Stargroup investment in manufacturer starts to pay
ASX listed ATM machine operator Stargroup’s 19.25% investment in their Korean ATM machine supplier and manufacturer NeoICP, is now officially more than just a strategic tie up.
NeoICP recently announced they had booked a AUD$1.9m profit (EBITDA) for the first 6 months of the 2016 financial year, blitzing last year’s full year result of just $1.7m.
With a 19.25% stake in NeoICP, Stargroup are potentially staring at a wind fall of up to $372K for the 6 month period and with a formal dividend payment policy in place at NeoICP, the company expects to receive at least a 30% dividend for the period.
Importantly, NeoICP declared a significant AUD$28.6m worth of net assets as at the 31st of December 2015 and Stargroup have only been carrying this investment on its own books at just over AUD$900K.
The company says it will now revalue its stake in NeoICP on its own books following a couple of years of sustainable profits at Neo, potentially significantly increasing Stargroup’s stated net assets.
Mr Todd Zani, Stargroup’s CEO and Executive Chairman said “Stargroup is pleased with the continued improvement in the NeoICP results….clearly our investment is currently undervalued in our own books and we will be making an upward revaluation of this investment. We believe that it is reasonable to expect a future dividend payment from this investment, in line with the policy that is in place.”
“NeoICP are making significant inroads into the distribution of its products throughout the Asia Pacific region including the recent distribution of its casino settlement machines, cash redemption terminals and back office technologies in Macau.”
“They have also made good progress with their cash redemption terminals in China, Sri Lanka, Malaysia, Cambodia, Turkey and also South Africa.”
“The reciprocal shareholdings between Stargroup and NeoICP sets us apart in the ATM market place. Our joint ownership of each other means that we have an edge over our competitors and we consider that an ongoing dividend stream from our investment in NeoICP is the icing on the cake.” Said Mr Zani