Summary of TSI India/TSN for newbies., page-260

Hi Willsurry2015

I am sure Tony will respond in more detail later but I thought I could quickly clear up a couple of matters for you...

Margins are undoubtedly very important for any business and the need to improve them was highlighted in the Independent Research Report that was commissioned a few years ago. The margins have since been addressed through re-negotiation of contracts and cutting costs and you will note from this announcement: http://www.asx.com.au/asxpdf/20151023/pdf/4329zc2b77gtlw.pdf that TSI was profitable in H1 2015 before depreciation, (the announcement refers to 2016 but the year ended 30 September 2016 does not make sense to me when the announcement was 23/10/15).
Further, TSI has been cash flow positive since 2014 (refer the 2014 Annual Report and this post http://hotcopper.com.au/posts/16940993/single). All that was missing for the business was volume (of ATMs) ... hence the importance of the last deal.
As regards reducing costs ... .this is where the e-surveillance and power management services are so important as they have a huge impact. The conversion of all the TSI owned ATMs to utilise these services (and hence dramatically reduce costs) will further improve margins from the H1 position.
As regards the TSN management team, they are running TSI as well (eg Gary Foster ... he is contracted to TSI in India). Incidentally, the running costs of TSN in Australia were also reduced in the past 18 months.
Hope this clears things up for you a bit and helps you realise that your fears are misplaced with TSN (although I do agree that many "speccys" are too focused on revenue rather than margin .... luckily, not TSN [which won't be perceived as a speccy for much onger either IMO).
MartyW