Expanding its presence in Canada, on May 12, MoneyGram International Inc. (MGI) announced that it has doubled its network to 6000 locations through Canada Post that offers the largest retail network in Canada. Through this alliance expansion, MoneyGram has grown its network to more than 198,000 agent locations in 190 countries and territories.
Canada Post is an active MoneyGram agent since 2002. The expansion took effect following a multi-year agreement between Canada Post and MoneyGram in 2008, whereby the former avowed to aid MoneyGram’s network expansion objective over a period of time. Consequently, MoneyGram’s money transfer service is now implicitly available in all locations of Canada.
Money transfer business remains the driving force for MoneyGram. The company has been expanding its money transfer business across the globe through various recognized financial institutions. The alliance with Canada Post will further support its regional strategy of constant improvement in the money transfer services.
Besides, MoneyGram continues to establish new growth avenues by exploring new locations and incorporating latest and flexible technology such as transfers through mobile phones, prepaid cards or ATMs, in order to speed up its money transfer services and enhance remittance volumes.
Earnings Recap
MoneyGram’s reported first quarter loss of 26 cents was a nickel below the Zacks Consensus Estimate. Higher money transfer transaction volumes were offset by increased operating expenses, declining bill payment transaction volumes and continued weakness in Mexico and Spain. The growing presence in high potential markets continues to strengthen MoneyGram’s revenue stream.
Although the current economic turmoil has weakened both revenue growth and operating leverage of MoneyGram, we believe that the company has the potential to overcome the impact of the volatile U.S. dollar against other currencies and additional losses in its investment portfolio, once the global economy rebounds to its historical highs.
Read the full analyst report on “MGI”
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