I have done some work on the ½ yr numbers and the revised forecast statement and compared it to their forecasts back in August with their full year presentation. I found the following:
CUS forecast $93 mill rev for the full year based on existing network plus aggressive acquisition and organic growth for the full year. While they did not buy any other networks (thank god!!) they clearly do have a plan to aggressively role out via organic growth, because $5 mill of the ½ yr capex was to acquire 500 new ATM’s.
For the purposes of this exercise, I have assumed an historical transaction rate of approx 1300 per machine per month (5100 machines x $1.03 per trans x 1300 transactions x 12 months = annual rev $82 mill).
1)If they had rolled out 500 machines during this year they would have averaged 5400 machine on site for 2008fy. Since they didn’t they have missed out on 300 machines x 1.03 x 1300 x 12 = $4.82 mill rev extra.
2) Smoking bans in NSW and SA came in Aug. NSW hold 33% of CUS fleet and SA holds 12%. Of the entire fleet, 46% is positioned at a pub or club, directly affected by the smoking ban. We know that gambling revenues are down 15% at these venues so we should assume 15% decline in ATM transactions. Working through those numbers that equates to $2.544 mill of further lost revenue.
3) Because the smoking ban would have affected the new machines as well we can deduct a further $0.15 mill.
Adding all that up that equates to $7.51 mill of revenue forecast in August that hasn’t eventuated. Take that figure of $93 mill and you get $85.5 mill which is close to their revised forecast of $80-$85 mill.
My question is why haven’t they rolled out the 500 new machines sitting in their warehouse, and I think the answer is that they will once the industry has firmed up the technical specs and the access code for surcharging. Just a guess but I reckon that the balance of SPS migration, the roll out of the 500 new machines and the preparation of those ATM’s that need “touching” ahead of surcharging will all happen together to save costs….and I think that will be sooner rather than later……
CUS Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
