Asda to sell loss-making photo division

Supermarket giant Asda has agreed to sell its loss-making photo division to a listed group in a deal worth up to £6m.

Photo-Me is to buy the division which consists of 191 photo centres, as well as 172 self-service kiosk sites located in Asda stores.

These businesses will be managed by Photo-Me under a ten-year concession.

As part of the acquisition the employees of the photo division will transfer across to the group.

Serge Crasnianski, chief executive of Photo-Me, said: "This is an interesting opportunity to significantly expand our UK business in a strong set of locations and increase our market share in the digital photo printing market, which we believe has growth potential in the digital age.

"Photo-Me is the leader in its field with a wide range of attractive and innovative products which we plan to introduce into the Asda stores as soon as possible, and we believe will improve the level of trading and overall performance over the next two years and beyond."

The consideration for the photo division is £3.35m, subject to downward adjustment in certain circumstances.

Photo-Me has also agreed to buy the inventory available at each photo centre at the date of completion, as well as central consignment stock, estimated at £2m.

The total consideration to be paid is currently estimated at £5.35m and is capped at a maximum of £6m.

In the calendar year 2015, the photo division generated unaudited sales of circa £19.3m and made an unaudited loss of £3.4m. 

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