Stargroup boosts revenue by 50%

Published at Jan 11, 2016, in Technology

Payments player Stargroup (ASX:STL) has recorded its eight quarter of record revenue in a row, and says all the signs are pointing towards a ninth.

STL told its shareholders this morning in a pre-open release that it had quarterly revenue of about $750,000, which was a 24% jump on gross revenue quarter-on-quarter, and more than double on a year-on-year basis.

The result was driven by a 50% hike in ATM revenue for the quarter on the back of a 51% increase in ATM transactions.

STL said ATM revenue reached almost $350,000 for the quarter, but there would be more to come in the next quarter.

Chart showing growth in STL's ATM network and transactions.

Chart showing growth in STL’s ATM network and transactions.

In October last year STL announced that it would acquire Cash+ and its network of 109 ATM machines.

The latest quarterly result, STL said, only contained one month of contribution from the new 109 machines.

STL currently has 230 active ATM machines in the field.

“This quarterly result has only incorporated on month’s results of the recently acquired ATMs from Cash Plus and therefore we will also see a significant improvement in our results in the next quarter,” STL CEO Todd Zani said.

Average transactions per machine reached 667 per month during the quarter, a 9% increase quarter on quarter.

STL said it was focused primarily on the transactions per machine metric as an indicator of growth as it’s “the best as to how well we are investing our shareholders’ capital”.

It said its result of 667 transactions per month put more established players in the space in the shade, including Canadian-listed DC Payments, over which STL enjoyed a 20% premium.

About STL

Back in September STL merged with iCash Payment Systems to create a combined ATM and EFTPOS company.

It has a network of ATMs around Australia, taking a clip on each transaction, but it also has longer term plans to get into the EFTPOS game, adding another source of revenue for the combined company.

STL is also the only listed ATM company which has a direct stake in the manufacturer of its ATM machines, namely NeoICP in South Korea.

It has estimated the stake helps reduce the costs of manufacturing machines by about 30%, saving $1.1 million in capital expenditure each year.

It has also sought to diversify into other areas such as ‘cash recycler’ ATMs and PayWave Technology.


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