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The exponential compound effect...

  1. TonyIndo

    8,188 Posts.
    95
    ATM business model:

    * Currently 1575 ATMs (with another 725 ATMs soon to be online) are all bringing in recurring revenue on a monthly basis.

    * Every new ATM added to the existing fleet, will only increase that recurring revenue.

    * Based on half yearly figures highlighted in the Operations Update dated 02/12/2014, if we average it out, we can now see that each ATM is bringing in approximately AUD $4000 to TSI India. Note, that is based on 40 million transactions per half year.

    AUD $6,000,000 / 1500 ATMs = AUD $4000 on average per 40 million transactions for half year. Note, I haven't added the additional 75 ATMs to this exercise as those ATMs are not fully mature yet.

    http://www.asx.com.au/asxpdf/20141202/pdf/42v69rq89l6s50.pdf

    * How would these figures look like should those 'monthly average transactions' highlighted on page 12 of the Half Yearly Report (refer to link below) increase by just 10% every few years, without any increase to the ATM fleet of 2300 ATMs (soon to be online)? Pretty high. Do the maths. Note, average monthly transactions highlighted 4600. As 'monthly average transactions' increase, recurring revenue equally increases. This is without any new ATM contracts or new clients. Just an improvement to this one metric alone can add millions in additional revenue to this one business! How can the company increase this one metric?

    Page 1 of the announcement dated the 28/08/2013 (refer to link below) may be instructive.

    This does give an indication of the enourmous potential for exponential compound growth just within the ATM business alone. I just wanted to illustrate how just one small improvement to one metric of the existing business model can bring about enourmous growth.

    What other areas or metrics within the existing ATM business model can bring about opportunities for additional recurring revenue? Now there's something to think about.

    Major accumulation has taken place at these levels. Fingers crossed for a move up from here.

    References:

    http://www.asx.com.au/asxpdf/20130828/pdf/42hzjsgqqjthtx.pdf

    http://www.asx.com.au/asxpdf/20141126/pdf/42v19837zvngrm.pdf

    Tony

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