Domestic ATM business impaired at iCash Payments

The competitive environment is proving tough for at least one independent operator of automatic teller machines, with iCash Payments obliged to wipe out the equivalent of a year's profit through a write-down on its fleet of 950 machines.

The firm said it recognised an impairment of $5.1 million on its domestic ATM business following a review over recent weeks.

Revenue from iCash's Australian operations fell nine per cent over the year, to $12.9 million, thanks to lower transaction volumes. Increased fees on ATM transactions and a larger fleet helped offset the decline in revenue.

The Australian arm of iCash Payments incurred a pre-tax loss of $1.5 million thanks to the write-down in carrying value.

Management said in commentary published with the financial statements that the "current business model… is particularly mature and challenging".

One problem is that the share of ATM revenue shared with merchants is rising, a point noted by rival operator Customers Limited in its financial report last week.

Another dent in iCash's bottom line was a $1.4 million GST bill the firm did not budget for. Six months ago the company identified this as a contingent liability only, and for only one third of the amount.

The focus of iCash is increasingly on its ATM business in South Korea, with a capital-raising likely in the near future to fund the purchase of a further 40 per cent stake in its associate, NeoICP.