Cardpoint meets targets, cuts HBOS purchase price estimates

Cardpoint meets targets, cuts HBOS purchase price estimates

Shares in UK-based independent ATM operator Cardpoint have moved up 6.5% on the back of an upbeat first quarter trading update and news of a £26 million saving on the estimated purchase price of the HBOS cash machine estate.

The company, which owns and operates 2800 cash machines dispensing more than £300m each month and approximately 4000 mobile phone top-up terminals, describes first quarter trading conditions as "encouraging".

Mark Mills Cardpoint CEO says the company's focus for the coming year will centre around the integration of the HBOS estate and expansion in Germany.

The firm has set a target for installation of 250 machines in Germany by year end. Mills says the 51 machines already installed in the German market are running at a profit "strengthening our belief that Germany continues to offer exciting opportunities for expansion of our business outside of the UK".

In the UK, Cardpoint is aiming to complete the conversion of HBOS' 816 off-site cash machines by 31 March. The company anticipate that the final number of charging machines will be in excess of 250 with the achievement of a higher than originally anticipated retention rate and an average charge of more than £1.60.

The purchase consideration for the HBOS acquisition is expected to come in significantly lower than forecast - at or below £50.6m - according to an agreed contractual formula based around host site transfer and the proportion of contracts which allow charging for cash withdrawals.

Cardpoint had agreed £25 million in debt financing with the Bank of Scotland to finance the contingent consideration and is therefore expecting a significant saving on interest payments over the coming year.

The company's share price continued to edge up in early morning trade, gaining 8.5 pence from yesterday's close to stand at 138.5 pence.

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