South Korean investment to grow: STL

Published at Aug 11, 2016, in Technology

Stargroup Limited (ASX:STL) will bag a dividend which is “larger than expected” from a key investment – and its asset could yet get more valuable.

The ATM player told its investors that Korean ATM and payment machine manufacturer NeoICP booked full year revenue of just over $25 million, which is up 18% on the previous year.

NPAT growth was booked at 60.95% for the year, up to $1.6 million while the net assets of the company was listed at $17.2 million.

NeoICP manufactures the ATMs in STL’s network, with STL holding an 11.28% stake in the company.

In light of the positive financial result, STL was able to accrue a dividend of $US60,000 ($A78,230) – a figure which STL CEO Todd Zani was “larger than expected”.

“We continue to believe that our investment is undervalued in our own books and [even though] we did make an upward revision in the half year result from $938,368 to $1,524,597,” he said.

Zani’s remarks are being driven by revelations that NeoICP recently opened a new office and manufacturing plant – neither of which are counted as part of NeoICP’s asset base in the accounting period.

Should these new assets add to NeoICP’s asset base, STL could have a case for re-writing the value of its stake in the company.

Causing STL even more optimism is talk that NeoICP could list on the Korean exhcnage, potentially opening up a new pool of capital for the company.

Investors should note that this is not guaranteed at this stage, and should always consult a professional financial advisor before deciding whether or not to invest.

About StarGroup Limited (ASX:STL)

Back in September 2015 STL merged with iCash Payment Systems to create a combined ATM and EFTPOS company, competing with globally prominent names such as DCI Payments, based in Canada.

STL’s business model centres on its network of 230 ATMs dotted around Australia where the company collects fees from each transaction. However, STL wants to extend its reach and influence in the small payments niche by offering EFTPOS services to retailers.

The frequency of EFTPOS transactions to pay for small ticket items, including new features such as PayWave, are growing strongly in Australia on the back of a gradual move into a cashless society that relies less on physical notes and coins.

STL hopes its EPTPOS unit will add another source of revenue for the company once fully rolled out and implemented.

Earlier this year it completed the acquisition of MyCashATM, which added 97 ATMs to its network – potentially boosting annual revenue in FY17 from a projected $9.3 million to $11.4 million.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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