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Bank Machine Ltd., a United Kingdom-based independent ATM operator, said last week it would establish its own "cash-in-transit" operation that would enable the company to ship its own cash to its ATMs.
Cardtronics Inc. of Houston owns Bank Machine, and Cardtronics complained that unreliable armored-car delivery service in the United Kingdom contributed to Cardtronics' third-quarter loss of $4.2 million on revenue of $127.3 million.
"We continue to encounter issues with our largest third-party [armored car] provider, which has resulted in a high number of cash-outs, thus resulting in a loss of transaction," Michael Clinard, Cardtronics president of global services, told analysts during a Nov. 6 earnings conference call.
Analyst Franco Turrinelli says he is taking a wait-and-see approach concerning Bank Machine's investment.
"You asked me, will it solve of their problems? We certainly hope so, but we will have to wait and see," says Turrinelli, an analyst with Chicago-based William Blair & Co. The company plans a rollout this month.
Bank Machine spent $4.4 million on "a state-of-the-art cash center and secure vehicles," the company says.
The firm hopes the new operation will cover several thousand ATM sites in the UK within three years. Initially, however, the service will be much more limited.
"It will be a highly selective approach of supplying high-volume ATMs in the London area," says Turrinelli, explaining that Cardtronics in-house armored car service initially will service 300 ATMs and that it will take a couple of years for the internal armored car service to service Bank Machine's entire network of 2,500 ATMs.
Bank Machine will continue to work with other armored car operators, the spokesperson says.
The ATM firm may offer the service to third parties in the future, the spokesperson adds.
In a statement, Hatfield Hertfordshire, England-based Bank Machine says establishing the cash-transport operation will provide "stability" in an industry that has seen significant mergers over the past year. ATM
