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Reassuring Q1 update

EML Payments 18 November 2021 Update
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EML Payments

Reassuring Q1 update

Q122 trading update

Software & comp services

18 November 2021

Price

A$2.91

Market cap

A$1,087m

Net cash (A$m) at end FY21

103.0

Shares in issue

373.4m

Free float

93%

Code

EML

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(7.9)

(17.8)

(20.1)

Rel (local)

(8.3)

(17.1)

(30.5)

52-week high/low

A$5.75

A$2.78

Business description

EML Payments is a payment solutions company managing thousands of programmes across 27 countries in Europe, North America and Australia. It provides payment solutions for banking, credit and disbursement services, earned wage access, gifts, incentives and rewards, and open banking and FX.

Next events

H122 results

February 2022

Analyst

Katherine Thompson

+44 (0)20 3077 5730

EML Payments is a research client of Edison Investment Research Limited

EML provided a Q122 trading update at its AGM, confirming GDV growth of 14% y-o-y, revenue growth of 29% and underlying EBITDA growth of 11%. Management updated guidance for FY22, tightening the revenue range and leaving the underlying EBITDA and NPATA ranges unchanged. EML is in ongoing dialogue with the Irish regulator and is aiming to substantially complete its remediation plan by the end of CY21. We have revised our forecasts to reflect updated guidance, maintaining our underlying EBITDA and NPATA forecasts this year and reducing them in FY23 and FY24 to reflect slightly lower GDV forecasts for GPR and Digital Payments.

Year end

Revenue (A$m)

PBT*
(A$m)

NPATA** (A$m)

Diluted EPS*
(c)

DPS
(c)

P/E
(x)

EV/EBITDA
(x)

06/20

121.0

21.6

21.0

5.5

0.0

52.9

32.1

06/21

192.2

30.2

21.0

6.6

0.0

44.1

24.8

06/22e

234.2

41.5

29.6

8.8

0.0

33.1

17.7

06/23e

284.6

62.8

52.2

13.2

0.0

22.0

12.2

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Net profit after tax, excluding acquisition-related costs.

Positive Q122 trading update

EML reported gross debit volume (GDV) growth of 14% y-o-y in Q122, with increases across all three divisions. An increase in the group yield (Q122: 95bp, Q121: 84bp) resulted in year-on-year revenue growth of 29%. Increased overheads, the majority related to strengthening the group’s compliance function, meant that underlying EBITDA only increased 11% y-o-y to A$11.2m.

FY22 profitability guidance maintained

EML issued revised guidance for FY22, reducing its expectation for GDV (mainly for Sentenial), tightening the revenue range and maintaining underlying EBITDA and NPATA ranges. The group is investing heavily to strengthen the compliance function to meet the requirements of the Irish regulator, expecting to be substantially through the remediation programme by the end of CY21 and finished by the end of March 2022.

Valuation: Depressed by regulatory issue

The stock took another hit when EML disclosed further Central Bank of Ireland (CBI) correspondence in October, falling back to its previous low of A$2.80 before recovering slightly to the current level post the trading update. In FY23 (when we expect the first positive contribution from Sentenial), EML is trading at a discount to global payment processor peers on an EV/EBITDA and P/E basis, reflecting the profitability and scale of peers, and at a premium to prepaid card peers on the same basis, reflecting its higher growth prospects. Prior to the CBI issue, EML was trading on an FY23e EV/EBITDA of 21.4x and an FY23e P/E of 37.5x. If the regulatory issue is successfully resolved without imposing material growth constraints on the European business, then we would expect the stock to re-rate upwards.

Q122 trading update

For its AGM on 17 November, EML provided a Q122 trading update. We summarise below the financial performance of the business in Q122.

Exhibit 1: Q122 performance

Q122

Q121

y-o-y

GDV (A$bn)

G&I

0.25

0.20

24%

GPR

2.84

2.39

19%

Digital Payments

2.45

2.27

8%

Group GDV

5.54

4.86

14%

Yield (bp)

G&I

526

598

-72

GPR

128

110

18

Digital Payments

10

12

-2

Group yield

95

84

11

Revenue (A$m)

G&I

13.2

12.0

10%

GPR

36.4

26.3

38%

Digital Payments

2.5

2.8

-13%

Net interest contribution

0.4

-0.5

Group revenue

52.4

40.6

29%

Gross profit

34.4

28.7

20%

Gross margin

65.6%

70.6%

Underlying EBITDA (A$m)

11.2

10.0

11%

Underlying EBITDA margin

21.3%

24.7%

Underlying NPATA (A$m)

4.6

3.3

41%

Source: EML Payments

On a divisional basis:

GPR: GDV grew 19% y-o-y and 7% q-o-q, with growth from all regions. This was despite having to put the launch of some new programmes on hold due to the ongoing regulatory issue in Ireland. The number of payroll accounts in Australia grew by 38% y-o-y and gaming volumes grew strongly around the world. The yield benefited from a number of large card orders, in particular for the Northern Ireland stimulus programme (worth c A$140m GDV), which went live in October, leading to revenue growth of 38% y-o-y. The company expects the yield to normalise at c 110bp for the remainder of the year.

G&I: GDV grew 24% y-o-y, 11% versus Q120 and 27% q-o-q, benefiting from recovering footfall in malls in Austria, Canada and Poland and growth in incentive programmes. Demand for gift cards in other geographies remains weak, with the UK down 12% y-o-y and Germany down 30% y-o-y, but should start to recover as the pandemic abates. Yield was lower year-on-year due to a higher proportion of incentive programmes and a reduced level of breakage resulting in 10% growth in revenue year-on-year. Based on trading in October, the division is seeing GDV volumes on a par with the same period in FY20, just before COVID-19 hit. The company noted that pre-COVID-19, the seasonal uplift in Q2 for Christmas shopping typically added A$400m to GDV, A$24m to revenue and A$19m to gross profit.

Digital Payments: as the Sentenial acquisition did not complete until 1 October, this included just the VANs business. GDV increased 8% y-o-y; the launch of buy now, pay later (BNPL) programmes for Humm and Laybuy and higher volumes from Zellis have compensated for the decline in BillGo volumes as it moves processing in-house.

At a group level, Q122 GDV grew 14% y-o-y, revenue 29% y-o-y and gross profit 20% y-o-y. The company noted that the gross margin was affected by an A$0.8m expense related to negative interest rates on stored value float. The company expects this to be fully offset in H2 by changes to its treasury investment policy. Overheads were up 24% y-o-y due to investment in European headcount (mainly to strengthen the compliance function), higher insurance costs and IT expenditure. This resulted in underlying EBITDA (before A$0.9m in CBI-related costs) of A$11.2m, up 11% y-o-y, and a 41% increase in underlying NPATA to A$4.6m.

Business development update

The company noted that in Q122 it signed 23 contracts and launched 64 programmes, ending the quarter with 114 programmes in implementation globally (including 36 on hold due to the CBI issue).

The second Finlabs investment, Hydrogen, went live this week with EML’s first customers and payments. EML recently completed an integration with Aptpay, a Canadian-based payments business using EML’s card payments technology, and the service has been launched supporting card and non-card payments in Canada.

Update on Irish regulatory issue

In October, the company received a second letter from the CBI regarding PFS Card Services (Ireland) Limited (PCSIL), the entity through which PFS’s European (ex-UK) business has operated since 19 December 2020. The CBI acknowledged the remediation programme currently underway and the governance improvements to PCSIL’s board but advised that PCSIL’s proposed material growth policy is higher than the CBI would want to see. It proposed certain limits be applied to programmes, which, if implemented, could have a negative impact on the PCSIL business.

EML sent its response to the potential directions by the 28 October deadline but has not yet heard back. According to the company, the regulator has not found any instances of financial crime, money laundering or terrorism financing nor any deficiencies with respect to safeguarding, capital adequacy or solvency measures. However, as noted by EML the CBI expects e-money institutions to have strong control frameworks in place to mitigate the inherent high risk they see in such institutions. Until the CBI is satisfied that sufficient processes and procedures have been put in place, EML has put the launch of 36 programmes on hold so as not to breach the limits (out of a total of 114 programmes due for implementation globally). To manage the volumes being processed by PCSIL, the business has selectively eliminated some legacy, high volume but low margin programmes to create headroom for better margin new business.

EML noted that it is 45% of the way through Level 1 tasks in its remediation programme and expects it to be substantially complete by Christmas and fully executed by the end of March 2022. EML expects to be allowed to grow the business within the stronger risk and control frameworks being established.

FY22 outlook revised; EBITDA and NPATA guidance unchanged

The company has revised its outlook for FY22, previously disclosed in August when it reported FY21 results. The figures in bold in Exhibit 2 represent revised guidance. EML has reduced its expectations for GDV, with the bulk of the reduction coming from the Sentenial acquisition. However, as this business generates a much lower yield, it does not have a large impact on revenue. The revenue range has been tightened and the gross margin is unchanged as are EBITDA and NPATA. We note that both EBITDA and NPATA are on an underlying basis, which excludes costs related to the CBI issue.

Exhibit 2: FY22 outlook

Old guidance

New guidance

Group

Sentenial

Prepaid

Group

Sentenial

Prepaid

GDV

A$bn

93–100

69–74

24–26

81–88

59–64

22–24

Revenue

A$m

220–255

10–15

210–240

230–250

8–12

222–238

Overheads

A$m

97–106

12–14

85–92

103–112

10–14

91–98

Underlying EBITDA

A$m

58–65

0 to -3

58–65

58–65

0 to -3

58–65

Underlying NPATA

A$m

27–34

27–34

Gross margin

c 69%

c 69%

Source: EML Payments

Changes to forecasts

We have revised our forecasts to reflect Q122 performance and the revised guidance.

Exhibit 3: Revision to estimates

FY22e

FY22e

FY23e

FY23e

FY24e

FY24e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

A$m

235.3

234.2

-0.5%

21.9%

290.1

284.6

-1.9%

21.5%

340.7

327.6

-3.8%

15.1%

Gross profit

A$m

163.3

162.0

-0.8%

26.2%

206.7

203.6

-1.5%

25.7%

247.2

238.0

-3.7%

16.9%

Gross margin

69.4%

69.2%

-0.2%

2.4%

71.3%

71.5%

0.3%

2.4%

72.6%

72.6%

0.1%

1.1%

EBITDA

A$m

60.8

58.9

-3.1%

39.7%

88.4

85.3

-3.5%

44.8%

118.1

110.0

-6.8%

28.9%

EBITDA margin

25.8%

25.2%

-0.7%

3.2%

30.5%

30.0%

-0.5%

4.8%

34.7%

33.6%

-1.1%

3.6%

Add back CBI costs

A$m

0.0

2.0

0.0

0.0

0.0

0.0

Underlying EBITDA

A$m

60.8

60.9

0.2%

13.8%

88.4

85.3

-3.5%

40.1%

118.1

110.0

-6.8%

28.9%

Underlying EBITDA margin

25.8%

26.0%

0.2%

-1.8%

30.5%

30.0%

-0.5%

4.0%

34.7%

33.6%

-1.1%

3.6%

Normalised operating profit

A$m

45.9

44.1

-4.1%

39.5%

68.8

65.8

-4.4%

49.3%

94.8

86.9

-8.4%

32.1%

Normalised operating margin

19.5%

18.8%

-0.7%

2.4%

23.7%

23.1%

-0.6%

4.3%

27.8%

26.5%

-1.3%

3.4%

Reported operating profit

A$m

13.9

12.1

-13.5%

-350.7%

46.3

43.3

-6.5%

259.0%

72.3

64.4

-11.0%

48.7%

Reported operating margin

5.9%

5.1%

-0.8%

7.6%

16.0%

15.2%

-0.7%

10.1%

21.2%

19.6%

-1.6%

4.4%

Normalised PBT

A$m

43.3

41.5

-4.3%

37.4%

65.8

62.8

-4.6%

51.4%

91.9

83.9

-8.7%

33.6%

Reported PBT

A$m

11.3

9.5

-16.5%

-140.6%

43.3

40.3

-6.9%

325.9%

69.4

61.4

-11.5%

52.3%

Normalised net income

A$m

34.7

33.2

-4.3%

37.4%

52.6

50.2

-4.6%

51.4%

73.5

67.1

-8.7%

33.6%

NPATA

A$m

31.1

29.6

-4.8%

40.6%

54.6

52.2

-4.4%

76.7%

75.5

69.1

-8.5%

32.3%

Add back CBI costs

A$m

0.0

1.6

0.0

0.0

0.0

0.0

Underlying NPATA

A$m

31.1

31.2

0.3%

-3.8%

54.6

52.2

-4.4%

67.6%

75.5

69.1

-8.5%

32.3%

Reported net income

A$m

9.1

7.6

-16.5%

-126.4%

34.6

32.2

-6.9%

325.9%

55.5

49.1

-11.5%

52.3%

Normalised basic EPS

A$

0.09

0.09

-4.1%

33.7%

0.14

0.13

-5.0%

50.3%

0.20

0.18

-9.1%

33.6%

Normalised diluted EPS

A$

0.09

0.09

-4.1%

33.7%

0.14

0.13

-5.0%

50.3%

0.19

0.18

-9.1%

33.6%

Reported basic EPS

A$

0.02

0.02

-16.3%

-125.7%

0.09

0.09

-7.4%

322.6%

0.15

0.13

-11.9%

52.3%

NPATA/share

A$

0.08

0.08

-4.6%

36.8%

0.14

0.14

-4.8%

75.3%

0.20

0.18

-8.9%

32.3%

Dividend per share

A$

0.00

0.00

N/A

N/A

0.00

0.00

N/A

N/A

0.00

0.00

N/A

N/A

Net debt/(cash)

A$m

(51.1)

(48.4)

-5.2%

-53.0%

(103.3)

(97.3)

-5.8%

100.9%

(112.1)

(99.3)

-11.4%

2.1%

GDV

A$bn

93.5

83.0

-11.2%

321.9%

126.1

122.1

-3.2%

47.0%

145.6

139.2

-4.4%

14.0%

Yield

bp

25

28

3

-70

23

23

0

-5

23

24

0

0

Divisional data

GDV

G&I

A$bn

1.2

1.3

5%

1.3

1.4

5%

1.5

1.6

5%

GPR

A$bn

13.6

11.8

-14%

15.7

13.6

-14%

17.3

14.9

-14%

Digital Payments

A$bn

78.7

69.9

-11%

109.1

107.1

-2%

126.9

122.7

-3%

Revenue

G&I

A$m

73.0

77.0

5%

80.3

84.7

5%

88.3

93.1

5%

GPR

A$m

136.4

134.7

-1%

156.9

149.1

-5%

172.5

164.0

-5%

Digital Payments

A$m

25.7

22.3

-13%

52.7

50.5

-4%

79.6

70.2

-12%

Gross profit

G&I

A$m

58.4

61.6

5%

64.2

67.7

5%

70.7

74.5

5%

GPR

A$m

83.9

82.2

-2%

99.6

94.7

-5%

112.2

106.6

-5%

Digital Payments

A$m

20.7

18.0

-13%

42.6

40.9

-4%

64.1

56.6

-12%

Gross margin

G&I

80.0%

80.0%

80.0%

80.0%

80.0%

80.0%

GPR

61.5%

61.0%

63.5%

63.5%

65.0%

65.0%

Digital Payments

80.7%

80.9%

80.9%

80.9%

80.6%

80.6%

Source: Edison Investment Research

Valuation

The stock took another hit when EML disclosed further CBI correspondence in October, falling back to its previous low of A$2.80 before recovering slightly post the trading update to the current level. Exhibit 4 shows how EML is trading in relation to three groups: global payment processors, pre-paid card companies and Australian fintechs. In FY22, we are forecasting Sentenial to make a small loss at the EBITDA level, depressing group EBITDA, so comparison to peers is less helpful. In FY23, we expect that Sentenial will generate positive EBITDA. In FY23, EML is trading at a discount to global payment processor peers on an EV/EBITDA and P/E basis, reflecting the scale and profitability of peers. EML trades at a small premium to prepaid card peers on an EV/EBITDA and P/E basis, reflecting its higher growth prospects. Prior to the CBI issue, EML’s valuation metrics for FY23 were an EV/EBITDA multiple of 21.4x and a P/E multiple of 37.5x. If the regulatory issue is successfully resolved without imposing material growth constraints on the European business, then we would expect the stock to re-rate upwards.

Exhibit 4: Peer valuation multiples

Currency

Market cap

(m)

EV/sales

EV/EBITDA

P/E

Div yield

CY

NY

NY+1

CY

NY

NY+1

CY

NY

NY+1

CY

NY

EML Payments

A$

1,087

4.5

3.7

3.2

17.7

12.2

9.5

33.1

22.0

16.5

0.0%

0.0%

Payment processors

Adyen

78,724

75.7

54.6

40.5

122.6

86.9

62.4

172.5

121.8

89.1

0.0%

0.0%

FIS

US$

71,160

6.2

5.7

5.3

14.0

12.6

11.5

17.8

15.5

13.7

1.3%

1.5%

Fiserv

US$

66,565

5.7

5.3

4.9

13.7

12.4

11.3

18.1

15.5

13.4

0.0%

0.0%

Global Payments

US$

38,195

6.1

5.6

5.1

13.1

11.6

10.5

16.1

13.7

11.8

0.6%

0.7%

PayPal Holdings

US$

244,738

9.4

7.9

6.5

32.7

28.0

22.3

44.9

38.7

30.9

0.0%

0.0%

Square

US$

104,848

6.0

5.5

4.6

107.1

96.0

60.5

133.1

119.4

81.4

0.0%

0.0%

Worldline

13,761

4.2

3.8

3.5

17.7

13.8

12.8

22.9

19.0

16.3

0.0%

0.1%

Average

16.2

12.6

10.1

45.8

37.3

27.3

60.8

49.1

36.7

0.3%

0.3%

Prepaid card companies

Appreciate Group

£

48

0.2

0.2

0.2

2.4

1.9

1.6

8.4

6.3

5.3

6.4%

8.3%

Edenred

10,917

7.8

7.0

6.3

19.1

16.9

15.0

33.3

28.7

24.9

1.9%

2.0%

Euronet Worldwide

US$

6,249

1.9

1.6

1.4

14.1

8.7

6.9

31.0

16.1

12.2

0.0%

0.0%

Fleetcor Technologies

US$

19,611

8.6

7.5

6.8

15.1

13.2

11.6

18.5

15.7

13.6

0.0%

0.0%

Green Dot Corp

US$

2,375

2.6

2.4

2.3

16.0

13.7

12.0

19.3

15.9

13.6

0.0%

0.0%

WEX

US$

6,743

5.1

4.6

4.1

12.5

10.8

9.7

16.8

14.1

12.1

0.0%

0.0%

Average

4.4

3.9

3.5

13.2

10.9

9.5

21.2

16.1

13.6

1.4%

1.7%

Australian fintechs

Afterpay Ltd

A$

33,497

22.1

14.4

10.8

274.5

101.8

50.6

N/A

397.8

131.1

0.0%

0.0%

FlexiGroup Ltd

A$

411

5.6

4.7

4.1

27.9

24.4

19.5

7.5

6.3

5.0

5.9%

6.3%

Zip Co Ltd

A$

3,412

7.0

4.9

3.9

N/A

N/A

N/A

N/A

N/A

N/A

0.0%

0.0%

Average

11.5

8.0

6.3

151.2

63.1

35.1

7.5

202.0

68.1

2.0%

2.1%

Source: Edison Investment Research, Refinitiv (as at 16 November)


Exhibit 5: Financial summary

A$m

2018

2019

2020

2021

2022e

2023e

2024e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

71.0

97.2

121.0

192.2

234.2

284.6

327.6

Cost of Sales

(17.7)

(24.2)

(32.9)

(63.8)

(72.2)

(81.0)

(89.6)

Gross Profit

53.3

73.0

88.1

128.4

162.0

203.6

238.0

EBITDA

 

 

21.0

29.7

32.5

42.2

58.9

85.3

110.0

Normalised operating profit

 

 

18.1

25.6

22.4

31.6

44.1

65.8

86.9

Amortisation of acquired intangibles

(7.2)

(7.5)

(11.1)

(20.2)

(20.0)

(20.0)

(20.0)

Exceptionals

(0.3)

(3.0)

(13.6)

(11.2)

(2.0)

0.0

0.0

Share-based payments

(5.0)

(4.2)

(6.1)

(5.0)

(10.0)

(2.5)

(2.5)

Reported operating profit

5.6

10.9

(8.5)

(4.8)

12.1

43.3

64.4

Net Interest

(0.1)

(0.0)

(0.7)

(1.4)

(2.6)

(3.0)

(3.0)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(0.5)

(1.8)

1.3

(17.1)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

17.9

25.6

21.6

30.2

41.5

62.8

83.9

Profit Before Tax (reported)

 

 

5.0

9.0

(7.9)

(23.3)

9.5

40.3

61.4

Reported tax

(2.8)

(0.6)

0.7

(5.4)

(1.9)

(8.1)

(12.3)

Profit After Tax (norm)

14.4

20.5

17.2

24.1

33.2

50.2

67.1

Profit After Tax (reported)

2.2

8.5

(7.1)

(28.7)

7.6

32.2

49.1

Minority interests

0.0

(0.2)

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

14.4

20.3

17.2

24.1

33.2

50.2

67.1

Net income (reported)

2.2

8.3

(7.1)

(28.7)

7.6

32.2

49.1

Basic ave. number of shares outstanding (m)

246

249

304

360

371

373

373

EPS - basic normalised (A$)

 

 

0.058

0.081

0.056

0.067

0.090

0.135

0.18

EPS - diluted normalised (A$)

 

 

0.057

0.078

0.055

0.066

0.088

0.132

0.18

EPS - basic reported (A$)

 

 

0.009

0.033

(0.023)

(0.080)

0.020

0.086

0.13

Dividend (A$)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

22.5

36.9

24.4

58.9

21.9

21.5

15.1

Gross Margin (%)

75.1

75.1

72.8

66.8

69.2

71.5

72.6

EBITDA Margin (%)

29.6

30.6

26.9

21.9

25.2

30.0

33.6

Normalised Operating Margin (%)

25.4

26.4

18.5

16.4

18.8

23.1

26.5

BALANCE SHEET

Fixed Assets

 

 

108.0

162.9

872.1

685.3

969.1

1,004.2

1,033.5

Intangible Assets

65.8

104.6

371.7

350.1

506.8

489.0

470.1

Tangible Assets

3.5

5.4

14.6

11.2

7.7

3.9

4.9

Investments & other

38.7

53.0

485.8

323.9

454.6

511.3

558.4

Current Assets

 

 

131.6

313.8

1,008.6

1,603.5

1,790.3

2,068.6

2,210.1

Stocks

12.6

18.2

22.3

16.4

19.0

20.9

23.0

Debtors

8.9

14.4

21.7

22.0

26.7

32.5

37.4

Cash & cash equivalents

39.0

33.1

118.4

141.2

117.7

166.5

117.6

Other

71.1

248.2

846.2

1,424.0

1,626.9

1,848.8

2,032.2

Current Liabilities

 

 

(90.5)

(299.0)

(1,357.8)

(1,792.8)

(2,111.8)

(2,398.9)

(2,628.5)

Creditors

(21.2)

(33.9)

(47.5)

(62.9)

(71.8)

(81.5)

(89.0)

Tax and social security

0.0

(0.8)

(2.6)

(6.0)

(6.0)

(6.0)

(6.0)

Short term borrowings

0.0

(15.0)

0.0

(1.4)

(1.4)

(1.4)

(1.4)

Other

(69.3)

(249.4)

(1,307.7)

(1,722.5)

(2,032.6)

(2,310.0)

(2,532.1)

Long Term Liabilities

 

 

(19.3)

(33.5)

(82.6)

(81.1)

(167.1)

(158.7)

(48.2)

Long term borrowings

0.0

0.0

(35.8)

(36.9)

(67.9)

(67.9)

(16.9)

Other long-term liabilities

(19.3)

(33.5)

(46.8)

(44.2)

(99.2)

(90.9)

(31.4)

Net Assets

 

 

129.8

144.2

440.2

414.9

480.5

515.3

566.9

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

129.8

144.2

440.2

414.9

480.5

515.3

566.9

CASH FLOW

Op Cash Flow before WC and tax

19.7

28.4

31.2

41.2

58.0

84.4

109.1

Working capital

(9.2)

2.0

3.6

31.7

(0.1)

0.9

(0.8)

Exceptional & other

(1.2)

(0.7)

(12.7)

(17.3)

(31.0)

0.0

0.0

Tax

(2.8)

(0.6)

0.7

(5.4)

(1.9)

(8.1)

(12.3)

Net operating cash flow

 

 

6.5

29.2

22.8

50.2

24.9

77.3

96.0

Capex

(5.3)

(5.8)

(11.0)

(12.6)

(14.0)

(17.1)

(19.3)

Acquisitions/disposals

(0.7)

(44.0)

(142.5)

(3.5)

(61.6)

(7.1)

(70.4)

Net interest

(0.1)

(0.0)

(0.7)

(1.4)

(2.6)

(3.0)

(3.0)

Equity financing

0.0

0.4

240.8

0.6

0.0

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(0.6)

(0.4)

(7.0)

(11.0)

(1.2)

(1.2)

(1.2)

Net Cash Flow

(0.2)

(20.6)

102.3

22.2

(54.6)

48.9

2.0

Opening net debt/(cash)

 

 

(39.9)

(39.0)

(18.1)

(82.5)

(103.0)

(48.4)

(97.3)

FX

(0.6)

(0.3)

(2.0)

0.6

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

(35.8)

(2.4)

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(39.0)

(18.1)

(82.5)

(103.0)

(48.4)

(97.3)

(99.3)

Source: EML Payments, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by EML Payments and prepared and issued by Edison, in consideration of a fee payable by EML Payments. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

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Level 4, Office 1205

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by EML Payments and prepared and issued by Edison, in consideration of a fee payable by EML Payments. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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