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Showing the benefits of diversification

EML Payments 19 February 2021 Update
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EML Payments

Showing the benefits of diversification

H121 results

Software & comp services

19 February 2021

Price

A$5.08

Market cap

A$1,838m

US$0.78/€0.64/£0.56/A$

Net cash (A$m) at end H121

100.3

Shares in issue

361.8m

Free float

93%

Code

EML

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

37.8

41.6

(7.4)

Rel (local)

33.6

33.1

(6.7)

52-week high/low

A$5.14

A$1.33

Business description

EML Payments is a payment solutions company specialising in the prepaid stored value market, with mobile, physical and virtual card offerings. It provides solutions for payouts, gifts, incentives, rewards and supplier payments, managing thousands of programmes across 28 countries in Europe, North America and Australia.

Next events

Trading update

May 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

EML Payments is a research client of Edison Investment Research Limited

EML Payments reported robust H121 results, with revenue growth of 61% and NPATA growth of 30% y-o-y. The GPR division, which now makes up 57% of group revenue, saw strong organic growth in H1, compensating for the lower volumes experienced in the malls segment of the G&I division. Management has reinstated guidance for FY21 and we have upgraded our forecasts to reflect the more positive outlook.

Year end

Revenue (A$m)

PBT*
(A$m)

NPATA** (A$m)

Dil. EPS*
(c)

DPS
(c)

P/E
(x)

EV/EBITDA
(x)

06/19

97.2

25.6

20.6

7.8

0.0

65.0

59.1

06/20

121.0

21.6

24.0

5.5

0.0

91.8

54.0

06/21e

182.2

34.7

30.8

7.5

0.0

67.5

35.1

06/22e

226.3

52.4

44.1

11.3

0.0

44.9

24.8

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.

Benefiting from first full contribution of PFS

In H121, EML reported gross debit volume (GDV) growth of 54% y-o-y, revenue growth of 61%, EBITDA growth of 42% and NPATA growth of 30%. GPR saw a good performance from both PFS (acquired in April 2020) and the original EML business, with digital banking and government programmes particularly strong. The strong performance of PFS has resulted in a A$25m increase in the fair value of contingent consideration (up to the maximum of £55m/A$98m). The Gift part of G&I suffered from the closure of malls during the vital Christmas shopping period, while the Incentive part of the business saw double-digit growth as digital card programmes proved popular. VANs reported a steady performance, with volume-based gross margin gains and new contracts signed to support growth in H221. As part of the Project Accelerator strategy to position the company at the forefront of payment-related technology, EML made its first two investments via its FinLabs incubator.

Confidence returning; guidance reinstated

For the first time in nearly a year, management has issued guidance for FY21. The low end of the range was above our forecasts, and we have upgraded our forecasts accordingly. The main driver of upside is the GPR division, which has performed better than we expected. At the same time, management expects to invest more this year to manage and drive increased levels of activity. We remain conservatively at the lower end of the guidance range, while upgrading FY21 revenue by 5.0%, EBITDA by 3.3% and NPATA by 9.1%.

Valuation: Project Accelerator key to upside

On EV/EBITDA and P/E multiples, EML trades at a discount to global payment processing companies and at a premium to prepaid card companies, reflecting the scale and profitability of the former, and EML’s better growth prospects compared to the latter. A reverse DCF analysis implies that the market is factoring in double-digit revenue growth for the company after our forecast period, which successful execution of Project Accelerator should support.

Review of H121 results

The table below summarises the company’s performance at a group and divisional level for H121.

Exhibit 1: Divisional and group results, H121

H121

H120

y-o-y

H121

H120

y-o-y

GDV (A$bn)

Gross profit (A$m)

G&I

0.75

0.84

(11%)

G&I

28.8

32.3

(11%)

GPR

4.87

1.47

232%

GPR

34.1

8.7

290%

VANS

4.59

4.31

6%

VANS

4.2

3.4

23%

Group GDV

10.21

6.62

54%

Group

67.3

44.8

50%

Yield (bp)

Gross margin

G&I

467

479

(12)

G&I

82.3%

80.4%

1.9%

GPR

112

89

23

GPR

62.6%

66.4%

(3.8%)

VANS

13

13

(0)

VANS

73.3%

62.4%

10.9%

Group yield

93

89

4

Group

70.5%

75.7%

(5.2%)

Revenue (A$m)

H121

FY20

h-o-h

G&I

35.0

40.1

(13%)

Cash

136.5

118.4

15%

GPR

54.4

13.2

314%

Net cash

100.3

82.5

22%

VANS

5.8

5.5

5%

Net interest contribution

0.1

0.3

(63%)

Group revenue

95.3

59.2

61%

EBITDA (A$m)

28.1

19.7

42%

EBITDA margin

29.4%

33.3%

(3.9%)

NPATA (A$m)

13.2

10.1

30%

Source: EML Payments

In H121, EML reported GDV growth of 54% y-o-y, revenue growth of 61%, EBITDA growth of 42% and NPATA growth of 30%. EML’s NPATA measure adjusts profit after tax to exclude acquisition-related items, such as amortisation of acquired intangibles and changes in fair value of contingent consideration. In H121, this included a A$24.9m charge to reflect the increase in the fair value of contingent consideration, mainly for PFS (up to the maximum of £55m), resulting from better-than-expected performance of the acquired business.

Cash increased by A$18.1m: underlying operating cash flow of A$35.1m was offset by A$9.8m in FinLab investments, $4.8m in capitalised development costs and A$2.9 in tax and interest payments.

General Purpose Reloadable (GPR) – strong organic growth

The division saw GDV growth of 232% y-o-y, as PFS (acquired on 1 April 2020) was included for the full six months for the first time. The company noted that PFS contributed GDV of A$3.12bn and the original EML business A$1.75bn (+20% y-o-y). The divisional yield increased by 23bp y-o-y, as the higher yielding PFS business made up a greater proportion of divisional GDV. PFS contributed revenue of A$38.0m and EML $16.4m (+25% y-o-y). Overall, divisional revenue increased 314% year-on-year. Gross margin declined y-o-y, reflecting the higher costs of the PFS business, which uses third party payment processors.

Two areas of strength for the original business were:

Australian salary packaging – this grew from 233,000 accounts at the end of FY20 to 282,000 by the end of H121 as the migration of Smart Salary accounts continued. It has since increased to 286,000 accounts with the target to hit 300,000 by the end of FY21. Revenue from this segment increased by 60% y-o-y.

Gaming disbursements – ended December on an annualised GDV run rate of A$1bn. Revenue increased by 42% y-o-y. The division launched payout cards for Paddy Power in the European market towards the end of H1, which should drive growth in H2.

PFS saw strong demand for its solutions, with digital banking and government programmes a particular area of strength. This includes programmes with the UK Home Office (which is moving into phase 2) and the Jersey government (stimulus programme).

The division signed 55 new contracts in H1.

During H1, EML became a primary member of Faster Payments in the UK. Until now, it has used a third-party processor for this. The company estimates this will generate cost savings of c £480k in FY22.

Gift & Incentive – GDV hit by mall closures

The two parts of this division performed in very different ways.

Gift: as shopping malls went into various stages of lockdown from early to mid-December, H121 GDV was down 19% y-o-y (down 18% in North America, down 20% in the UK/Europe). The Christmas shopping season is crucial for mall operators – with malls closed it was difficult for consumers to buy mall gift cards and they would have been less keen to buy them as gifts if they could not be spent. The company noted that GDV for January 2021 was down 50% y-o-y in the US and Canada, down 70% in the UK and down 54% in Europe. Management expects volumes to start to improve as lockdowns are relaxed (most likely from April), helped by vaccine roll-outs around the world. The company expects to recognise breakage revenue of A$3.8m in H221, down from A$6.8m in H220, reflecting the lower level of gift card sales in the run up to Christmas.

Incentive: this business saw GDV growth of 11% y-o-y in H121 (North America +13%, Australia +15%, UK/Europe +8%). The company continues to sign up new partners and to launch new programmes. In H1, reflecting the shift from physical to digital solutions, it ran 150 digital PAYS gift card programmes.

Overall, divisional GDV declined 11% y-o-y and the yield reduced by 12bp to 467bp, resulting in a y-o-y revenue decline of 13%. Breakage rates were temporarily higher due to lower card spend, resulting in gross margin increasing from 80.4% in H120 to 82.3% in H121. We note that breakage made up 16% of group revenue, down from 26% a year ago.

In anticipation of improving volumes, the company has continued to invest in technology within this division, launching the new EML Retail platform, which enables mall operators to sell cards both in store and online.

VANs – gross margin boost from higher volumes

This division saw steady progress in H121: GDV growth of 6% and a flat yield of 13bp resulted in revenue growth of 5%. Volume rebates resulted in gross margin jumping from 62.4% in H120 to 73.3% in H121, which should be sustainable as long as volumes remain at or above current levels. Management noted that it closed H121 with an annualised GDV of $9.8bn (+20% y-o-y). The division signed five contracts in H1 and is expecting to launch these programmes by the end of H2.

Progress of Project Accelerator

EML announced its Project Accelerator strategy in August last year. As a reminder, this is designed to help the company fulfil its vision of ‘offering customers a feature-rich, fully embedded payment solution, via a simple, single touchpoint’. The group wants to benefit from working with companies looking to disrupt their own industries, using EML’s payments technology to help them do so. To remain at the forefront of innovation, the group plans to focus its investment in four areas:

In-house development of product and infrastructure: to make it easy for customers to use EML’s solutions. For example, creating a single point of integration for customers to access EML’s operations in different countries or developing a tokenisation solution for Visa cards so that EML can support the customer’s choice of card network.

Integration with adjacent technologies: to add additional functionality that the company does not necessarily want to develop itself.

Partnering with disruptive fintechs: potentially to use as a route to sell each other’s products.

External investment: the company has set up FinLabs to invest in minority stakes in companies with interesting and relevant technology.

The company expects to spend A$10–15m over the next two years, some of which will be capitalised. The remainder will be funded through cost savings.

EML has already made its first two FinLabs investments:

1.

US$2m investment for a 10% stake in Interchecks, a US-based disbursement tool for non-card payments. EML will also resell Interchecks’ technology. Systems integration has been completed and initial contracts have been signed.

2.

US$5m investment for an 11% stake in The Hydrogen Technology Corporation (Hydrogen). US-based Hydrogen provides an embedded finance and international payments platform. Systems integration is underway; more than 100 companies are involved in beta testing.

Outlook and changes to forecasts

With the onset of the pandemic, the company withdrew guidance in March last year. It has now reinstated it for FY21:

Revenue: A$180–190m.

EBITDA: A$50–54m.

NPATA: A$30–33.5m.

Operating cash flow conversion: 90–110%.

EBITDA per share: 13.8-15.0c.

We have revised our forecasts to reflect H121 results and the new guidance. On a divisional basis, we have increased our GDV forecasts and gross margin assumptions for GPR and VANs; for G&I we have slightly increased our yield and gross margin assumptions but have left GDV unchanged.

The company had previously suggested that cash overheads would be in the range of A$66–72m (depending on the level of bonus accruals), but now expects this to be more like A$76–80m. As business in GPR was better than expected, considering COVID-19 disruption, the company decided to invest more in the business to support growth. The table below summarises the changes to our estimates.

We have reflected the increased estimate for PFS contingent consideration and added the two FinLabs acquisitions.

Exhibit 2: Changes to forecasts

FY21e

FY22e

FY23e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

A$m

173.4

182.2

5.0%

50.6%

218.8

226.3

3.4%

24.2%

247.4

255.9

3.5%

13.1%

Gross profit

A$m

117.2

125.4

7.0%

42.4%

150.4

157.0

4.4%

25.2%

171.9

179.6

4.4%

14.4%

Gross margin

67.6%

68.8%

1.2%

-4.0%

68.7%

69.4%

0.7%

0.6%

69.5%

70.2%

0.7%

0.8%

EBITDA

A$m

48.4

50.1

3.3%

53.9%

70.6

70.7

0.1%

41.1%

87.7

87.9

0.2%

24.5%

EBITDA margin

27.9%

27.5%

-1.6%

0.6%

32.3%

31.2%

-3.2%

3.7%

35.5%

34.4%

-3.1%

3.1%

Normalised operating profit

A$m

35.4

36.1

1.9%

61.5%

54.0

53.8

-0.3%

49.1%

68.4

68.5

0.2%

27.3%

Normalised operating profit margin

20.4%

19.8%

-0.6%

1.3%

24.7%

23.8%

-0.9%

4.0%

27.7%

26.8%

-0.9%

3.0%

Reported operating profit

A$m

11.9

7.7

-35.9%

-235.7%

37.5

37.3

-0.4%

388.2%

51.9

52.0

0.2%

39.4%

Reported operating margin

6.9%

4.2%

-2.7%

8.9%

17.1%

16.5%

-0.6%

12.3%

21.0%

20.3%

-0.7%

3.8%

Normalised PBT

A$m

35.3

34.7

-1.6%

60.5%

53.7

52.4

-2.4%

51.1%

68.2

67.1

-1.5%

28.0%

Reported PBT

A$m

5.3

(26.1)

-595.8%

297.7%

30.7

34.4

12.1%

-231.8%

45.2

49.6

9.9%

44.1%

Normalised net income

A$m

28.2

27.8

-1.6%

60.5%

43.0

42.0

-2.4%

51.1%

54.5

53.7

-1.5%

28.0%

NPATA

A$m

28.2

30.8

9.1%

28.0%

46.1

44.1

-4.4%

43.1%

56.6

54.7

-3.4%

24.2%

Reported net income

A$m

4.2

(20.9)

-595.8%

257.3%

24.6

27.6

12.1%

-231.8%

36.1

39.7

9.9%

44.1%

Normalised basic EPS

A$

0.08

0.08

-1.6%

35.2%

0.12

0.12

-2.5%

50.5%

0.15

0.15

-1.6%

28.0%

Normalised diluted EPS

A$

0.08

0.08

-1.6%

36.0%

0.12

0.11

-2.5%

50.5%

0.15

0.15

-1.6%

28.0%

Reported basic EPS

A$

0.01

-0.06

-595.6%

200.9%

0.07

0.08

12.0%

-231.3%

0.10

0.11

9.8%

44.1%

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

(112.2)

(109.1)

-2.8%

32.2%

(126.6)

(114.0)

-9.9%

4.5%

(151.8)

(129.7)

-14.6%

13.8%

GDV

A$bn

19.9

20.6

3.4%

48.6%

23.4

24.2

3.5%

17.3%

26.3

27.2

3.6%

12.6%

Take rate

0.87%

0.88%

0.0%

0.01%

0.94%

0.94%

0.0%

0.05%

0.94%

0.94%

0.0%

0.00%

Source: Edison Investment Research

Valuation

Exhibit 3: Peer group valuation multiples

Currency

Market

EV/Sales (x)

EV/EBITDA (x)

P/E (x)

Div yield (%)

cap (m)

CY

NY

CY

NY

CY

NY

CY

NY

EML Payments

A$

1,838

9.6

7.8

35.1

24.8

67.5

44.9

0.0

0.0

Payment processors

Adyen

66,517

66.0

47.8

109.0

74.6

261.7

165.4

0.0

0.0

FIS

US$

84,141

7.3

6.7

16.3

14.6

21.3

18.4

1.1

1.2

Fiserv

US$

73,741

6.2

5.8

14.9

13.5

20.3

17.3

0.0

0.0

Global Payments

US$

59,023

8.8

8.1

18.6

16.6

24.8

21.4

0.4

0.4

PayPal Holdings

US$

349,444

13.5

11.2

46.0

37.6

65.5

51.8

0.0

0.0

Square

US$

122,993

13.0

9.5

286.1

180.8

360.2

237.8

0.0

0.0

Worldline

21,987

8.1

4.2

35.1

17.3

46.5

32.3

0.0

0.0

Average

17.6

13.3

75.2

50.7

114.3

77.8

0.2

0.2

Average excl Square

18.3

14.0

40.0

29.0

73.3

51.1

0.2

0.3

Prepaid card companies

Appreciate Group

£

79

0.6

0.6

9.2

6.1

21.2

12.9

2.8

4.0

Edenred

11,750

9.1

8.4

23.2

20.4

43.8

36.9

1.5

1.6

Euronet Worldwide

US$

7,795

2.9

2.5

16.4

11.5

26.5

18.2

0.0

0.0

Fleetcor Technologies

US$

22,113

9.6

8.7

16.9

14.9

21.2

18.2

0.0

0.0

Green Dot Corp

US$

2,910

2.6

2.5

15.4

13.6

27.5

24.6

0.0

0.0

WEX

US$

9,770

7.4

6.4

16.8

14.9

36.4

27.0

0.0

0.0

Average

5.4

4.8

16.3

13.6

29.4

23.0

0.7

0.9

Australian fintechs

Afterpay

A$

43,957

46.3

29.1

431.7

181.0

1274.7

329.8

0.0

0.0

FlexiGroup

A$

649

6.9

6.5

N/A

N/A

9.3

9.8

2.6

4.4

Zip Co

A$

6,992

21.3

13.5

N/A

512.4

N/A

N/A

0.0

0.0

Average

24.9

16.3

43.7

346.7

387.6

1.5

0.9

1.5

Source: Edison Investment Research, Refinitiv (as at 15 February)

On an EV/EBITDA and P/E basis, EML trades at a discount to payment processors, in our view reflecting their scale and profitability compared to EML. EML trades at a premium to prepaid card companies, justified in our view because of its growth potential. It is forecast to grow EPS at a faster rate than both groups over the next two years.

We have performed a discounted cash flow analysis to estimate the growth rates and margin assumptions factored into the current share price after the explicit forecast period. Using a WACC of 8% and a long-term growth rate of 3%, we estimate that the market is pricing in revenue growth of 12% in FY25–30e with an EBITDA margin of 37.3% (this compares to 6.5% and 35.2% respectively when we last wrote). In our view, these higher growth rates are supported by H1 results, which confirmed that the GPR division is exhibiting strong growth, and the ongoing vaccine roll-out, which should allow restrictions to be lifted in the mall space.

Exhibit 4: Financial summary

A$m

2017

2018

2019

2020

2021e

2022e

2023e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

58.0

71.0

97.2

121.0

182.2

226.3

255.9

Cost of Sales

(13.7)

(17.7)

(24.2)

(32.9)

(56.8)

(69.3)

(76.3)

Gross Profit

44.2

53.3

73.0

88.1

125.4

157.0

179.6

EBITDA

 

 

14.5

21.0

29.7

32.5

50.1

70.7

87.9

Normalised operating profit

 

 

11.9

18.1

25.6

22.4

36.1

53.8

68.5

Amortisation of acquired intangibles

(8.9)

(7.2)

(7.5)

(10.6)

(18.5)

(14.0)

(14.0)

Exceptionals

0.2

(0.3)

(3.0)

(11.2)

(3.6)

0.0

0.0

Share-based payments

(5.3)

(5.0)

(4.2)

(6.1)

(6.3)

(2.5)

(2.5)

Reported operating profit

(2.1)

5.6

10.9

(5.6)

7.7

37.3

52.0

Net Interest

0.0

(0.1)

(0.0)

(0.7)

(1.4)

(1.4)

(1.4)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

(0.5)

(1.8)

(0.2)

(32.4)

(1.5)

(1.0)

Profit Before Tax (normalised)

 

 

11.9

17.9

25.6

21.6

34.7

52.4

67.1

Profit Before Tax (reported)

 

 

(2.1)

5.0

9.0

(6.6)

(26.1)

34.4

49.6

Reported tax

2.1

(2.8)

(0.6)

0.7

5.2

(6.9)

(9.9)

Profit After Tax (normalised)

8.9

14.4

20.5

17.3

27.8

42.0

53.7

Profit After Tax (reported)

0.0

2.2

8.5

(5.9)

(20.9)

27.6

39.7

Minority interests

0.0

0.0

(0.2)

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)

8.9

14.4

20.3

17.3

27.8

42.0

53.7

Net income (reported)

0.0

2.2

8.3

(5.9)

(20.9)

27.6

39.7

Basic average number of shares outstanding (m)

245

246

249

304

361

362

362

EPS - basic normalised (A$)

 

 

0.036

0.058

0.081

0.057

0.077

0.116

0.148

EPS - diluted normalised (A$)

 

 

0.036

0.057

0.078

0.055

0.075

0.113

0.145

EPS - basic reported (A$)

 

 

0.000

0.009

0.033

(0.019)

(0.058)

0.076

0.110

Dividend (A$)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

148.6

22.5

36.9

24.4

50.6

24.2

13.1

Gross Margin (%)

76.3

75.1

75.1

72.8

68.8

69.4

70.2

EBITDA Margin (%)

25.1

29.6

30.6

26.9

27.5

31.2

34.4

Normalised Operating Margin

20.5

25.4

26.4

18.5

19.8

23.8

26.8

BALANCE SHEET

Fixed Assets

 

 

90.6

108.0

162.9

905.2

905.7

988.7

1,049.6

Intangible Assets

60.1

65.8

104.6

404.7

384.0

371.2

356.7

Tangible Assets

2.8

3.5

5.4

14.6

12.0

9.6

7.1

Investments & other

27.6

38.7

53.0

485.8

509.6

607.9

685.9

Current Assets

 

 

96.9

131.6

313.8

1,001.1

1,271.8

1,513.5

1,716.3

Stocks

10.3

12.6

18.2

22.3

20.9

23.0

25.3

Debtors

6.3

8.9

14.4

21.7

32.3

39.9

45.0

Cash & cash equivalents

39.9

39.0

33.1

118.4

144.9

149.8

165.5

Other

40.4

71.1

248.2

838.7

1,073.6

1,300.8

1,480.5

Current Liabilities

 

 

(62.8)

(90.5)

(299.0)

(1,326.3)

(1,628.5)

(1,963.6)

(2,205.7)

Creditors

(23.8)

(21.2)

(33.9)

(47.5)

(60.3)

(70.8)

(76.3)

Tax and social security

(0.0)

0.0

(0.8)

(0.2)

(0.2)

(0.2)

(0.2)

Short term borrowings

0.0

0.0

(15.0)

0.0

0.0

0.0

0.0

Other

(39.0)

(69.3)

(249.4)

(1,278.6)

(1,568.1)

(1,892.6)

(2,129.1)

Long Term Liabilities

 

 

(4.2)

(19.3)

(33.5)

(139.0)

(125.3)

(85.0)

(64.3)

Long term borrowings

0.0

0.0

0.0

(35.8)

(35.8)

(35.8)

(35.8)

Other long-term liabilities

(4.2)

(19.3)

(33.5)

(103.2)

(89.4)

(49.1)

(28.5)

Net Assets

 

 

120.6

129.8

144.2

441.0

423.6

453.7

495.9

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

120.6

129.8

144.2

441.0

423.6

453.7

495.9

CASH FLOW

Op Cash Flow before WC and tax

13.1

19.7

28.4

31.2

48.2

68.8

86.1

Working capital

4.9

(9.2)

2.0

3.6

4.2

(0.1)

(2.8)

Exceptional & other

(0.8)

(1.2)

(0.7)

(12.7)

(1.5)

0.0

0.0

Tax

2.1

(2.8)

(0.6)

0.7

5.2

(6.9)

(9.9)

Net operating cash flow

 

 

19.3

6.5

29.2

22.8

56.2

61.9

73.4

Capex

(2.9)

(5.3)

(5.8)

(11.0)

(13.1)

(13.8)

(14.5)

Acquisitions/disposals

0.0

(0.7)

(44.0)

(142.5)

(13.3)

(40.0)

(40.0)

Net interest

0.0

(0.1)

(0.0)

(0.7)

(1.4)

(1.4)

(1.4)

Equity financing

0.2

0.0

0.4

240.8

0.0

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(3.6)

(0.6)

(0.4)

(7.0)

(1.8)

(1.8)

(1.8)

Net Cash Flow

13.0

(0.2)

(20.6)

102.3

26.5

4.9

15.7

Opening net debt/(cash)

 

 

(26.9)

(39.9)

(39.0)

(18.1)

(82.5)

(109.1)

(114.0)

FX

(0.0)

(0.6)

(0.3)

(2.0)

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

(35.8)

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(39.9)

(39.0)

(18.1)

(82.5)

(109.1)

(114.0)

(129.7)

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 £49,500 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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60325 Frankfurt

Germany

London +44 (0)20 3077 5700

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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

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

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 £49,500 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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