Still trying to estimate the potential impact of WLA for them.
Main elements I found so far : - margin increase ("as keep 100 % of the interchange fee"), - double the life of ATM (capped now to 10 years with brown label), - improve cash flow, as paid immediately, instead of waiting 60 to 120 days with brown label.
So, obviously, while label has a major potential impact on its earnings and returns, while diversifying its risk (much less dependant on a couple of contracts).
What surprises me : this is a bit different from the figures they have given so far for the white label impact. They indicated that the 3,912 SBI ATM to be retired will be redeployed (if they get the WLA) and generate, annually, 25 m$ of revenues and 7 m$ of EBITDA. This corresponds to a lower revenue/ATM (vs CBI and SBI contract) and a lower margin (28 % vs 40 %+). Perhaps the lower revenue/ATM is explained by the fact that the best ATM locations are already taken and they need to go to locations where there is a lower number of transactions per day.
FND Price at posting:
$3.88 Sentiment: Buy Disclosure: Held
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