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Technology
Date:
Company Information
ASX Code
Last Price ($)
12 month share low
12 month share high
Shares on Issue (m)
Market Capitalisation ($m)
Daily Volume
4 April 2016
STL
$0.03
$0.02
$0.04
415
13
643,031
Factset, DJC Research
Business Description
StarGroup Ltd is a technology company, which is
focused on delivering vertical integrated cash
handling and financial payment solution. The
company engaged in the designing, manufacturing,
sale, installation and maintenance of ATMs,
switching and software solutions for banks, financial
institutions and back office solutions for retail
sectors.
Factset, DJC Research
Directors
Tod Zani
Shaun Sutton
Tae Jinkim
Jongho (Jay) Kim
David Dickinson
CEO/Exec. Chair
Exec. Director
Non-Exec Director
Non-Exec Director
Non-Exec Director
Star Group (STL)
ATM and payments company
STL is an Australian based company that deploys ATMs and EFPOS machines. Stargroup
Limited merged with iCash on 7 August 2015 and as part of the acquisition became the
exclusive distributor of the Cashpod ATM range including the recycler ATM, back office
and payment technologies in Australia for the next five years.
Key Points
STL is cash flow positive: STL is a cash flow positive business recording $1.5m revenue in
FY15. The company has estimated that its revenue for FY16 will be $5m. It also expects to
potentially grow revenue through the launch of its EFTPOS technologies. Revenue has been
steadily growing quarter on quarter and in the December quarter STL recorded just under $800k,
with forecasts of circa $1.2m in the current quarter.
STL has circa 240 ATMs deployed: STL currently has circa 240 ATMs in the field and is rolling
out more. In February STL’s ATMs processed over 5,000 transaction a day as a whole. This
number is growing steadily. The ATMs are deployed in pubs, clubs and small retailers who want
customers to be able to access cash on their premises. STL has a revenue sharing agreement
with the business owner and believes it offers better service than its competitors thanks to its
size and scale. STL also plans to offer deposit taking non-branded ATMs, which would be a first
as all non-bank ATM machines located in business are cash out only. 55% of ATMs in Australia
are owned by independent service operators.
STL owns a portion of the upstream manufacturing: STL owns 11.28% of NeolCP, who
manufactures all of STL’s ATMs in Korea. NeolCP manufacture ATMs, back office and casino
settlement solutions.
STL is expanding into the EFTPOS market: STL is also expanding into the EFTPOS market
by supplying non-bank branded EFTPOS machines to businesses. This will give the company
another potential revenue stream. STL’s terminals are PayWave ready, which gives the retailer
an incentive to switch. EFTPOS terminals grew at a rate of 13.3% in 2015. STL is looking to add
30 EFTPOS terminal per month by June, followed by 100 terminals a month from July. To this
end STL has increased the number of sales agents it employes and is aiming for over 100 by the
end of June this year. The StarPOS portion of the business is generating revenue.
Analyst Details
Michael Eidne
+618 9263 5213
[email protected]
Figure 27: Forecast and actual revenue.
4 April 2016
Source: Star Group
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RESEARCH
Technology
Key Points
STL is cash flow positive: STL is a cash flow positive business and recorded $1.5m in FY15 and
is expecting. STL has estimated that its revenue for FY16 will be $5m. It also expects to potentially
grow revenue through the launch of its EFTPOS technologies. Revenue has been steadily growing
quarter on quarter and in the December quarter STL recorded just under $800k and has forecast
circa $1.2m in the current quarter.
STL has circa 240 ATMs deployed: STL currently has circa 240 ATMs in the field and are rolling
out more. In February STL’s ATM’s processed over 5,000 transaction a day as a whole. This
number is growing steadily, These ATMs are deployed in pubs, clubs and small retailers who want
customers to be able to access cash on their premises. STL has a revenue sharing agreement
with the business owner and believes it offers better service than its competitors thanks to its size
and scale. STL also plan to offer deposit taking non-branded ATMs which would be a first as all
non-bank ATM machines located in business are cash out only. 55% of ATMs in Australia are
owned by independent service operators.
Figure 28: Star ATM process.
Source: Star Group
STL own a portion of the upstream manufacturing: STL owns 11.28% of NeolCP who
manufacture all of STL’s ATMs in Korea. NeolCP manufacture ATMs, back office and casino
settlement solutions.
STL is expanding into the EFTPOS market: STL is also expanding into the EFTPOS market
by supplying non-bank branded EFTPOS machines to businesses. This will give STL another
potential revenue stream. STL’s terminals are PayWave ready, which gives the retailer an
incentive to switch. EFTPOS terminals grew at a rate of 13.3% in 2015. STL is looking to add 30
EFTPOS terminal per month by June, followed by 100 terminals a month from July. To this end
STL has increased the number of sales agents it employs and is aiming for over 100 by the end
of June this year. The StarPOS portion of the business is generating revenue.
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4 April 2016
RESEARCH
Technology
Figure 29: Star EFTPOS process.
Source: Star Group
Corporate Summary
StarGroup Ltd is a technology company, which is focused on delivering vertical integrated cash
handling and financial payment solution. The company engaged in the designing, manufacturing,
sale, installation and maintenance of ATMs, switching and software solutions for banks, financial
institutions and back office solutions for retail sectors.
Figure 30: Star corporate structure.
Source: Star Group
Stargroup Limited merged with iCash on 7 August 2015 and as part of the acquisition became
the exclusive distributor of the Cashpod ATM range including the recycler ATM, back office and
payment technologies in Australia for the next five years. Stargroup Limited, via its wholly owned
subsidiary StarPOS, is also a EFTPOS and payWave technologies provider via its wholesale
Visa and MasterCard agreement.
4 April 2016
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Technology
Directors and Management
Tod Zani - CEO and Executive Chairman
Mr Zani was the founder of Ezeatm in early 2000 and subsequently vended that business into
Ezeatm Limited in 2011, which became the largest ASX listed ATM deployer with a market
capitalization of $34.45 million. Mr Zani is a Chartered Accountant with over 25 years’ experience
and is a director of Ezetax Pty Ltd, a chartered accounting firm he founded in 1999. Mr Zani was
the CEO and CFO of Ezeatm from 2006 to 2013.
Shaun Sutton - Executive Director
Mr Sutton has extensive experience in running and operating ATM networks in the Australian ATM
industry and was for the former National Logistics Manager of Ezeatm Limited and in that capacity
oversaw the significant growth and national expansion of the Ezeatm business.
Tae Jinkim - Non- Executive Director
Mr Kim is a trained attorney-at-law, holding degrees at Masters from both the Korean University
and the University of California. He is a partner of K & P Law Firm, Seoul, Korea and has served
as external legal counsel to NeoICP for a number of years.
Jongho (Jay) Kim - Non-Executive Director
Mr Kim is CEO and President of Design Studio Inc. and an Adjunct Professor at Hanyang
University in Korea. He has been educated in the US in Ubran Design and held a prior nonexecutive role with LG. Mr Kim is also a respected executive with extensive networks in the casino
gaming industry across Macau, Hong Kong and Japan. Mr Kim brings valued business and
advisory experience to assist in securing casinos cash handling business in Asia.
David Dickinson - Non-Executive Director
Mr Dickinson is an experienced ATM entrepreneur who has built significant ATM networks in both
Australia and New Zealand. Mr Dickinson also has an 'internet of things' business in New Zealand
called Vcomms which provides wireless modems to ATM Deployers in Australia, New Zealand
and in Asia.
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4 April 2016