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Stargroup achieves record ATM revenues in August with more to come

Perth based Stargroup told the ASX this week they had achieved record revenues from their Automatic Teller Machine division in August and that total quarterly revenues were on track to outperform last quarter by a whopping 50%.

The company said it was expecting total quarterly revenues of $1.8m compared to $1.2m last quarter as the organic roll out of its ATM machines continues to increase with 356 machines currently on the street. In March 2014, total quarterly revenues for the company were barely $100 000 with that number jumping exponentially every quarter without fail ever since.

Stargroup’s aggressive merger and acquisition strategy is also now starting to show up in its top line as the most recent acquisition of a 97 machine ATM network fully integrates with the existing network.

The company said its actual 2016 financial year revenues were 242% higher than the 2015 financial year and that year to-date revenues were already outperforming last year by 149%.

Interestingly, it appears that Stargroup have not sacrificed quality for quantity in terms of site selection with their ATM roll out given their reported average transactions of 615 transactions per machine per month.

Stargroup Executive Chairman and CEO Todd Zani says this number is arguably the best in the industry and easily eclipses ATM machine goliath DC Payments who recently reported just 508 transactions per machine per month.

Mr Zani said “We are still easily paying back our capital from each ATM within 15 months from purchase and given our recent further increase in scale we are looking to review some of our key supply contracts in the business to further reduce our costs of goods sold and maximize our profits and will make announcements in relation to as such, shortly.  It is interesting to note that when others have acquired networks their averages fall whereas ours are increasing which further highlights we are making high quality acquisitions”.

Contrary to popular opinion, ATM machines in Australia are actually on the rise.

A recent report released by the Australian Payments Clearing Association shows that the number of ATMs in Australia actually increased by 2% in the last quarter.  The total number of ATMs in circulation is now 32,156.

That figure was around 30 000 just 3 years ago and was only 6000 back in 1994.

In fact the graph produced by the Australian Payments Clearing Association is definitive in so much as it shows undeniable growth in ATM numbers almost every year since 1994 with just a few minor blips.

Stargroup’s strategy has always been to anchor the business with a successful ATM division and then shoot the lights out with other blue sky payment technologies such as EFTPOS.

This strategy appears to have received a shot in the arm last week after the company announced they would distribute “next generation” EFTPOS terminals in Australia and New Zealand for major Swedish EFTPOS company, West International AB.

Importantly West International have agreed to give Stargroup the software code to their terminals, an advantage usually only enjoyed by the major banks who guard their code jealously.

Zani says this opens up a raft of opportunities for Stargroup who can now tailor their terminals to suit the client.

Theoretically this means the company’s EFTPOS terminals could potentially accept staff cards from a major hospital for instance with the sale price charged back to a house account. Alternatively they could now accept major buying group cards through their EFTPOS terminals and a whole host of other similar opportunities are now in play according to Stargroup management. 

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Stargroup (STL)

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1 year TSR5 year TSR
45thSportsHero93%-42%
202ndUltima United11%13%
725thUltracharge-62%-7%
771stStargroup-70%-23%
741 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
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09/08/17
$12k Bought
27/06/17
$0 Other
27/06/17
$35k Bought
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Revenue

216th↓Stargroup$17k
218th-Kabuni$10k
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239 listed industrial companies ranked by revenue.
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