ATM cash-cow misfires
Automatic teller machine operator GRG International sold A$2.4 million worth of ATMs over the June 2012 quarter, but failed to generate any operating cash flows from a fast-growing base of installed ATMs.The quarterly cash-flow summary filed by GRG with the Australian Securities Exchange yesterday shows that the firm generated operating cash outflows of $1.95 million over the quarter and $3.4 million in cash outflows over the year to June.Operating expenses - including the "guaranteed" return of 20 per cent promoted through a number of resellers - exceeded receipts, the majority of these being the fees of $2.50 (or more) paid by anyone using a GRG-managed ATM to withdraw cash or check a balance.GRG has recently taken steps to stem the cash outflow on other fronts. Last month it negotiated a waiver of the remaining earn-out terms with the vendors of eFunds (which sold GRG a fleet of ATMs in 2010).While GRG copes with cash outflow, another ATM operator, EzeATM, is producing cash from its 1800-strong fleet of ATMs. (The firm bought most of these from iCash Payments earlier this year).EzeATM said its operating cash flows were $586,000 for the quarter and $1.7 million for the year.As for iCash Payments - which is now a manufacturer of ATMs offshore - the promised return of capital to shareholders arising from the sale of its ATM fleet in Australia is now unlikely.Five weeks ago iCash said it planned to return $3.7 million in capital to shareholders (this represents about one quarter of the amount paid by EzeATM).Most of the directors that proposed this return of capital resigned from the board the day the company announced the return of capital to the ASX.The new board said yesterday that it was "reassessing" this proposal and that the company will be subject to the capital requirements needed to fund the purchase of the half share in Korean ATM manufacturer NeoICP that it does not already own.