India's ATM managed services and outsourcing market outlook to 2019, page-48

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Tah Man

1,142 Posts.

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10/05/15

14:02

Post #: 15250337
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Originally posted by TonyIndo ↑

Tah Man,

The majority of shareholders currently holding, invested in this company prior to any other potential business strategy. On the 03/12/2012 TSN signed a binding letter of intent with CX Partners. It wasn't until the 13/08/13 that the transaction with CX Partners was finalised and completed. Prior to the transaction being completed (22/07/13), the company had 1072 ATMs installed and operating (refer to 2013 Annual Report). Fast forward to 2015 and there will soon be a total of 2300 ATMs once remaining 500 ATM batch come online. That will soon be over double that figure in two short years.

As ATM's and Bill Payment/Kiosk machines increase so too does the value of TSI India and share price. 25% of a business that increases gross recurring yearly revenue by approximately AUD $5.5M per year every time the company adds 500 new ATMs is nothing to sneeze about. That's not even including the Bill Payment/Kiosk Machines business which is only approximately 10% of TSI India's business at the moment. Plenty of room to really improve this side of the business.

With TSI India being a private company, we're not going to get the full picture. I repeat, this style of reporting by the company has been known for close to two years. What I have my attention on is the yearly recurring revenue figure and yearly transaction volume figure increasing and both of these metrics have been significantly increasing over the past few years. As you know, my investment strategy is long-term, by this I mean, keeping an eye on whether metrics improve every 6 to 12 months right across the board. I have been delighted with the way their current business has been improving. Their reporting style also doesn't concern me. I mean look at how many months it takes to install a good batch of ATMs. Then they have to mature. The new business strategy that the company is looking at which was highlighted in the latest Operations Update is something I look forward to hearing more about, BUT, the current existing business strategy (their strong business foundation) is what would make any NEW business pursuit even remotely possible imo.

As for TSN, I don't look at the decision with re to Salt as a negative or a complete waste of time as some have put. Would I have liked for due dilligence to have resulted more favourably? Of course. However, I trust management with their decision not to proceed with current proposal at this time as they're the ones that know best, as they're the ones that have done the due diligence.

The common denominator for me is the word 'leverage' that has been used several times in numerous announcements by the company. The foundation in place is their ATM/Bill Payment businesses - they're growing. From this strong foundation, anything is possible.

Tony

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I really want to be proven wrong here, when did the company improve there position in the bill payment/ kiosk area ? It is often spoken about but never actioned, if this is only 10% of TSI's business why is it taking years to improve there position ?

TSN Price at posting: 0.4¢ Sentiment: Hold Disclosure: Held
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