share price rising, page-3

I found this as well.... its last months but read the last line....


ATM fees: there're pots of gold lurking in that hole in the wall

David Potts | August 8 2007
The Sydney Morning Herald & The Age (subscribe)

Since China is Australia's biggest ATM, it's only natural we should return the favour. Just think: if every Chinese person withdrew one yuan every day at an ATM, then . . .

No wonder that's what Customers, which runs Australia's second-largest, er, bank of ATMs, is doing. China has only 65 ATMs per million of population compared with the global average of 1000.

Customers is aiming to have 30,000 to 40,000 ATMs in Asia over the next three to five years. But it's this kind of expansion, not to mention the earlier purchase of 700 ATMs from St George, that has played havoc with Customers's bottom line. Last year's modest $1million net profit was its first.

Thanks to the Reserve Bank's proposed reforms, independent ATM owners will be able to set their own charges, though they will still have to pay a fee to the banks.

Customers already has approval to introduce surcharges - charging a higher fee at nights in places such as pubs and clubs where, it must hope, inebriated clients won't notice they're being ripped off.

Since it already gets $1.10 out of the $1.50 "other bank" ATM charge every time you take money out, from which it makes a profit of about 60 cents a pop, imagine how much it could earn with a special fee of, say, an extra $1 on top of that on its 5000 machines.

To give you a hint, each one has an average 1300 withdrawals a month. All right, it adds up to $78 million a year.

At the same time it expects to halve processing costs, which soak up about 15cents per transaction, through a new system developed with Bendigo Bank and MasterCard (giving it a springboard into Asia) expected to be implemented over two years. Since most of its costs are fixed, any economies of scale go straight to the bottom line.

Its new processing technology can also be licensed to others such as credit unions, building societies and regional banks.

The biggest risk is the Reserve Bank's review of ATM regulations, which could well backfire on suppliers, consumers or both. After all, its credit card reforms have only led to higher fees and reduced rewards with no noticeable drop in fees.

Advantages

* Asian expansion

* Good management

* Only non-bank ATM listed company

* Planned Reserve Bank rule changes

* Low costs

Disadvantages

* Speculative

* Reserve rule changes could backfire

* Relatively high debt

* Mature market in Australia

* Paid top price for acquisitions

Verdict

The main broker following Customers values its shares at 28 cents each over the next 12 months, with a potential to 78 cents if it gets away with a proposed surcharge