Customers generating cash

The business model of Customers Limited is finally generating cash in the hands of shareholders, with plans by the board for the company to return eight cents a share, or $10.7 million, by way of a capital return.

While this is more cash than customers had in the bank at last balance date at June 2009, and practically all the company's net tangible assets at the same date, the financial profile of the business is speedily changing.

Customers owns the largest fleet of automatic teller machines in Australia, with more than 5000 of the devices in use. The firm's revenues now derive from the fees (of $2 each) it charges when someone uses one of its ATMs, and are paid directly by the ATM user, a system introduced across the ATM sector in March 2009.

Peter Campigli, chief financial officer, told the ASX in an Open Briefing Q&A lodged yesterday that the company's level of cash had increased significantly since the end of June.

Campigli said Customers' planned to pay a dividend in the 2010 financial year that would be partly franked. He said the payout ratio would be between 50 per cent and 60 per cent, and may be at a higher ratio in later years.

The annual report, also published yesterday, shows Customers is being sued by Sino-US Technology (Tanjin ) Company Ltd over the aborted purchase by Customers Asia of Sino in 2008. The latter claims breaches of the Trades Practices Act. The value of Sino's claim is not clear.