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ATM profits lacking at GRG

02 March 2012 5:34PM
The vendors of the ATM fleet operated by eFunds and sold to GRG International will not earn anywhere near as much in deferred consideration as expected from GRG, the December 2011 half-year accounts of GRG show.While eFunds earned $1.1 million in profit over the half (and at a higher monthly run-rate than in the prior year), GRG said it now expects to pay only $2.4 million in cash and shares to the vendors when the second instalment falls due next month. Based on the original agreement, outlined in late 2010, the vendors may have hoped to earn around $6 million in the second instalment (roughly in line with the down payment on the business).The reduced liability for eFunds may reflect the difficult trading conditions for owners of ATM fleets in an increasingly crowded market.The remainder of GRG's Australian ATM business reported a loss of $420,000 for the half. Its offshore business, which serves scattered markets in the US, Canada and elsewhere, incurred a loss of $650,000. It is likely GRG's management will have to shift its focus to India.Last week, the company told the ASX it had secured "its biggest contract to date", in the Indian state of Madhya Pradesh. GRG said the contract involved "the operation of a welfare distribution network" and included issuing four million cards, installing and operating 5000 ATMs, and running a transaction switch.

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