People will still pay to use our ATMs, says Stargroup after banks axe fees
ATM owner StarGroup has reassured shareholders that a move by big banks to cut their ATM fees would not affect its revenue.
Last month, when the big banks announced they would axe fees on their own ATMs, worried investors sent StarGroup’s (ASX:STL) shares down by a third.
StarGroup’s shares are yet to recover, although they did rebound in morning trade today by 5 per cent to 2.1c.
Chief executive Todd Zani told investors he was “not really” surprised by the level of selling.
“What this has probably emphasised is that there is still a significant number of investors on our register that don’t understand the fundamentals of our business,” he said.
“That is something that we will have to continue to educate the market on and in particular, the niche in the market that we operate within.”
Stargroup had “fielded numerous calls from concerned shareholders, investors and others about the implications for the company”, despite earlier reassurances, Mr Zani said.
StarGroup — which charges fees around $2.50 for use of its ATMs — placed its machines as far as possible from bank ATMs in areas such as pubs, clubs and service stations.
“In the first week post the announcements made by the major banks our transactions at ATMs were up 2.2 per cent and the amount of cash withdrawn was up 2.4 per cent,” Mr Zani said.
“Bank customers have always been able to obtain cash for free from their own ATMs, and we have always suggested that as a result of our machines being located in convenient locations like pubs, clubs, nightclubs, 7-eleven stores, service stations, remote sites and other similar locations — usually where banks are not interested in locating their devices — we are insulated in the event of bank policy changes.”