Shares in independent UK ATM operator Cardpoint have slipped after the company warned that full year profits would be lower than expected due to delays in the conversion of its acquired HBOS cash machines to a fee-charging model.
Cardpoint stock fell 7.50% to 116.50 pence after the company said the delays would impact on expectations for the current year.
The vendor bought 816 ATMs from HBOS in May last year in a deal worth £76.5 million, although the purchase price is expected to come in lower than forecast - at or below £50m. The company now expects to convert 275 machines to charging by the year-end.
In a statement, Mark Mills, CEO, Cardpoint, says: "Whilst the delay in the migration to charging will have a short term impact on our expectations for the current year, we will start the next financial year from a stronger base as more machines will have been converted to charging than previously anticipated."
For the six months ending 31st March 2005 the firm also posted widening pre-tax losses of £5.09m, compared to just £826,000 a year ago, although turnover was up 92% in the first half to £26.6m, boosted by the acquision of the HBOS ATMs. Pre tax profit was £443,000, up 43% on last year's £304,000.
Despite the conversion delays Cardpoint says profit generated from converted HBOS machines has exceeded expectations, due to higher retention and charging rates. Overall, company turnover was up 92% in the first half to £26.6m, boosted by the acquision of the HBOS ATMs. First half pre tax profit was £400,000, up 43% on last year.
Cardpoint, which currently charges customers around £1.50 for withdrawing cash from its machines, also says it doesn't expect the Treasury Select Committee's recommendations that fee-charging ATMS should display clearer warning labels to have a material adverse affect.