BRITISH photo services equipment group Photo-Me International Plc posted a 33-percent fall in first-half underlying profit yesterday.

The company forecast a second-half loss too, sending its shares nearly 6 percent lower.

For the half year to October 31, the group's profit before exceptional items was 5.2 million pounds (US$8.1 million), down from 7.8 million pounds last time, despite a 9-percent increase in revenue to 115.9 million pounds.

Photo-Me blamed the profit fall on the global economic crisis.

It said photo-processing equipment sales in its sales and servicing division were affected by customers' difficulties in accessing finance, while the retail photographic market saw reduced confidence.

"For sales and servicing ... prospects for the second half are poor. Accordingly, the board believes that the group will be loss-making in the second half," said chairman Hugo Swire.

He said Photo-Me's operations division "remains relatively resilient."

Looking further out, the chairman said the introduction of biometric data requirements for passports in the European Union represents "a potentially serious threat to the group's ID photography business."

He said the threat was most acute in France, where government proposals favor the effective nationalization of official ID photography, not just for passports but also for ID cards.

During the first half, Photo-Me cut its net debt from 45.5 million pounds to 29.9 million.

It said it continues to trade comfortably within its loan covenants and as of October 31 had over 20 million pounds of unused bank facilities. No dividend will be paid.

Shares in Photo-Me, which have fallen about 63 percent over the last year, were down 0.75 pence to 12.25 pence a share yesterday morning, valuing the business at about 45 million pounds.