As digital retail sales have increased during the coronavirus pandemic as homebound consumers spend more time making money online, cash is still king, according to the CEO of Brinks.
Doug Pertz, CEO of the cash management firm, known for its armored cash-carrying trucks, told CNBC’s Jim Cramer on Tuesday that the data shows the flow of money in the U.S. economy is even higher. than pre-pandemic levels.
“Potential investors confuse the fact that liquidity is dwindling,” but “the strength of liquidity is just as strong as before, and the amount of liquidity [used] in the economy is just as strong, “he said in a”Crazy Money” interview.
Despite the growing popularity of digital transactions in an increasingly contactless world, physical money remains a mainstay of in-person retail purchases. The results have not materially changed for a year, Pertz explained.
Citing information from the Federal Reserve, cash flow is 16% higher year-over-year, up from the single-digit compound annual growth rate recorded over the past three decades, a- he noted.
In addition, 35% of physical purchases in the United States continue to be made in cash, according to the company.
As for Brinks, he said he processed 6% more cash through his system than in previous years.
“This clearly suggests that the money is not going to go away,” Pertz said.
Brinks released its fourth quarter and full year 2020 results ahead of the trading day on Tuesday, a session in which its shares traded more than 6% at $ 80.86. The company topped analysts’ estimates for the quarter, achieving $ 1.02 billion in revenue and $ 1.64 in earnings per share. Revenue increased 9% from the quarter last year. It was Brinks’ best quarter of growth since 2018.
Full-year revenue of $ 3.69 billion, barely above what the company achieved in 2019, was marred by lower sales in the first half of the year.
Brinks sees a future in the digital cash management space, however. About a third of physical retail transactions continue to be done in cash, and Brinks is looking to provide an integrated solution, Pertz said.
The solution can help retailers convert physical cash to digital form in-store, much like debit and credit card providers for payments, he noted.
“We think we can deliver this digital cash management solution, and that’s what we tackle next,” he said. “It’s on an integrated basis where we’re going. We believe this solution can be really meaningful and there is a huge untapped and unventilated market in this space for cash management. ”