PHOTO-ME’S executives might not wish to be reminded of the company’s recent history. A deal with BT in 1999 to put internet access into Photo-Me’s photo booths turned the company into an apparent dot-com darling ahead of the new millennium. But, come January 2000, with the share price peaking at 436p, things began to turn for the worse. The internet plan never really took off and fears about how the company would fare with the shift to digital technology dented investor sentiment.

A £28 million share sale by Serge Crasnianski, chief executive, in that month did not go unnoticed by investors. Especially as a string of profit warnings followed, driving the shares as low as 75p during the year.

In August, Ernst & Young, the group’s auditor, forced it to issue a warning after it questioned the way the company had treated the sale of equipment to pay for a minority stake in its Japanese business. In June of that year, it emerged that some of Photo-Me’s operations had been sold to a company owned by two of Photo-Me’s directors at the time.

Vernon Sankey, the former chief executive of Reckitt & Colman, was brought in as deputy chairman in October, helping to see off a shareholder revolt. He succeeded Dan David as chairman in February this year.

The company spent three years in the red, before recovering in 2004 to a £15 million profit. In 2002 it was forced to scrap its dividend and it saw its shares sink to 14½p.

In the year to April 2005 profits rose to £22 million as the group’s focus on exploiting the take-up of digital cameras combined with cost savings in its manufacturing business to drive growth.

Mr Crasnianski, a trained nuclear physicist, joined the company in 1994 with its acquisition of KIS, his Grenoble-based photo technology company. He holds 19 per cent of Photo-Me and has more than 100 patents to his name.

He started KIS in 1963, straight from college, and later held a seat on the Photo-Me board before the takeover.

Photo-Me traces its creation back to 1958, 12 years after the first photo booth was developed. In 1962 it floated on the stock market as Photo-Me International. After its acquisition of KIS, the group went on to buy, in 1998, its rivals Prontophot and Photomaton.

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