ATM operator Stargroup has reported a 65 per cent revenue increase on the previous quarter. The company, deploys 260 ATMs around Australia, operating predominately in the convenience market, also saw a 57 per cent increase in the average number of active ATMs compared to prior quarter and a 51 per cent increase on ATM transactions compared to prior quarter.
Mr Todd Zani, Stargroup’s CEO and executive chairman, told C&I the company’s business model for ATM deployment includes a fee split with the merchant (based on a $2.50 direct charge to the customer) and the company provides all maintenance of the machine for free for the life of the contract including parts, labour and consumables.
Mr Zani said Stargroup’s increased revenue would benefit many convenience stores as “most stores see between a 10 per cent and 15 per cent lift in profit with one of our ATMs particularly if they take advantage of the coupon/voucher and advertising capabilities at the ATM”.
With growing transactions and increasing total revenue, Mr Zani said the result was a “testament to our disciplined principle of only placing our ATM machines in high quality sites that our experience tells us will yield acceptable capital returns”.
“We have successfully migrated all of the Cash Plus ATMs acquired in December and we are now starting to take market share from the independent service operators in the Australian ATM market. Our sales pipeline is looking very good for the next quarter also”, said Mr Zani,
“Stargroup’s average monthly transactions per ATM continues to be arguably the industry best with the average for the last quarter being 648 transactions a month per machine. At this rate we expect to pay back the capital from each ATM within 15 months from purchase.
“We continue to focus on the ‘transactions per machine’ metric as this is the best guide as to how well we are investing our shareholders capital. All of our KPI trend lines are on the up”.
What’s next for Stargroup?
Stargroup manufactures the CashPod ATM series but also deploys Hyosung TTW ATMs and last month finalised the integration of ATMs acquired from Cash Plus in December 2015.
Stargroup is working closely with suppliers Claim Co and Anthem Software to prepare for a mass rollout of the company’s EFTPOS/payWave offering to their clients and the broader Australian market.
The company expects the overall outlook for 2016 to be very positive.
“We are continuing to build a very solid ATM network and the release of the recycler ATM and our EFTPOS IP in the next quarter will allow us to continue to deliver consistent growth as part of the long term plans outlined to our shareholders at our AGM.”
The company’s future plans include organic growth in quality only ATM sites via disciplined site selection; growth through the acquisition of smaller ATM deployers; entering the EFTPOS space rolling out new technology products, such as the company’s Recycler ATM that allows users to both withdraw and deposit money; and continued sales of ATMs and software in Australia.
“Our overarching strategy is now starting to come together with the ATM division providing the base load income for the business with solid growth and the EFTPOS and financial payments division providing the blue sky opportunity,” said Mr Zani.