Digital imaging group Photo-Me International has warned on profit for the second time in a month. At today's interims the company said product launch delays have hit revenue forecasts at its wholesale labs, a part of the Manufacturing division.

A statement from the company read: 'Whilst Vending is trading fairly well, the board does not anticipate a strong second half for Manufacturing. Accordingly, the Board now believes that the group is unlikely to be profitable in the second half.'

Serge Crasnianski quit as chief executive earlier this month following ongoing problems in the business and pressure from activist shareholders to shake up the management team. He has been replaced by Thierry Barel.

First-half pre-tax profit before one-off items fell 39% to £7.3 million. Photo-Me scrapped the sale of its Vending division in September. The average selling price of minilabs is falling, as is the volume of unit sales for its wholesale labs. New chairman David Young said the fall in half-year profits was 'disappointing but understandable.'

Young said: 'In the half year, Photo-Me was faced with the distraction engendered by the vending division disposal process and the proposed corporate restructuring. It also had to contend with the unsettling affect on customers, staff and suppliers of the related uncertainty and also of the unsought prominence of the group's corporate affairs.'

Photo-Me has historically made more money in the first half of the year, prompting it to reiterate a cautious outlook for the current six-month trading period.

The company is monitoring the trend in some countries towards the centralisation of biometric data collection, involving finger and iris scans as well as digital images. Photo-Me said this had the potential to impact on Vending, which has 21,000 photo booths and generates three-quarters of the group's revenues.

It's not entirely bad news for investors, however. Photo-Me maintained its interim dividend at 1p and intends to buy-back shares early next year. Shares in the group were down 12% to 34.5p in early trading on Monday.