Stargroup flags asset re-rating
Published 28-SEP-2015 10:24 A.M.
1 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Tech player Stargroup (ASX:STL) has flagged the possibility of raising the value of one of its chief investments after Korean company NeoICP reported its results late last week.
The Korean outfit, which STL has a 19.25% stake in, reported EBITDA of $1.6 million with a reported NPAT of $1 million.
While the value of NeoICP’s assets was reported as $26.6 million, STL currently values its stake at just $938,368.
However, its equity interest is theoretically worth $5.1 million.
While STL did not offer guidance on what it would seek to lift its valuation to, it did say it may consider doing so “later this year”.
Stargroup’s investment in NeoICP is a strategic one, with the Korean company manufacturing the ATMs Stargroup rolls out around Australia.
Last month STL merged with iCash Payment Systems to create an ATM and EFTPOS company, whereby STL takes a clip on all transactions put through the machines.
STL has estimated its stake in NeoICP helps reduce costs by around 30% and saves it $1.1 million in capital expenditure per year.
It estimates its 100-plus ATM network brings in 600 transactions per month per machine, with STL charging customers $2.50 per withdrawal.
Margin is about 80c after costs, with STL aiming to generate $300 to $400 per machine per month.
STL’s gross revenue for 2015 is forecast to be $1.5M, an 840% increase on 2014. In 2016, STL expects to generate $4.5M
It has also sought to diversify into other areas such as ‘cash recycler’ ATMs and PayWave Technology.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (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 and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.