Photo-Me (LON:PHTM) downgraded its 2019 profit guidance on Wednesday, after a weak performance from its Japan photo division.

The group blaming a market over-supply in its Japanese photo identification business, with Japan having the highest density of photobooths worldwide – something that has only increased since the Japanese government brought in its photo ID scheme two years ago.

Operators installed photo machines to cater for the expected demand, which failed to appear. Oversupply now troubles the Japanese market, leading Photo-Me to warn on profits for the 2019 year.

The group is now expecting to make pre-tax profit of around £44 million for the year to April, below market expectations.

“Although no final decision has yet been made, the board currently expects that it will maintain the group’s existing dividend policy at the full year results,” Photo-Me said.

However, the group’s laundry business has continued to perform well, with revenue up 49 percent to £32.3 million.

Shares in Photo-Me are down 21.41 percent at 118.99 (0848GMT).