New CEO Seeks Customer Loyalty Through Change In Global Cash Access Sales Strategy
New CEO of Global Cash Access, Ram Chary, who took over the company in January, is shaking things up, shifting the company’s focus to comprehensive cash management solutions for gambling establishments, as opposed to the sale of individual products.
Chary replaced David Lopez, who resigned Jan. 27 as president and chief executive officer and as a member of the company’s board of directors “to continue a new career opportunity. “The loss of some gaming companies, including Mohegan Sun last year, may have contributed to the change in leadership. Chary was most recently Executive Vice President of Global Business Services at Fidelity National Information Services Inc.
During a conference call with analysts to discuss the company’s first-quarter earnings, Chary outlined his strategy for the company, which is to move away from discussions about individual products.
“As innovations such as QuikTicket, TableXchange and CashClub move from beta to market, we will integrate them into broader multi-year solution offerings that are consistent with our position as a long-term strategic partner for our customers,” a- he declared. “We are in the process of combining these elements into a more meaningful solution sale that will allow our capabilities to be fully showcased in our customers’ footprint. “
Part of the start of this change is the creation of an integrated kiosk, which serves as a standalone product supporting multiple services, said Chary. “This will move us away from selling short-term hardware to a more sustainable and longer-term revenue stream against this solution,” he said.
As such, the company should not be as sensitive to competition as it was in providing off-the-shelf solutions. And with the kiosk delivering differentiated value to customers, Global Cash Access can command a premium in the marketplace, Chary said.
“As we move on to selling solutions, we are in a unique position compared to any potential competitor to provide an integrated solution that no one else can provide,” he said. “And I think that will translate into inherent value for our customers, and that value for our customers will translate into better results for us.”
In the first quarter, Global Cash Access generated revenue of $ 150.6 million, up 2.6% from $ 146.8 million for the same period ended March 31 of last year . Net income rose 23%, to $ 7.5 million from $ 6.1 million, according to the 8K regulator deposit.
During the call with analysts, Randy Taylor, CFO of Global Cash Access, noted a decline in ATM revenues caused by lower same-store transaction volumes, combined with loss of business, including including Mohegan Sun at the end of the first quarter of 2013. Check services also declined due to lower same-store transaction volume. Conversely, other income increased, mainly due to higher kiosk sales, he said.
“Same-store cash, our best indicator of industry trends, increased by approximately 1% for the first quarter of 2014 compared to the same period a year earlier, mainly due to transactions from credit and debit bot in the cash access system. segment, Taylor said. “Combined credit and debit increased 7% in the first quarter of 2014.”
Allocated, cash advance revenue increased 5.6% to $ 62 million from $ 58.7 million. ATM revenues fell 2.7% from $ 75.3 million to $ 73.3 million. Check service revenues fell 10.2% to $ 5.3 million from $ 5.9 million, and other income increased 41.4% to $ 9.9 million from $ 7 millions of dollars.
In terms of dollar amounts processed during the quarter, cash advances totaled $ 1.3 billion, up 8.3% from $ 1.2 billion; ATM volume fell 2.9% from $ 3.4 billion to $ 3.3 billion, and check guarantee volume remained stable at $ 300 million.
In terms of transactions completed, Global Cash Access processed 2.3 million cash advances, unchanged from the previous year, while ATM transactions fell 5.6% from 17.8 million to 16.8 million. The volume of guarantee checks fell by 10%, from 1 million to 900,000.