STL raises cash to complete revenue-boosting deal
Published 01-JUL-2016 11:42 A.M.
|
2 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
StarGroup Limited (ASX:STL) will move ahead with its acquisition of CashMyATM after raising more than $5.8 million to fund the deal.
It announced this morning that it had raised the cash from an entitlement offer and private placement, allowing it to move ahead with the deal.
Overall the entitlement offer closed 97.4% subscribed – something which STL CEO Todd Zani said was a great result given the jitters in the market right now.
“The company was pleased with the strong support and take up of shares from existing shareholders, particularly given the Brexit and its impact on our local markets.”
A $3 million private placement was followed up by a 1-for-6 rights issue which raised $2.84 million.
The CashMyATM acquisition
STL announced its proposed acquisition of the ATM group, which has 97 machines – and should the acquisition go through STL will have a network of 365 machines.
It previously said the acquisition would have the effect of boosting annual revenue in FY17 from a projected $9.3 million to $11.4 million.
Investors should note that these are projections only, and there is no guarantee of it panning out exactly like this.
STL is slated to pay $4.54 million as compensation for the deal – which is structured in cash and shares.
CashMyATM’s network of 97 machines process a total of 800,000 transactions per year – and combined with STL’s current network transactions should reach 2.9 million.
On completion of the acquisition, Jason Warren, CEO of CashmyATM, has agreed to join Stargroup as its national business development manager.
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.
A key advantage STL has over many of its competitors is that it is the only listed ATM company which has a direct stake in the manufacturer of its ATM machines, namely NeoICP in South Korea.
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.
