- Findi (ASX:FND) shares jump 10 per cent today as it enhanced the existing contract with the SBI
- The company recently scored a 10-year contract with SBI to deliver to the latter 4219 ATMs
- Findi expects earnings of $250-$280 million from revenue of between $550 million-$620 million
- The contract will be funded by Findi’s free cash flow, and, new bank facilities
- Shares last traded at 77 cents
Findi (ASX:FND) shares were up 10 per cent just before midday AEDT today as the company further enhanced its recent contract with the State Bank of India (SBI).
At the end of October, Findi scored a 10-year contract with SBI to deliver to the latter 4219 automatic teller machines (ATMs).
From that new and recent agreement, Findi expects earnings of $250-$280 million from revenue of between $550 million-$620 million.
The contract will be funded by Findi’s free cash flow, and, new bank facilities.
Relationship sweetener
However, today, the company added something extra to the mix. Important to note is that Findi and the SBI had a pre-existing relationship.
From now until September 2024 at the latest, Findi will provide white-label ATMs to SBI, as part of an existing contract.
That contract between Findi and SBI was set to expire in December of this year and sits outside the scope of the 10 year deal struck in late October.
Strategic move
What SBI has in essence agreed to is to extend that existing contract into September 2024 so as to cover the time it takes to replace the ATMs under the new 10-year-contract.
For Findi, and its shareholders, that means continued exposure to revenue from a major bank in the world’s most populous country.
“This contract extension is a strategic milestone for Findi as it seamlessly bridges the time gap between the current and the new SBI contract, with the added benefit of ongoing free cash generation,” the company wrote today.
What are white-label ATMs?
White label ATMs often refer to those inside grocery stores and convenience 24/7 locations.
This class of ATM also typically charge higher fees than branded machines.
If you have ever had to withdraw cash quickly inside a service station or local supermarket and found yourself stung by a $3.00 fee just to withdraw money – that’s a white label ATM.
More about SBI
The SBI is headquartered in Mumbai and sits and was listed in 2020 as the 48th largest bank in the world.
The bank is also listed on India’s National Stock Exchange (NSE) listed in Mumbai.
Findi shareholders are clearly liking the news.
Findi shareholders are beyond pleased
FND shares are up an impressive 49.5 per cent over the last week.
Year to date performance clocks in at 37.5 per cent.
One-year returns for shareholders reflect 42.59 per cent.
Over the last month, the stock has gained 75 per cent.
For a company with only $28.3 million in market cap – and relatively low turnover – the proof that a big-name relationship can turn a ship around is clear.
Assuming all goes well, of course.
FND shares last traded at 77 cents.