done a bit of research in to this company before it was placed on the aim and it looks quite promising, was placed on the aim yesterday 18/03 opening at 51p. i am new to this game and would appreciate others views.

cheers questy

Just hold on for a minute or two. Got a good report for you but think scott todd is the best of the three quoted companies.
GF.

The race for space in the ATM market


Published: 12:08 Fri 20 Feb 2004
By Jemma George, Smaller Companies Editor
Email to a friend


There is growing interest in the growth of ATM businesses but which of the three Plc opportunities in CardPoint, Scott Todd and soon to be listed Moneybox, charges less and offers more?The high street banks are finding it increasingly tough to make money from ATM (cash) machines.

There is growing interest in the growth of ATM businesses but which of the three Plc opportunities in CardPoint, Scott Todd and soon to be listed Moneybox, charges less and offers more?


The high street banks are finding it increasingly tough to make money from ATM (cash) machines. Gone are the days when they could get away with a surcharge on customers using the machines if their accounts are held at a competing bank, which means the pay-out points are there as a service rather than a money maker and there are never enough to avoid the queues.


In addition consumers are demanding more and more services of convenience, particularly in urban areas where time is precious and navigating the crowded streets is nothing short of frustrating.


This is the opportunity for businesses willing to install and manage ATM machines (and mobile top up machines) so that the consumer can access cash almost on demand.


There are currently more than 45,000 ATM machines in the UK which facilitate some 200 million of transactions every month, and the figures are growing.
The most obvious venues and places of need are pubs, bars, bookies, race tracks, motorway service stations, sports stadia, airports and even major department stores or shopping centres; all places the banks would rather not be and it costs money to set up the hole in the wall technology.


Cardpoint (CASH) and Scott Tod (SCD) are two publicly listed operators in the market place; Moneybox is soon to be listed and Ambient Plc (ABI) has a 60% stake.


Citywire’s Joanne Wallen has already offered investors the benefits of spotting Cardpoint at the end of November 2002 when the shares were 44.5p, now 140p. Irish entrepreneur Dermot Desmond's has a secret 1.8% stake in the company.


Cardpoint has made a couple of acquisitions to gain space quickly in the retail sector including off licences and small convenience stores where the opportunity exists for ATMs and/or mobile top up machines.

The group’s figures for the year to September were ahead of expectations and included a first pre-tax profit of 50,000 against losses previously of 757,000. Revenues are made on ATM transaction fees (a little contentious but acceptable given the convenience factor) and commissions on air-time bought for mobiles.


The business is strongly cash generative and there is plenty of growth to go for in the sector both in terms of creating new business and winning market share. At 140p the company is worth 45 million and trades on 20 times this year’s earnings and 14 times for next year, which is a little easier to stomach.


Scott Tod is a relative newcomer to the market having achieved its quote in November last year through a reverse takeover. Since then the shares have soared from 18p to 61p valuing the group at 16.5 million. There are no forecasts for the year which makes things a little tricky but first half results were more or less breakeven including a 71,000 contribution from the core business in just five weeks.


Tod had installed 1,053 ATMs by the end of December and is looking to double that figure by the end of June this year on the back of two recent deals with Mitchells & Butlers, a UK operator of managed pubs, bars and restaurants; and Leisure Link Entertainment for the supply of ATM's to another major pub chain. The company also supplies card vending machines to customers such as the NHS.


At the time of results we said it is difficult to gauge whether the earnings are seasonal and how much cost is needed to support the expansion. In addition, the company is trialling a ‘cash in transit’ business, whereby it will take in-house the delivery of the cash and restocking of various ATMs. We have mixed views on this; it could be labour intensive, costly and risky; but it is fair to wait for more news on the strategy.


We added: ‘Today’s figures and prospects for growth go some way towards justifying the 16 million price tag, but that’s high enough for now.’
For those looking for a slightly different ‘in’ to the ATM sector and a bit of a punt; Ambient Plc may be the route to go.


Ambient, the business and marketing services group owns 60% of Moneybox which it is planning to float very soon.


Moneybox has a strategic partnership with Service Bank, a subsidiary of GE Capital, for 2,000 ATMs in Germany, which added to business in the Netherlands and UK doubled the total portfolio over night. UK terminals have been installed in convenience stores, cab offices and transport hubs, with users charged 1.50 each time they withdraw some cash (similar rates to rival Link machines).

The company is planning to exploit further opportunities for expansion in Europe by raising money through a demerger and separate flotation.


Numis has been appointed to get the company to market and while there are no published figures we believe the pre tax profit forecast for Moneybox is about 7 million which would give an estimated valuation of 45-50 million pre money and nearer 75 million following a fund raising, assuming all goes well.


The group’s market capitalisation is currently 40 million which is less than the value that could (rather than should) be achieved for Moneybox. In addition Ambient has three or four other businesses, which on the lowest basis could be worth 10-15 million.


The most likely scenario is that Ambient sells some of its 60% holding on flotation but in order to create some value for its shareholders, who have endured plenty and received very little over the last couple of years, the company could structure the transaction to include shares for investors. In simple terms, Ambient shareholders should expect to end up with a stake in Moneybox without having to pay for it.


Details of the flotation should be published soon and at this stage it’s a punt for the risk tolerant investor only, but if all goes according to plan Ambient's shareholders might get lucky. They include shrewdies such Andrew Buchanan who runs the Close Beacon Investment Oeic, Katie Potts of Herald investment trust and Mark Horrocks of the Intrinsic Value investment trust, although some of these holdings were bought at much higher levels so a return is long overdue.


As the industry develops, things will get more competitive and there is every chance that the 1.50 fee per transaction comes under pressure, but for now there is sufficient lack of terminals and thus opportunity for expansion for multiple operators, which should in turn protect margins. Smaller operators may even find they can persuade the big banks to subcontract the services.


Cardpoint is the easiest to establish a value for but the shares have done well. Scott Tod is probably the least expensive but with much to prove and Moneybox is play for those willing to take on the risk of buying into Ambient first.ENDS.

GO WITH SCOTT TODD the least expensive.

cheers GF.

gf

appreciate your views, i feel this one is a bit of risk play, but has much potential, keep it on the side lines for a while i think. cheers again

questy

gf

Are you thinking of buying Ambient then?

Regards
gk

questy bit keen for a newbie ..get some proper rest b4 coming into work, melado .. p.s always give thought to what gf writes .. he's one of the few on this bb who know what they r talking about..

good luck

P.S congrats heard u got made up today !

www.evbg.com 29 March 2004
Cardpoint (CASH) Buy (unchanged)
Mkt cap: 44m Net cash: 0.3m Comment Price/Target: 150p/133p
Cardpoint (CASH) Buy (unchanged)
Mkt cap: 44m Net cash: 0.3m Comment Price/Target: 150p/133p
More for your money
Cardpoints share price has had a strong run this year as investors have
warmed to its business model and track record. Despite this, it is valued at
a discount to its newly quoted competitor.
Cardpoints closest quoted competitor Moneybox (ATM.L) has been trading
for a few days. Its share price has been in a range of 50-52p a relatively
modest premium to its flotation price of 47p. Although competitors in terms
of delivery of convenience ATM services, there are important points of
differentiation between the businesses.
Cardpoints root is strong organic growth, but since flotation it has
established itself as the leading sector consolidator. Moneybox has been
grown organically
Cardpoint's estate is almost exclusively of managed ATMs. Moneybox
has 1,100 merchant replenishment ATMs (smaller and lower volume)
Cardpoint's estate (approx 2000 ATMs) is mainly wholly owned,
depreciated over 5 years. Moneybox's estate (2,400 in the UK, 180 in
Netherlands and 180 in Germany) is funded by 7 year operating leases.
Moneybox is looking to build fastest its merchant replenishment, Dutch
and German estates. Cardpoint has just entered the German market
Moneybox's average transactions/ATM/month is 1,400 (for the
managed ATMs) and 500 (for the merchant fill ATMs). Cardpoints
average is 975. Cardpoint's average is diluted by the Securicor
acquisition
Cardpoint's average withdrawal fee is 154p. Moneybox's is nearer to
150p
Moneybox has a net cash balance of 14.5m on its balance sheet. We
estimate that Cardpoint will end the year with net debt of 3.9m.
Cardpoint continues to seek acquisition opportunities to consolidate
further the sector utilising funding from the market as previously.
Moneybox has indicated that the cash balance, war chest, is to be used
for unspecified acquisitions
Neither group is currently paying tax because of past losses
Both groups have non-ATM businesses. Cardpoint's is the mobile
phone-top up business, which we estimate to contribute 0.3m on sales
of 9m this year. Moneybox has an electronic security / vending card
business, with turnover of about 10m and 10% margin.
As to valuation. Cardpoint is trading at a discount to Moneybox. EV/EBITA
probably provides the best comparator ratio for the groups. Our preliminary
estimates for Moneybox show turnover of 39m and pre-tax profit of 3m for
this year and 66m and 7.7m, respectively, for next year (years to Dec). On a
market cap of 103m this gives an EV/rev of 1.3x and EV/EBITA of 12.4x for
12/05E. For Cardpoint, we have 32m of turnover and 2.4m of operating
profit for the year to Sept 2004 and 37m and 4.0m, respectively, for next
year. On a market cap of 44m, this gives EV/rev of 1.2x and EV/EBITA
10.7x for 9/05E. There seems to be no good reason for Cardpoint trading at a
discount to Moneybox, aside from size, Cardpoint's longer record as a public
company and wider coverage argue for a valuation premium.


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