Cardpoint

HOLD

31/03/2004

Electronic payment transactions provider Cardpoint, a Growth Company Investor recommendation at 79p last October, pleased investors with a bullish pre-close update ahead of interims to March. Mark Mills, chief executive, reported a continuance of the encouraging trading conditions enjoyed by the firm over the first half. Throughout, the board has focused on the integration of key acquisitions Securicor Cash Machine and PT Distribution, made in May and July of 2003, a process that is largely complete. These two major deals, together with organic growth and two big contract renewals, swelled the Cardpoint estate from 1,875 ATMs at the September year-end to 2,050, and from 3,012 to 3,290 mobile phone top-up terminals. Intriguingly, Cardpoint recently announced its first operational cash machine over in Germany, a bigger market than the UK. Indeed, Germany has the largest European installed ATM base untapped by independent deployers like Cardpoint. Posted back in November, Cardpoint's annual results were excellent, showing a near-fourfold rise in sales to �12.2m. Pre-tax profits before goodwill came in at �50,000, against a �757,000 loss. Broker Evolution Beeson Gregory expects a �2.4m pre-tax profit and earnings of 6.7p this year, all delivered from hoped-for sales of �31.7m. The shares have performed well since our recommendation, but we still feel there's plenty more growth here. Hold.