Cash machine expansion marches on

PRE-TAX profits at Moneybox, which runs a network of fee-charging cash machines, are set to hit ?3m for 2004. Shares in the Alternative Investment Market-listed company fell 1p to 36p in early trading.

In a trading statement, the company said profits would be in line with estimates made in its results from September, when the board said earnings would be £500,000 below the City's estimates of £3.4m

The number of machines run by Moneybox has increased 15% in the UK from 2,471 to 2,830 in 2004. In Germany, where the company sees 'particularly exciting prospects for expansion', the number of cash machines rose from 178 to more than 400.

Since 1999, banks and building societies have not charged customers for withdrawing money. However, smaller firms have spotted a niche by providing additional cash machines in 'convenient' locations. They typically charge ?1.50. Some 70% - around 1,500 - of all machines in Post Offices, most of which are operated by Alliance & Leicester, now impose a fee. The annual bill for taking cash out of such machines is currently running at £60m, but this is set to spiral.

The total number of machines which charge has rocketed by 40% in the last six months, to around 20,000 of the country's 50,000 ATMs.

The Treasury Select Committee is due to begin an investigation into ATM charges next week. 'We have made a detailed submission to the committee and are confident that we can demonstrate that independent ATM deployers provide choice and a service which is valued by consumers,' Moneybox said today.

'We have also pointed out that the transparency of our charges is in marked contrast to other card-based transactions.' It has also criticised the 'monopoly' position of Link, which operates the country's ATM network.