Two classes of investors needed for ATM hopeful
my ATM, the Adelaide-based marketer of ATMs as a retail investment, and their deployer Aussie ATM, have some large plans for 2010.
my ATM/Aussie ATM will list on the Australian stock market within two months, just 20 months after the business was founded, managing director Tim Scala said.
In the early days the my ATM pitch was to household investors to, in effect, get into the banking business by owning their own automatic teller machine.
Marketing material for the investment circulated last year asserted investors could expect a "guaranteed" return of 20 per cent.
Tickling the interest of a mass investor market remains vital to the business plan. Having started out the year as a co-sponsor of the Port Adelaide Football Club in the AFL, my ATM has upgraded the sponsorship, steering both the my ATM and the Aussie ATM logos on the front and back of the club's jersey.
Port Adelaide will share some revenues from my ATM fees when club members introduce new sites to the firm.
The firm is also seeking a toehold in the crowded ATM service spaces of shopping centre owners, and is willing to pay away around a quarter of its revenue to do so.
Aussie ATM recently signed a deal with Westfield to locate between 100 and 190 ATMs in 39 shopping centres around Australia.
It is believed that Aussie is paying Westfield 50 cents per transaction under the deal. A further 20 cents goes to the investor/owner under the my ATM model.
The typical fee that Aussie ATM will charge per transaction is $2, in line with the industry norm (though fees range from $1.50 upwards).
The deal with Westfield follows on a similar trial arrangement that should become permanent with Myer. my ATM also supplies ATMs for General Property Trust.
Scala admits that the number and quality of locations is the key to success in this industry. "Absolutely; and that is why Aussie is now improving the deal to investors by offering to move the machine if required.
"For investors, getting the right deployer is critical. You possibly don't want a mum and dad with ten machines."
Scala says Aussie has improved the deal because there was a dip in demand from investors when the federal government's tax rebate for business investment expired in December 2009.
"There was a dip in demand coming through, but there was a lot of interest in the months leading up. We are still settling some of that work now."
Scala said the Australian market needed another 10,000 ATMs in the next four years, or more than one third than at present.
"There has been some market research lately that suggests if Australia is to get to the stage of the American and Canadian markets, then we will need 37 to 38 thousand ATMs by 2014," said Scala.
"And that doesn't include the machines that are being replaced, many because they don't meet the standards required since the industry changed last year."
Despite his role as the front man for a business which advertises 20 per cent guaranteed returns and help with funding the up-front costs of the investment, Scala says he is not spruiking an investment scheme.
"We are a retailer and deployer of ATM machines. The deployer is making the return guarantee because it saves them from having to find the capital themselves.
"We are raising some capital and heading public in the next two months to ten weeks or so. We want to mop up some small deployers and they are interested in liquid shares."