Stargroup to smash the $1 million mark

Published at Feb 8, 2016, in Technology

Payments company Stargroup Limited (ASX:STL) has backed revenue to surge above the $1.2 million mark on the back of a 319% year-on-year increase in ATM revenue.

It told its shareholders this morning that it was expecting to hit quarterly revenue above $1.2 million, and that the March quarter would be the ninth quarter in a row STL had managed to grow revenue.

It is expecting 60% quarter-on-quarter growth from its ATM unit, equating to 319% year-on-year.

The growth in revenue comes as STL folds in the full impact of its Cash+ acquisition and it starts to see the benefits of a cost reduction program.

Projections for STL's quarterly revenue

Projections for STL’s quarterly revenue

During last quarter’s results, STL said that only one month of revenue from the additional 109 machines the Cash+ acquisition brought had been folded in.

With a full quarter of contribution, however, STL is expecting revenue to climb.

It also recently told investors that it was able to re-negotiate key supply contracts in its favour.

Elsewhere, STL said it was on track to better its ‘transaction per machine’ metric.

“The main KPI for the network, the quarterly average of transactions per ATM, is on track to outperform the previous quarterly average of 667 transactions per ATM which was considered ‘industry best’,” STL CEO Todd Zani said.

“Our focus is on the ‘transactions per machine’ metric as this is the best guide as to how well Stargroup is investing shareholders’ capital.”

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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