Cardpoint shares were mauled yesterday after the cash machine operator revealed it had plunged further into the red and warned profits next year may fall shy of expectations.
The shares tumbled 54.5 to 725p - their lowest for two years - after the Lancashire-based company admitted to problems integrating Moneybox, the competitor it swallowed for £90.5m in August. Cardpoint accused Moneybox's previous management of drawing up "optimistic" budgets as it trimmed the value of the business by £5.9m.
Some 1,000 of the 2,700 UK cash machines it scooped in the Moneybox deal will be scrapped or relocated because they are either unprofitable or could be better deployed elsewhere.
The news prompted City analysts to take the red pen to forecasts for 2006. Charles Hall, at Panmure Gordon, slashed his pre-tax profits targets from £19m to £8m. Mike Allen, the sector analyst at Numis Securities, said: "The impact on 2006 forecasts looks fairly dramatic. It will take longer than expected to gain the benefits from integration and we don't expect them to make a healthy return until 2007."
The warning came as Cardpoint unveiled pre-tax losses of £11.5m for the year to the end of September, against £3.1m last time. That came despite a 66 per cent surge in turnover to £61.1m.
Cardpoint was founded six years ago by Mark Mills, the chief executive. He sold 750,000 shares at 138p each in August, but still holds 1.8 million. His stake was worth almost £1m less last night.
His company is Britain's biggest independent ATM operator, with 6,000 cash machines in the UK, Germany and the Netherlands. It has mopped up ATMs from banks, including 816 from HBOS. Its machines are typically found in petrol stations, service stations, pubs and clubs, charging £1.50 to £1.75 per transaction.
A Cardpoint spokesman said: "Results for this year were in line with expectations, but analysts forecasts for 2006 have been reduced due to short-term integration delays. The fundamentals of the business are still extremely strong and the company will continue with its profitable growth."Reuse content