Stargroup Ltd (ASX:STL) is set for yet another record breaking quarter, expecting revenues of over $2 million for the December quarter.
Considering FY2016 total gross revenue was $3.6 million, the company is continuing to exhibit impressive growth from its ATM and EFTPOS divisions.
Stargroup is in complete control of the ATM cash cycle from switching, processing, deployment, manufacture and cash replenishment.
Furthermore, thanks to the 5 year distribution agreement signed with Nasdaq-listed West International AB, Stargroup will look to strengthen its market position in the EFTPOS industry.
Stargroup will also complete its acquisition of Indue Limited on 31 December 2016
Catalysts to be delivered in 2017
Significant catalysts to be delivered in 2017 include:
- Major cost savings of >50% since 1 July 2016;
- Launch of new EFTPOS technologies in early 2017;
- The intelligent deposit ATM launched in October 2016 into remote communities;
- A significant % increase in revenue and EBITDA forecast for FY17; and
- Maiden dividend payment earmarked for June 1 2017.
This follows a busy past couple of months for Stargroup which included:
- 29 September: ATM Switch acquisition;
- 13 September: $15 million cash agreement with Goldfields Money Ltd (ASX:GMY);
- 12 September: Listed on Frankfurt stock exchange; and
- 30 August: EFTPOS distribution agreement with West International.
Peer comparison
Stargroup has a market cap of circa $20 million and is forecast to produce FY17 revenue of $10 million and EBITDA of $2 million, which positions it attractively compared with its peers:
- Directcash Payments Inc (TSE:DCI) - $520 million market cap, $270 million revenue, $69 million EBITDA;
- Tyro Payments Ltd (unlisted) – Recently valued at $450 million, $95 million revenue, $0.8 million EBITDA;
- Mint Payments Ltd (ASX:MNW) - $42 million market cap, $5 million revenue, -$5.5 million EBITDA; and
- Transaction Solution International Ltd (ASX:TSN) - $40 million market cap, $0.12 million revenue, -$0.99 million EBITDA.
Furthermore, Stargroup:
- Is the only ASX listed ATM operator deploying in Australia;
- Is the only ATM operator that has an ownership interest in its manufacturer, South Korean based NeoICP which also manufactures back office, coin counting and casino settlement solutions;
- Has industry leading average transactions per ATM, per month of 620;
- Had net assets of over $20 million including tax assets at the end of 2016 financial year;
- Recently acquired Indue, which will see Stargroup become its own ATM payments and processing provider for 70 other IADs, 1,700 ATMs and 1,350 modems in Australia, processing >12 million transactions per annum; and
- Is an EFTPOS provider developing unique EFTPOS facility and processing for existing partner client base of >45,000 businesses for rollout to that customer based in 2017 and future years.