PCX Principle Cap.

RNS Number:6889C
Principle Capital Holdings S.A.
23 August 2007


         REQUISITION OF SHAREHOLDER MEETING - PHOTO-ME INTERNATIONAL PLC


Cycladic Capital LLP ("Cycladic") and Principle Capital Holdings S.A., on behalf
of its subsidiary company, Principle Capital Fund Managers Limited ("Principle
Capital"), make the following announcement:


Requisition

Cycladic and Principle Capital have today delivered a requisition to the board
of directors of Photo-Me International Plc ("Photo-Me" or the "Company") to call
an extraordinary general meeting ("EGM") of the Company. The requisition calls
for a meeting to allow shareholders to vote on the following resolutions:

i) the immediate removal of Vernon Sankey as a director of the Company; and

ii) the immediate removal of Serge Crasnianski as a director of the Company.


Cycladic and Principle Capital believe that a change of the senior leadership of
Photo-Me is necessary if the Company is to create value for shareholders in the
future. Under the current leadership the Company has suffered from
unsatisfactory operational performance, a badly managed strategic review process
and a lack of credibility with investors.

The requisition has been made by shareholders, including funds managed by
Cycladic and Principle Capital, holding in aggregate 65,518,393 shares,
representing 18.2% of the total voting rights of the Company. However holders of
a further 28.2% of the Company's shares (either directly or through a CFD
position) have already expressed support for these resolutions to Cycladic and
Principle Capital representing a total of 46.3% of the total voting rights of
the Company in support of these resolutions. Cycladic and Principle Capital will
seek incremental shareholder support and believe that over 50% of the Company's
shareholders will support these resolutions.


Unsatisfactory operational performance

Photo-Me's recent history of operational mismanagement has led to a profit
warning in each of the last two years. Specific examples include:

*  failure to manage the supply chain such that completion of CVS's initial
   minilab order was delayed. This led to the profit warning in January 2006
   despite the Company assuring investors in December 2005 that delivery was on
   schedule;
*  failure to manage the supply chain during the production ramp-up of the
   new DKS3 machines leading to vastly reduced sales and the profit warning in
   March 2007;
*  failure to exploit opportunities from significant consolidation in the
   mini-lab industry;
*  failure to anticipate the need to upgrade the photo-booth estate to ensure 
   the product complied with ICAO requirements; and
*  the ill-considered acquisition of Deith in January 2006 where a 60% stake
   was acquired for #1.5m and sold in April 2007 after losses of #2.2m.


Strategic review process

The Company first announced it was undergoing a strategic review in June 2006.
In the 14 months that have since elapsed, Cycladic and Principle Capital believe
that the Company has made insufficient progress and is only just at the stage of
having received interest for the vending division; the "significant" return of
capital has yet to materialise and shareholders are still waiting for a
confirmed timetable for the corporate restructuring.


Poor investor relations

Photo-Me has a long history of poorly managing investor expectations including
inaccurate forecasts, overoptimistic assessments of the business' prospects and
repeated failures to deliver change in a reasonable timeframe. As a result,
Cycladic and Principle Capital believe that the Chairman and Chief Executive's
credibility with shareholders is at such a low ebb that confidence in the
Company can only be restored by a change of senior leadership.


Chief Executive Officer

The Company's stakeholders have been aware for some time that the Chief
Executive has been considering his retirement. This has created an atmosphere of
uncertainty within the Company beyond the destabilising effects of the lengthy
strategic review process. Given the uncertainty over the timing of his departure
and the size of his shareholding in the Company, Cycladic and Principle Capital
believe that it is impossible to find credible successors. In light of the
operational mismanagement outlined above, Cycladic and Principle Capital believe
that it is imperative that the Chief Executive leaves the Company as soon as
possible so that the Company's turnaround can begin under new leadership.


Chairman

Since February 2005, when Mr. Sankey took over as Chairman of the Company's
board of directors (the "Board"), the Company's total return to shareholders was
a negative return of 42%. Over the same period, the FTSE All Share Index's total
return was a positive return of over 39%. During his time as Chairman, he has
failed to ensure that the Board complies with the requirements of the Combined
Code despite having originally been appointed to the Board in response to
shareholder's concerns over the poor corporate governance at the Company.
Furthermore, under his supervision in February 2007, two executive directors
sold shares in the Company 10 days before a significant profit warning which
caused the share price to fall by 32%.


Concluding the strategic review

It is imperative that the Company has credible senior leadership in order to
make the right decisions for shareholders and communicate more effectively with
the market. Cycladic and Principle Capital are encouraged that there is
sufficient interest from potential acquirers of the vending division at a price
that is potentially acceptable to shareholders. Independent of any sale of the
vending division however, Cycladic and Principle Capital believe that the Board
would face a significant challenge in deciding how to create most value for
shareholders in the absence of a Chief Executive who understands and can realise
the value from the businesses that will or should be retained.


Future leadership

Cycladic and Principle Capital have confidence in the abilities of the
independent non-executive directors to stabilise the Company, in the absence of
a Chairman and Chief Executive, and to begin the turnaround required for future
growth. If the requisitions are successful, Cycladic and Principle Capital would
support the appointment of Martin Reavley, the current Senior Independent
Director of the Company, as Interim Chairman of the Board. Further, Cycladic and
Principle Capital are aware of a number of high quality and available candidates
who might be willing to become the new Chief Executive of the Company but who
have been reluctant to pursue their interest given the current Chief Executive's
continued involvement. Once that obstacle is removed, Cycladic and Principle
Capital believe the Board will be able to appoint a competent successor in a
very short time-frame.


Timing

Whilst the Chairman is up for re-election at the annual general meeting on
October 17th, Cycladic and Principle Capital believe that it is imperative that
the issue of the Chief Executive's succession is considered at the same time as
the position of the Chairman and that this is done prior to a decision regarding
the sale of the vending division. Cycladic and Principle Capital have therefore
been forced to requisition an EGM calling for the immediate removal of both the
Chairman and Chief Executive to protect the value of their investments and those
of other shareholders.


                                    - Ends -


For further information:

Bell Pottinger
Olly Scott
+44 78 12345 205


Cycladic Capital
Gijs de Reuver
+44 20 7529 1865


Principle Capital
Anne Dalen
+44 20 7240 3222


Numis Securities as Nominated Adviser to Principle Capital Holdings S.A.
Stuart Skinner
+44 20 7260 1000




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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