,850	4,933	-	-

Me Group International plc defined benefit pension scheme

The Company operates a final salary defined benefit scheme in the UK for some long-serving employees, which is funded by contributions from the Company and by members of the scheme. This pension scheme (the Photo-Me International plc Pension and Life Assurance Fund) is closed to new entrants. The defined benefits are based upon then employee's length of service and final pensionable salary.

The actuarial valuation of the UK Pension scheme has revealed a surplus at 31 October 2022, 31 October 2021, 31 October 2020, 30 April 2019, 30 April 2018 and 30 April 2017. This surplus has not been recognised as an asset, in accordance with IFRIC 14, as in the future the surplus will not be recovered by a reduction in future contributions to the scheme. The scheme has been closed to new members for over 30 years.

The Fund is administered by a corporate Trustee, with Trustee Directors, which is legally separate from the Company. The Trustee Directors include representatives of both the Company and Fund members. The Trustee Directors are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day to day administration of the benefits.

The level of benefits provided by the Fund depends on a member's length of service and salary at date of leaving or retiring from the Fund. Annual pension increases between leaving the Fund and retirement are linked to increases in the Retail Prices Index (RPI). After retirement, annual pension increases are at 3.0% per annum for pension accrued before April 1997 and in line with increases in the RPI, up to a maximum of 5.0% pa, for pension accrued from April 1997.

The benefit payments are from a trustee administered fund containing assets held in trust and governed by UK regulations and practice. The amount of Company contributions is decided jointly by the Trustee Directors and the Company.

The Fund's investment strategy is decided by the Trustee Directors, in consultation with the Company. The Trustee Directors exercise their powers of investment (or delegation where these powers have been delegated to a fund manager) in a manner calculated to ensure the security, quality, liquidity and profitability of the portfolio as a whole. In order to avoid an undue concentration of risk a spread of assets is held. The diversification is both within and across asset classes. The assets are invested in a manner appropriate to the nature and duration of the expected future retirement benefits payable under the Fund. Day to day selection of stocks is delegated to fund managers appointed by the Trustee Directors. As regards the review and selection of their fund managers, the Trustee Directors take expert advice.

Profile of the Fund

The defined benefit obligation includes benefits for deferred pensioners and current pensioners. The defined benefit obligation is broadly split 99%/1% between pensioners and deferred members.

The defined benefit obligation for certain current pensioners is backed by insurance policies. A corresponding asset equal to the defined benefit obligation is included in this note in respect of these members.

The Fund duration is an indicator of the weighted-average time until benefit payments are made. For the Fund as a whole, the duration is around 9 years.

Funding requirements

UK legislation requires that pension schemes are funded prudently. The most recent triennial funding valuation of the Fund was carried out by a qualified actuary with an effective date of 1 June 2021. At this date the Fund had a funding level of 102% and a surplus of approximately £0.2 million on a technical provisions basis. This basis uses actuarial assumptions adopted by the Trustee Directors of the Fund that are consistent with the Fund continuing on an ongoing basis with support from the Company.

The last active member ceased employment with the Company in 2020 so contributions are no longer required in respect of the accrual of benefits in the Fund.

Risks associated with the Fund

The fund exposes the Company to a number of risks, the most significant of which are described below.

Asset volatility	The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform this yield, this will create a deficit.
Changes in bond yields	A decrease in corporate bond yields will increase the value placed on the Fund's liabilities for IAS 19, although this will be partially offset by an increase in the value of the Fund's bond holdings and insurance policies backing pensions in payment.
Inflation risk	Some of the Fund's benefit obligations are linked to inflation, and higher inflation will lead to higher liabilities (although, in most cases, caps on the level of inflationary increases are in place to protect against extreme inflation). In addition, increases in expected inflation will be offset by an increase in the value of the Fund's index-linked bond holdings and insurance policies backing pensions in payment.
Life expectancy	The majority of the Fund's obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the liabilities. Increases in life expectancy will be partially offset by an increase in the value of the insurance policies backing pensions in payment.

Reconciliation of the movement in the present value of the defined benefit obligation

	31 October 2022 £'000	31 October 2021 £'000
Present value of defined benefit obligation at beginning of the period	5,788	6,267
Current service cost	-	-
Interest cost	107	98
Actuarial losses/(gains) on fund liabilities arising in demographic assumptions	67	(8)
Actuarial losses/(gains) from changes in financial assumptions	(1,332)	(151)
Actuarial losses/(gains) on liabilities from experience	84	(79)
Benefits paid	(350)	(339)
Present value of defined benefit obligation at end of the period	4,364	5,788

Reconciliation of the movement in the fair value of plan assets

	31 October 2022 £'000	31 October 2021 £'000
Fair value of plan assets at beginning of the period	6,641	7,040
Interest income on fund assets	123	110
Remeasurement gains on assets	(1,645)	(170)
Benefits paid	(350)	(339)
Fair value of plan assets at end of the period	4,769	6,641

Amount to be recognised in the statement of financial position

	31 October 2022 £'000	31 October 2021 £'000
Present value of funded obligations	4,364	5,788
Fair value of scheme assets	4,769	6,641
Net surplus	(405)	(853)
Effect of limit of recognition of an asset	405	853
Amount recognised in statement of financial position	-	-

Amount recognised in profit and loss

	31 October 2022 £'000	31 October 2021 £'000
Amount recognised in profit and loss
Current service cost	-	-
Interest on net defined liability/(asset)	-	-
Total charge	-	-
Pension expense recognised in profit and loss	-	-
Remeasurement in Other Comprehensive Income
Return on Scheme assets in excess of that recognised in net interest	1,645	170
Actuarial losses due to changes in financial assumptions	(1,332)	(151)
Actuarial losses/(gains) due to changes in demographic assumptions	67	(8)
Actuarial losses/(gains) on liabilities arising from experience	84	(79)
Adjustment due to the asset ceiling	(464)	68
Total expense/(income) amount recognised in Other Comprehensive Income	-	-
Total expense amount recognised in Comprehensive Income	-	-

The amounts shown above are included in staff costs (note 5) and in administrative expenses.

An analysis of the assets of the plan is as follows:

	31 October 2022		31 October 2021
	£'000	%	£'000	%
Bonds and insurance policies	4,704	99	6,628	100
Other	65	1	13	-
	4,769	100	6,641	100

There were no financial instruments of the Company included in the plan assets (2021: none) and there were no property assets occupied by the Company (2021: none).

Principal actuarial assumptions

	31 October 2022	31 October 2021
Discount rate for scheme liabilities	4.9	1.9
Rate for increase in salaries	n/a	n/a
Price inflation	3.1	3.3
Pension increases	3.0	3.2

The mortality tables used for 2022 are S3NXA Light tables for males and S3NXA All lives for females, with CMI 2021 projections and a long-term rate of improvement of 1.25% pa. The mortality tables used for 2021 were also S3NXA Light tables, but with CMI 2020 projections and a long term rate of improvement of 1.25% pa. The mortality assumptions allow for expected future improvements in mortality rates.

Salary increases are not relevant to the valuation as the scheme has been closed to new entrants for 30 years, so all members are now retired.

	31 October 2022	31 October 2021
Male currently aged 65	23.8 years (age 88.8)	23.3 years (age 88.3)
Female currently aged 65	25.1 years (age 90.1)	24.6 years (age 89.6)
Male currently aged 45	25.0 years (age 90.0)	24.5 years (age 89.5)
Female current aged 45	26.5 years (age 91.5)	26.0 years (age 91.0)

	2022 £'000	2021 £'000	2020 £'000	2019 £'000	2018 £'000
Fair value of defined benefit obligation	4,364	5,788	6,267	5,940	5,947
Fair value of assets	4,769	6,641	7,040	6,675	6,657
Surplus/(deficit)	405	853	773	735	710

2022

£'000

2021

£'000

2020

£'000

2019

£'000

2018

£'000

Experience gains/(losses) on fund assets

(1,645)

(170)

622

160

(409)

Experience (losses)/gains on plan liabilities

(84)

(67)

Liabilities for 2022, 2021, 2020, 2019 and 2018 relate to gains/(losses) in respect of liability experience only, and excludes any change in liabilities in respect of changes to the actuarial assumptions used.

Sensitivity to key assumptions

The key assumptions used for the IAS 19 valuation are: discount rate, inflation rate and mortality. If different assumptions were used, this could have a material effect on the results disclosed. The table below shows the sensitivity to the key assumptions noted above.

Period ended 31 October 2022	Plan assets £'000	Defined benefit obligation £'000	Surplus £'000
As reported	4,769	4,364	405
Following a 0.1% decrease in the discount rate	4,780	4,400	380
Following a 0.1% increase in the inflation assumption	4,771	4,376	395
Following an increase in the life expectancy of one year	4,891	4,579	315

The sensitivity information shown above has been prepared using the same method as adopted when adjusting the results of the latest valuation to the statement of financial position data. This is the same approach as has been adopted in previous years.

Overseas pension schemes

The Group's Swiss subsidiary, Me Group Switzerland AG participates in funded multi-employer pension schemes. A guaranteed return for such employees' schemes is mandated by the Swiss state. An actuarial valuation was performed at 31 October 2022 and 31 October 2021 by independent actuaries.

Reconciliation of the movement in the present value of the defined benefit obligation

	31 October 2022 £'000	31 October 2021 £'000
Present value of defined benefit obligation at start of the period	3,621	4,792
Exchange difference	275	(329)
Contribution by members	36	37
Current service cost	172	214
Past service cost	(29)	-
Interest cost	8	8
Remeasurement gains on plan liabilities	(658)	(436)
Prepaid risk premiums	(38)	-
Benefits paid	(491)	(667)
Administration costs	2	2
Present value of defined benefit obligation at end of the period	2,898	3,621

	31 October 2022 £'000	31 October 2021 £'000
Fair value of plan assets at start of the period	3,113	3,615
Exchange difference	245	(190)
Contributions by company and members	178	183
Expected return on plan assets	9	6
Remeasurement gain on plan assets	(276)	166
Benefits paid	(491)	(667)
Prepaid risk premiums	(38)	-
Fair value of plan assets at end of the period	2,740	3,113
	31 October 2022 £'000	31 October 2021 £'000
Net liability at start of the period	508	1,177
Exchange difference	30	(138)
Decrease in liability	(380)	(531)
Net liability at end of the period	158	508

Amounts recognised in comprehensive income

	31 October 2022 £'000	31 October 2021 £'000
Amount recognised in profit and loss
Amounts recognised in comprehensive income
Current service cost	172	214
Past service cost	(29)	-
Administrative expenses	2	2
Net pension interest	(1)	2
Total charge	144	218
Amount recognised in other comprehensive income
Loss/(gains) on scheme assets	276	(166)
Actuarial gains on defined benefit obligation	(658)	(436)
Total amount recognised in other comprehensive income	(382)	(602)
Total amount recognised in profit and loss and other comprehensive income	(238)	(384)

	31 October 2022		30 October 2021
	£'000	%	£'000	%
Cash	27	1	31	1
Equities & debt instruments	1,863	68	2,117	68
Other	849	31	965	31
Total plan assets	2,740	100	3,113	100

Principal actuarial assumptions

	31 October 2022 %	31 October 2021 %
Discount rate	2.40	0.30
Expected return on plan assets at end of year	n/a	n/a
Rate of increase in salaries	1.20	1.20
Price inflation	1.00	1.00

o The normal retirement age for males is between 60 - 65 years and for females between 59 - 64 years for both 2022 and 2021.

o The mortality tables used in 2022 and 2021 were the BVG 2020 GT tables

o The mortality tables used in 2020, 2019 and 2018 were the BVG 2015 GT tables.

History of assets, liabilities and actuarial gains and losses

	2022 £'000	2021 £'000	2020 £'000	2019 £'000	2018 £'000
Present value of defined benefit obligation	2,898	3,621	4,792	4,144	3,826
Fair value of assets	2,740	3,113	3,615	3,087	2,894
Deficit	(158)	(508)	(1,177)	(1,057)	(932)

	2022 £'000	2021 £'000	2020 £'000	2019 £'000	2018 £'000
Experience (losses)/gains on plan liabilities	658	436	(93)	(144)	131
- as a percentage of the present value of plan liabilities	(23%)	(12%)	2%	3%	3%
Remeasurement gains/(losses) on plan assets	(276)	166	(69)	96	(78)
- as a percentage of the present value of plan assets	(10%)	5%	(2%)	3%	(3%)

Sensitivity to key assumptions

The key assumptions used for the IAS 19 valuation are: discount rate, inflation rate and mortality.

If different assumptions were used, this could have a material effect on the results disclosed.

The table below shows the sensitivity to the key assumptions noted above.

		Defined benefit obligation £'000	Increase/ (decrease) in defined benefit obligation £'000
Defined benefit obligation as reported		2,898	-
Defined benefit obligation	- with discount rate - 0.25%	2,989	91
	- with discount rate 0.25%	2,812	(85)
	- with salary decrease - 0.25%	2,971	73
	- with salary increase 0.25%	2,829	(69)
	- with life expectancy 1 year	2,929	31
	- with life expectancy - 1 year	2,865	(33)

The Group's best estimate for contributions to be paid by the company next year to the scheme is £133,000 (2021: £142,000).

The amount recognised in the income statement for this scheme was £144,000 (2021: £218,000).

Overseas post-employment benefit obligations

Provisions for obligations to make termination payments on retirement, to employees who are not members of the pension and retirement schemes, are as follows:

• The Group's Japanese subsidiary undertaking, Nippon Auto-Photo K.K, has an unfunded post-employment retirement provision based on an employee's length of service with the company and their current salary. The allowance is paid to an employee when they leave the company. This has been provided for in full within the accounts. Nippon Auto -Photo K.K, agreed with the employees that 50 % of the liability for the retirement provision will be paid in cash to an independently controlled defined contribution scheme, with the balance to be met by the company when the employee leaves. The provisions were valued by an independent actuary using the Projected Unit Credit Method at 31 October 2022 and 31 October 2021. This actuarial valuation incorporated the following principal assumptions in arriving at the present value of the obligations:

	31 October 2022	31 October 2021
Discount rate	0.49%	0.23%
Rate of increase in salaries	0%	0%
Retirement age	60 years	60 years
Mortality table	Standard mortality rates under defined benefit corporation pension plan (the 22^nd Life Table for male & female)	Standard mortality rates under defined benefit corporation pension plan (the 22^nd Life Table for male & female)

• To meet the legal obligations within France, the Group's subsidiary undertakings have unfunded retirement provisions, which were valued by an independent actuary using the Projected Unit Credit Method at 31 October 2022 and 31 October 2021. This actuarial valuation incorporated the following principal assumptions in arriving at the present value of the obligations:

	31 October 2022	31 October 2021
Discount rate	4.00%	0.65%
Rate of increase in salaries	2.00%	1.75%
Retirement age	62-67 years	62-67 years
Inflation rate	2.00%	1.75%
Mortality table	TGH/TGF 05	TGH/TGF 05

23 PROVISIONS

Group

	Employee
	related	Product
	claims	warranties	Other	Total
	£'000	£'000	£'000	£'000
At 31 October 2020	349	99	814	1,262
Exchange differences	84	(10)	(176)	(103)
Charged to income statement	255	675	77	1,007
At 31 October 2021	688	764	714	2,166
Amount shown as current liability	688	426	714	1,828
Amount shown as non-current liability	-	338	-	338

At 31 October 2021	688	764	714	2,166
Exchange differences	3	7	18	28
Utilised and other movements	(453)	(338)	(760)	(1,551)
Charged to income statement	-	202	722	924

At 31 October 2022	238	635	694	1,567

Amount shown as current liability	238	635	694	1,567

Amount shown as non-current liability	-	-	-	-

24 DEFERRED TAXATION

Deferred tax comprises:

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
		(Restated)
	£'000	£'000	£'000	£'000
Temporary differences relating to property, plant and equipment	187	140	(907)	(732)
Other temporary differences in recognising revenue and expense items in other periods for taxation purposes:
- capitalised development costs	1,015	514	-	-
- post-employment benefit provisions	(1,243)	99	-	-
- losses	-	30	-	-
- acquisition related intangibles	5,020	5,530	-	-
- other short-term temporary differences	2,781	3,049	(41)	-
	7,760	9,362	(948)	(732)
The closing balance comprises:
Deferred tax assets	(1,982)	(833)	(948)	(732)
Deferred tax liabilities	9,742	10,195		-
	7,760	9,362	(948)	(732)

The movements on deferred taxation during the period were as follows:

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
		(Restated)
	£'000	£'000	£'000	£'000
Opening balance	9,362	6,058	(732)	(670)
Exchange differences	(137)	98	-	-
Adjustments for prior periods	82	-	-	-
Arising on acquisition of subsidiary	-	2,362	-	-
Post-employment benefit provisions	248	98	-	-
Charge / (credit) for the period in income statement	(1,169)	(181)	(216)	(62)
Amounts (credited)/charged to other comprehensive income	-	136	-	-
Other	(626)	-	-	-
Closing balance	7,760	8,571	(948)	(732)
IFRS remeasurement	-	791	-	-
Closing balance (restated)	7,760	9,362	(948)	(732)

Temporary differences associated with Group investments

Unremitted earnings of overseas affiliates

No deferred tax liability has been recognised on the unremitted earnings of overseas subsidiaries as no tax is expected to be payable on them in the foreseeable future based on current legislation or where the Group is able to control remittance of earnings and it is possible that such earnings will not be remitted in the foreseeable future.

Unrecognised deferred tax assets

Unrecognised deferred tax assets amounting to nil (2021: £3,012,000) arising on temporary differences in respect of unrelieved tax losses and other temporary differences have not been recognised, as their future economic benefit is uncertain.

The expiry dates of unrelieved tax losses are as follows:

	Group
	31 October	31 October
	2022	2021
	£'000	£'000
Expiring in less than one year	-	-
Expiring between two and 20 years	-	2,713
No expiry date	-	299
	-	3,012

The Group has an unrecognised deferred tax asset on gross capital losses of £3,756,000 (2021: £3,756,000), of which £3,627,000 (2021: £3,627,000) relate to the Company, which have not been recognised as their future economic benefit is not certain.

Factors that may affect future tax charges

There will be an increase in the main rate of corporation tax in the UK from 19% to 25% from 1 April 2023. The deferred tax assets and liabilities have been recognised based on the corporation tax rate at which they are anticipated to unwind.

25 TRADE AND OTHER PAYABLES

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
	£'000	£'000	£'000	£'000
Amounts shown as current liabilities
Trade payables	29,364	24,599	3,207	3,624
Amounts owed to subsidiaries	-	-	8,736	15,030
Other taxes and social security costs	4,176	3,820	736	871
Other payables	11,081	7,232	64	62
Accruals and deferred income	7,627	6,833	1,808	1,412
	52,248	42,484	14,552	20,999

26 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

Contingent liabilities

The Company and subsidiary undertakings have given guarantees in the normal course of business to third parties, including to the Group's bankers. No losses are expected from guarantees given by the Company and subsidiary undertakings.

In the opinion of the Directors, adequate provision has been made for claims and legal disputes and the Directors therefore consider that no contingent liability for litigation exists.

The Group has no contingent liabilities with regard to its interest in the associated undertakings (2021: none).

27 RELATED PARTIES

The Group's related parties are its associated undertakings, subsidiary undertakings and its key management personnel, which comprises the Board of Directors.

The following transactions were carried out with related parties:

Directors' compensation

	Group		Company
	31 October	31 October	31 October	31 October
	2022	2021	2022	2021
	£'000	£'000	£'000	£'000
Salaries and other short-term employee benefits excluding long-term incentives and pension contributions	1,315	1,110	-	-
Share-based payment charge	246	127	-	-
	1,561	1,237	-	-

The remuneration of the directors, both executive and non-executive, of the Company, who are the key management personnel of the Group, is set out in the table above. These figures include amounts payable to third party companies for services of the directors. Certain executive directors, with UK salaries, are entitled to join the Company's Group Personal Pension Plan, to which the Company contributes 5% of their basic salaries. The charge for the period in respect of this was £nil (2021: £nil). No director who served during the year was a member of the Company's defined benefit pension scheme (2021: none).

Directors of the Company control 36.60% of the Ordinary shares of the Company.

Company

	31 October	31 October
	2022	2021
	£'000	£'000
Transactions with subsidiaries:
Purchases	36	20
Amounts owed by subsidiaries	22,371	18,279
Amounts owed to subsidiaries	8,736	15,030
Other items:
Intercompany fees charged by / (received from) subsidiaries	6,388	1,646
Property, plant and equipment
acquired from subsidiaries	5,635	3,226
Dividend income
- from subsidiaries	56,511	-
- from subsidiaries	56,511	-

28 GROUP UNDERTAKINGS

This disclosure is made in accordance with Section 409 of the Companies Act 2006 and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended by the Companies, Partnerships and Groups (accounts and reports) Regulations 2015. A full list of subsidiary undertakings and associated undertakings (showing country of incorporation, which is also the main trading location of the company, and the effective percentage of equity shares held) at 31 October 2022 is shown below. Unless indicated otherwise the equity shares held are in the form of ordinary shares or common stock.

Principal group undertakings which affect the financial statements of the Group are highlighted in bold. Together with the parent company, Me Group International plc, these companies contributed over 90% of the Group's revenue and operating profit.

Company name	Principal Activity	Group interest	Registered office address	Country of incorporation
UK & Ireland
Jolly Roger (Amusement Rides) Limited	Dormant	100%	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
MgInvest Investments Limited	Investment	100%*	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
Me Group International Limited	Dormant	100%	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
Photo-Me (Retail) Limited	Dormant	100%	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
Photo-Me Limited	Corporate	100%	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
Photo-Me Trustee Company Limited	Dormant	100%	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
Xpand Investments Limited	Investment	100%	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
Power-Me Limited	Dormant	100%	Unit 3B, Blenheim Road, Epsom, KT19 9AP	UK
Me Group Ireland Supplies Limited	Operations	100%	Unit A4, Alexander House, Tallaght Cross East, Tallaght, Dublin 24	Republic of Ireland
Continental Europe
Me Group Austria G.m.b.H.	Operations	100%	Industriestraße 7/K01 L/10, 2100 Korneuburg	Austria
Prontophot Belgium NV	Operations	100%	Boulevard Paepsem 8a, 1070 Anderlecht	Belgium
Photo-Me Czech Republic s.p.o.l. s.r.o.	Dormant	100%*	Husova 2117, 256 01 Benešov	Czech Republic
Me-Group SPC Finland Oy	Operations	100%	Unit 3B Blenheim Road, Epsom, UNITED KINGDOM. KT19 9AP	Finland
KIS SAS	Production	100%*	7 Rue Jean-Pierre Timbaud, 38130 Echirolles	France
Me Group France	Operations	100%*	8 rue Auber 75009, Paris	France
Sempa SARL	Operations	100%*	73 D rue du Général Mangin, 38000 Grenoble	France
Me Group GSS	Corporate	100%	8 rue Auber 75009, Paris	France
SCI Immobilière du 21	Property	100%*	7 Rue Jean-Pierre Timbaud, 38130 Echirolles	France
Dreamaker	Operations	100%	80 route des Lucioles 06560 Valbourne	France
Me Group Germany G.m.b.H.	Operations	100%	Gervinusstraße 15-17, 60322 Frankfurt am Main	Germany
Me-Group Italia Srl	Operations	100%	Roma (RM) Via Lovanio 1, CAP 00198	Italy
Kis Italia Srl	Dormant	100%	Milano, Via Tiziano 32, CAP 20145	Italy
Prontophot Holland B.V	Operations	100%	Loonseweg 14, 5527 AC Hapert	Netherlands
KIS Poland s.p.z.o.o.	Operations	100%	ul. Targowa 46/5, 03-733 Warszawa	Poland
Me Group Portugal LDA	Operations	100%	Industrial do Carvalhinho - Fracção K 2860-579 MOITA	Portugal
Me Group Spain Solutions	Operations	100%	28224 - Pozuelo de Alarcón (Madrid), Calle de las Dos Castillas, 33, Ático 7	Spain
Me Group Switzerland AG	Operations	100%	Sonnentalstrasse 5, 8600Dübendorf	Switzerland
Asia & ROW
Me Group Australia Pty Ltd	Operations	100%	4/24 Philip Street, Hawthorne, Queensland 4171	Australia
Now Retail Group Pty Ltd	Operations	100%	Level 9, 123 Albert Street, Brisbane, Queensland 4000	Australia
Photo-Me (Shanghai) Co Limited	Operations	100%*	Room 1102 Tongyong Tower, No. 1346 Gong he Xin Road, Zha bei District, Shanghai 200070	China
Photo-Me Beijing Co Limited	Operations	100%*	Room 1124, Ocean Natural Xintiandi, No.106 East Majiapu Road, Fengtai District, Beijing 100000	China
Photo-Me Chengdu Co Limited	Dormant	100%*	Room 1124, Ocean Natural Xintiandi, No.106 East Majiapu Road, Fengtai District, Beijing 100000	China
Nippon Auto-Photo Kabushiki Kaisha	Operations	100%	Room 1302, Atlas Tower Roppongi, Roppongi 7-7-13,Minato-Ku, 106 0032	Japan
Photo-Me Korea Company Limited	Operations	100%*	Room #203-1, Daeryung techno town 1st, Gasan Digital 2 ro 18, Geumcheon-gu, Seoul, 08592	Korea
Photomatico (Singapore) Pte Limited	Operations	100%	26 Sin Ming Lane, Singapore 573971	Singapore
KIS Technology Company Limited	Dormant	100%	P.1003, Ford Thang Long Building, 105 Lang Ha, Lang Ha Street, Ba Dinh district, Hanoi	Vietnam
Photomaton Maroc SARL	Operations	50%	131 Bd D'Anfares Azur Sidi Belyout,/Casablanca	Morocco

* Investments in subsidiaries not owned directly by Me Group International plc.

Photo-Me CR.s.p.o.l.s.r.o. is owned 20% by Me Group International plc and 80% by Me Group Austria G.m.b.H.

The results of the Group's subsidiaries and associates are consolidated for the period ended 31 October 2022. Certain subsidiaries and associates have a different statutory year end, sometimes due to legal requirements in the country concerned.

The parent company, Me Group International Plc, has issued guarantees under section 479C of the Companies Act 2006, which exempts the following subsidiaries from the requirements relating to the audit of individual accounts by virtue of parental guarantee:

- Jolly Roger (Amusement Rides) Limited;

- Photo-Me (Retail) Limited;

- Xpand Investments Limited;

- Mginvest Investments Limited; and

- Photo-Me Limited.

29 BUSINESS COMBINATIONS

Dreamakers

On 31 March 2022 the Group acquired 100% of the issued share capital of Dreamakers for a consideration of €3,900,000 (£3,274,000), obtaining control of the company on that date.

Dreamakers, which operates under the trading name 'VIP BOX', is a France based, market leader in the rental and sale of selfie stations for private and professional events. This acquisition supports the Group's strategic aim of product diversification.

The acquisition was funded from the Group's cash resources.

Deferred consideration

Of the total consideration, €600,000 (£504,000) is deferred and contingent on future performance. The deferred payment will be due 12 months from the acquisition date. The value will be determined based on Dreamakers' profit before tax over the 12 months following the acquisition date.

Management expects Dreamakers to meet the maximum profit before tax target, so have accrued the maximum contingent consideration value of €600,000 and included this amount in the total consideration.

Acquired assets and liabilities

The purchase price allocation, including determination of the fair value of intangible assets recognised on consolidation has not been finalised.

Goodwill has been calculated using the provisional fair values of the assets and liabilities acquired, with a value of £1,652,000 recognised in the Group's Statement of Financial Position, pending valuation of assets and liabilities acquired.

Pending receipt of the final valuations of the assets acquired, in accordance with IFRS3, the accounts will be adjusted retrospectively within the measurement period of no more than one year from the acquisition date.

The provisional fair values of the assets and liabilities acquired, cash outlay on acquisition and results of the acquired business included in Group results in the year ended 31 October 2022 are shown in the table below.

	£'000
Property, plant and equipment	121
Total non-current assets	121
Inventory	47
Trade and other receivables	372
Cash and cash equivalents	2,031
Total current assets	2,450
Trade and other payables	949
Total current liabilities	949
Total liabilities	949
Total identifiable net assets excluding goodwill	1,622
Goodwill	1,652
Total identifiable net assets acquired	3,274
Satisfied by:
Cash	2,770
Deferred consideration	504
Total consideration	3,274
Cash consideration per cashflow:
Cash consideration	2,770
Net cash acquired	(2,031)
Initial cash outlay on purchase of subsidiaries	739

Revenue	1,756
Profit before tax	71

Société Générale d'Equipement de Restauration (SGER)

On 30 June 2021 the Group acquired 100% of the issued share capital of SGER for a consideration of €3,489,000 (£2,948,000), obtaining control of the company on that date.

SGER, which operates under the trading name 'Resto'clock', is a France based, market leader in pizza vending equipment. This acquisition supports the Group's strategic aim of diversification and becoming a European market leader in food vending equipment. The acquisition was funded from the Group's cash resources.

Due to the proximity of the transaction to the prior period reporting date, the purchase price allocation, including determination of the fair value of intangible assets recognised on consolidation, had not been finalised when the prior period financial statements were approved.

With the purchase price allocation now complete, the Group has during the period adjusted the provisional amounts that were recorded in the prior period financial statements by increasing intangible assets by € 2,491,000 (£2,142,000) and reducing goodwill by the same amount (see note 11).

As part of the purchase price allocation, the Group has recognised separately identifiable acquired intangible assets in accordance with IAS38 and had their fair values assessed by an independent expert.

The fair value adjustments in respect of acquired intangible assets are due to the recognition of €99,000 (£85,000) in respect of SGER's order backlog at the acquisition date; €1,398,000 (£1,202,000) in respect of the patents over SGER's proprietary technology which underpin its future cash generation; and €994,000 (£855,000) in respect of the 'Resto'clock' brand, which has been in existence for over 25 years.

There is a small balance of residual goodwill of €806,000 (£693,000) which we consider is attributable to SGER's acquired workforce.

A deferred tax liability of €629,000 (£541,000), in respect of the patent intangible asset, has been recognised and reflected in the adjusted goodwill value.

Now Retail Group (NRG)

On 3 September 2021 the Group acquired 100% of the issued share capital of Now Retail Group Pty Ltd for a consideration of AUD 3,504,000 (£1,913,000), obtaining control of the company on that date.

Now Retail Group is an Australian owner and operator of automated retail units, with a focus on health, beauty and consumer electronics products. This acquisition supports the Group's strategic aims of geographic and product diversification. The acquisition was funded from the Group's cash resources.

With the purchase price allocation now complete, the Group has during the period adjusted the provisional amounts that were recorded in the prior period financial statements by increasing intangible assets by AUD 1,777,000 (£987,000) and reducing goodwill by the same amount (see note 11).

The fair value adjustments in respect of acquired intangible assets are due to the recognition of AUD 1,352,000 (£751,000) in respect of NRG's non contractual customer relationships; AUD 226,000 (£126,000) in respect of contractual customer relationships; and AUD 199,000 (£110,000) in respect of brand related assets.

There is a balance of residual goodwill of AUD 2,015,000 (£1,104,000) which we consider is attributable to NRG's acquired workforce.

Other changes to the composition of the Group

Disposal of La Wash Group

On 8 April 2022, the group disposed of its Spanish B2B laundry business La Wash Group. This was for consideration of £152,000. The group incurred a loss of £459,000 which has been recognised in other losses in the income statement.

Acquisition of non-controlling interest in SCI du Lotissement d'Echirolles

The Group owned 61% of SCI Lotissement d'Echirolles (SCI), with the remaining 39% previously being held by a third party non-controlling interest.

In April 2022, the Group acquired the remaining 39% from the non-controlling interest increasing its ownership of SCI to 100%. The consideration paid for the non-controlling interest was €3,554,000 (£2,985,000).

In accordance with IAS27 this acquisition was accounted for as an equity transaction, reducing the Group's equity by €3,554,000 (£2,985,000).

30 PERIOD SUMMARY

Income statement (unaudited)

	2022	2021	2020	2019	2018
	£'000	£'000	£'000	£'000	£'000
Revenue
UK & Ireland	41,996	29,644	54,623	52,919	63,707
Continental Europe	177,839	145,009	195,230	130,661	121,134
Asia	39,945	39,751	60,392	44,538	44,973
Total revenue	259,780	214,404	310,245	228,118	229,814

Operating profit	56,681	29,335	3,317	42,739	46,106
Net finance (cost)/income & Other gains	(3,327)	(780)	(2,825)	(146)	4,069
Profit before taxation	53,354	28,555	492	42,593	50,175
Taxation	(14,561)	(6,703)	(2,844)	(11,314)	(9,889)

Profit after taxation	38,793	21,852	(2,352)	31,279	40,286
Attributable to:
- equity owners of the Parent	38,793	21,713	(2,305)	31,226	40,134
- Non-controlling interests	-	139	(47)	53	152
	38,793	21,852	(2,352)	31,279	40,286

Earnings per share - Basic	10.26	5.78	(0.62)p	8.27p	10.64p
Earnings per share - Diluted	10.23	5.72	(0.62)p	8.26p	10.60p

Dividends - interim	2,60p	0.00p	0.00p	3.71p	3.71p
Dividends - final	3,00p	2,89p	0.00p	4.73p	4.73p
Dividends - special	0.00p	6,50p	0.00p	0.00p	0.00p
Total dividends	5,60p	9,39p	0.00p	8.44p	8.44p

Statements of financial position

	2022	2021	2020	2019	2018
	£'000	£'000	£'000	£'000	£'000
Intangible assets	32,736	34,502	32,739	41,816	27,395
Property, plant and equipment	101,090	91,973	90,937	95,353	93,232
Other non-current investments	21	21	57	415	1,583
Other non-current assets	7,805	3,966	3,743	5,693	10,047
Current assets	184,716	141,688	139,760	128,723	106,652
Assets held for sale	-	-	-	-	-
Total assets	326,368	272,150	267,237	272,000	238,909

Share capital	1,889	1,889	1,889	1,889	1,887
Share premium	10,627	10,599	10,599	10,588	10,366
Reserves	120,133	115,486	99,693	129,500	131,004
Equity of the Parent	132,649	127,974	112,181	141,977	143,257
Non-controlling interests	-	1,720	1,689	1,870	1,553
Total equity	132,649	129,694	113,870	143,847	144,810
Total non-current liabilities	94,039	68,900	52,968	64,450	35,959
Total current liabilities	99,680	73,556	100,399	63,703	58,140
Total equity and liabilities	326,368	272,150	267,237	272,000	238,909

Net cash	34,021	34,919	21,877	16,338	26,688

Note: The figures above have been extracted from the accounts for the relevant period and have not been adjusted for changes in accounting policies as a result of adoption of new accounting standards.

Financial & operating statistics

	2022	2021	2020	2019	2018
Capital expenditure - photobooth & vending machines £'000	27,205	22,563	38,435	24,938	35,588
Capital expenditure - research & development £'000	1,418	1,802	2,296	1,631	2,510

EBITDA £'000	92,241	65,077	87,313	69,705	70,981
EBITDA % of revenue	35.5%	30.4%	28.1%	30.6%	30.9%
Number of vending sites	43,900	43,800	44,500	47,000	47,000

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Company Announcements

Audited Annual Results

Group Statement of Comprehensive Income

Group Statement of Financial Position

As at 31 October 2022

Company Statement of Financial Position

Group Statement of Cash Flows

For the period ended 31 October 2022

Company Statement of Cash Flows

For the period ended 31 October 2022

Group Statement of Changes in Equity

For the period ended 31 October 2022

Company Statements of Changes in Equity

For the period ended 31 October 2022

o Short-term employee benefits

o The normal retirement age for males is between 60 - 65 years and for females between 59 - 64 years for both 2022 and 2021.

o The mortality tables used in 2022 and 2021 were the BVG 2020 GT tables

o The mortality tables used in 2020, 2019 and 2018 were the BVG 2015 GT tables.