EML Payments — Back to basics

EML Payments (ASX: EML)

Last close As at 10/10/2024

AUD0.64

0.00 (0.00%)

Market capitalisation

AUD236m

More on this equity

Research: TMT

EML Payments — Back to basics

EML Payments’ FY24 results were the first to show the full impact of the liquidation of PFS Card Services Ireland Limited (PCSIL). Continuing operations, which exclude PCSIL, saw gross debit volume (GDV) growth of 18%, revenue growth of 18% and underlying EBITDA growth of 34%. The sale of Sentenial has since completed with proceeds of A$53.4m, moving EML to a net cash position. Management is now focused on moving back to a growth mindset in the remaining business and optimising the cost base post the disposals. Shifting away from the medium-term targets given in February, management expects to disclose more at its AGM in November. We have reduced our FY25 forecasts to reflect the more modest EBITDA guidance and to remove the Sentenial business.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

EML Payments

Back to basics

FY24 results

Software and comp services

6 September 2024

Price

A$0.73

Market cap

A$274m

Net debt (A$m) at end FY24

42.8

Shares in issue

375.2m

Free float

93%

Code

EML

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(6.2)

(17.5)

(34.3)

Rel (local)

(10.0)

(19.2)

(39.7)

52-week high/low

A$1.27

A$0.70

Business description

EML Payments is a payment solutions company managing thousands of programmes across 32 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

AGM

November 2024

Analyst

Katherine Thompson

+44 (0)20 3077 5700

EML Payments is a research client of Edison Investment Research Limited

EML Payments’ FY24 results were the first to show the full impact of the liquidation of PFS Card Services Ireland Limited (PCSIL). Continuing operations, which exclude PCSIL, saw gross debit volume (GDV) growth of 18%, revenue growth of 18% and underlying EBITDA growth of 34%. The sale of Sentenial has since completed with proceeds of A$53.4m, moving EML to a net cash position. Management is now focused on moving back to a growth mindset in the remaining business and optimising the cost base post the disposals. Shifting away from the medium-term targets given in February, management expects to disclose more at its AGM in November. We have reduced our FY25 forecasts to reflect the more modest EBITDA guidance and to remove the Sentenial business.

Year end

Revenue
(A$m)

EBITDA* (A$m)

PBT**
(A$m)

Diluted

EPS** (c)

DPS
(c)

P/E
(x)

EV/EBITDA*
(x)

06/23***

183.9

36.7

(9.6)

(2.0)

0

N/A

7.2

06/24***

217.3

49.0

16.6

3.4

0

21.3

5.4

06/25e

208.9

54.8

35.0

7.2

0

10.1

4.8

06/26e

217.0

58.5

42.5

8.8

0

8.3

4.5

Note: *Underlying. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. ***Continuing operations: excludes PCSIL, includes Sentenial.

Major surgery complete, balance sheet strengthened

After a long period of regulatory-related challenges, EML has shut down the problematic PCSIL business and had the growth cap removed in the UK General Purpose Reloadable (GPR) business. The Sentenial disposal, announced in March, completed on 3 September, bringing in proceeds of A$53.4m and moving EML to a net cash position. This brings the group back to a structure more like that prior to the April 2020 acquisition of PFS, albeit now including PFS’s UK business.

Forecasts reflect new structure

We have revised our forecasts to strip out Sentenial, which we assumed was operating close to break-even in FY25 and FY26. We have also revised down our profit forecasts to reflect the company guidance for underlying EBITDA of A$54–60m in FY25. We forecast underlying EBITDA of A$54.8m in FY25 (26.3% margin), rising to A$58.5m in FY26 (27.0% margin). As well as rebuilding the group’s sales capability, management will be focused on creating a market-driven product strategy, building the correct organisational structure for growth and rationalising its cost base now that PCSIL and Sentenial have gone.

Valuation: Streamlined and ready to grow

The stock continues to trade at a material discount to global payment processor and prepaid card peers on an EV/sales and EV/underlying EBITDA basis, despite the main obstacles to profitable growth having been removed. Reinvigorating growth and reducing the cost base of the remaining businesses will be key to closing this discount.

Review of FY24 results

EML Payments reported FY24 results with the PCSIL business treated as discontinued operations. As the Sentenial disposal had not yet received all regulatory approvals, it was reported within continuing operations. The table below shows the performance of continuing operations in FY24 and FY23. Our published forecasts included PCSIL so were not comparable. In our note published on 5 March, we discussed pro forma estimates for the group, forecasting FY24 revenue of A$218.7m and underlying EBITDA of A$47.2m, comparable to the numbers reported in Exhibit 1. Including PCSIL, the group generated underlying EBITDA of A$57.1m in FY24, at the top end of guidance of A$52–58m.

Exhibit 1: FY24 results highlights

FY23

FY24

y-o-y

Revenues (A$m)

183.9

217.3

18.1%

Gross profit (A$m)

132.9

165.9

24.8%

Gross margin

72.3%

76.3%

4.1pp

Underlying gross profit (A$m)

139.7

166.1

18.9%

Underlying gross margin

76.0%

76.4%

0.5pp

EBITDA (A$m)

8.6

38.1

341.7%

EBITDA margin

4.7%

17.5%

12.8pp

Add back one-off costs (A$m)

28.1

10.9

N/A

Underlying EBITDA (A$m)

36.7

49.0

32.2%

Underlying EBITDA margin

20.2%

22.5%

2.4pp

Normalised operating profit (A$m)

(6.0)

21.8

N/A

Normalised operating margin

-3.3%

10.0%

13.3%

Reported operating profit (A$m)

(279.2)

5.2

N/A

Reported operating margin

-151.8%

2.4%

N/A

Normalised PBT (A$m)

(9.6)

16.6

N/A

Reported PBT (A$m)

(259.0)

2.4

N/A

Normalised net income (A$m)

(7.6)

13.3

N/A

Reported net income (A$m)

(284.8)

(26.5)

N/A

Normalised basic EPS (A$)

(0.02)

0.04

N/A

Normalised diluted EPS (A$)

(0.02)

0.03

N/A

Reported basic EPS (A$)

(0.762)

(0.071)

-90.7%

Reported basic EPS – continuing operations (A$)

(0.696)

(0.026)

-96.3%

Net debt/(cash) (A$m)

20.4

42.8

109.6%

Source: EML Payments, Edison Investment Research

As we have previously written, higher base rates around the world have resulted in a substantial increase in interest income (which is treated as revenue). Interest income in FY24 was A$49.8m, up from A$25.3m in FY23. Continuing operations generated revenue growth of 18.1%, with 13.3% growth from higher interest rates and 4.8% growth from the underlying businesses. Gross margin increased by 4pp due to higher interest income. Underlying overheads increased 13.6% from A$103.3m in FY23 to A$117.3m in FY24. H224 overheads of A$56.2m were 8% lower than in H124, although did benefit from a A$2.6m reversal of a bad debt provision. The company closed the year with a net debt position of A$42.8m, which includes a cash balance of A$43.1m offset by a bank loan of A$58.93m, a loan to PCSIL of A$17.16m and the remaining A$9.45m loan note payable to the PFS vendors (A$19.05m was paid in June). This excludes leases totalling A$4.8m.

On 27 August, the company refinanced its debt. It executed new committed debt facilities totalling A$100m, comprising a A$70m two-year syndicated facility and a A$30m five-year bilateral facility. This replaces the A$80m committed facility maturing in March 2025. The debt was structured such that the facility limit would reduce to A$70m on disposal of Sentenial, which has now happened.

PCSIL in liquidation

We summarise below the performance of PCSIL in FY23 and FY24, all now reported in discontinued operations. We note that the results for FY24 only show the performance up to the date of entry into liquidation on 17 January.

Exhibit 2: PCSIL performance summary

A$m

FY23

FY24

Customer revenue

63.1

32.5

Interest revenue

7.2

13.7

Total revenue

70.3

46.2

Selling costs

(35.8)

(15.6)

Underlying gross profit

34.5

30.6

Net overheads

(34.1)

(22.5)

Underlying EBITDA

0.4

8.1

GDV

5,148

2,695

Revenue yield (bp)

137

171

Underlying gross margin

49.1%

66.2%

Source: EML Payments

To reflect the relationship between EML and PCSIL in liquidation, the company reported other income, which is made up of recharges it has made to PCSIL for various services. The table below summarises these – the asterisked numbers are included within EBITDA as they offset operating costs incurred by EML. The remainder we have included as one-off items at the operating profit level. We believe that the legal claims income from PFS Group vendors is the discount to the amount payable to the vendors agreed in April.

Exhibit 3: Other income breakdown

A$k

FY23

FY24

Management fee charges PCSIL

4,891*

2,723*

Intellectual property charges PCSIL

5,250

2,768

License and ancillary charges PCSIL

0

5,707*

Legal claims income from PFS Group vendors

0

13,953

Other

236*

244*

Total other income

10,377

25,395

Sum * included in EBITDA

5,127

8,674

Source: EML Payments.

Underlying EBITDA A$49m for continuing operations

The company provided a reconciliation between reported and underlying EBITDA:

Exhibit 4: EBITDA reconciliation

A$m

FY23

FY24

Reported EBITDA

8.6

38.1

Fraud costs

6.1

0.0

Regulatory remediation and class action costs

14.0

0.6

PCSIL separation and technology-related costs

0.0

6.7

Restructuring costs and strategy establishment

7.3

3.4

AABS 3 fair value uplift

0.7

0.2

Underlying EBITDA

36.7

49.0

Source: EML Payments

The level of one-off charges has reduced from the prior year and should be minimal going forward.

Divisional performance

Exhibit 5: Divisional performance, continuing operations

FY23

FY24

y-o-y

GDV

Gifting

A$bn

1.7

1.8

5%

GPR

A$bn

7.6

7.8

3%

Digital Payments

A$bn

115.1

136.8

19%

Revenue

Gifting

A$m

74.6

81.5

9%

GPR

A$m

87.5

111.5

27%

Digital Payments

A$m

21.7

24.2

12%

Yield

Gifting

4.46%

4.66%

0.19pp

GPR

1.15%

1.42%

0.28pp

Digital Payments

0.02%

0.02%

0.00pp

Gross profit

Gifting

A$m

60.5

64.2

6.3%

GPR

A$m

60.5

81.2

34.1%

Digital Payments

A$m

11.9

20.4

71.8%

Gross margin

Gifting

81.1%

78.8%

-2.3pp

GPR*

69.1%

72.8%

3.7pp

Digital Payments*

54.7%

84.2%

29.5pp

Source: EML Payments. Note: *Underlying gross margin in FY23, which excludes European fraud costs, was 70.0% for GPR and 82.9% for Digital Payments.

Gift & Incentive: Incentives up, small decline from malls

In FY24, the division saw 4.8% growth in GDV and 9.4% growth in revenue. Interest income more than doubled from A$4.7m in FY23 to A$9.8m in FY24. Customer revenue increased 2.7% y-o-y to A$71.7m. The company noted that it lost several accounts in H224, affecting GDV and revenue. Revenue from corporate incentives increased A$4.2m y-o-y (16%) while mall revenue declined A$2.3m (5%). Gross profit increased 6.3% y-o-y with gross margin declining 2.3pp to 78.8%, partly due to the higher proportion of lower-margin incentives business but also due to fraud-related costs of A$1.7m. Excluding these costs, the gross margin would have been 80.9%, in line with the prior year.

General Purpose Reloadable: Growth despite restrictions

Excluding PCSIL, GPR grew GDV by 2.6% and revenue by 27.3%. Until April, the UK business had regulatory restrictions in place that prevented it from signing up new customers. Customer revenue increased 6.6% to A$72.4m, with 15% growth from the human capital management sector and 23% growth from the government sector. Interest income doubled from A$19.6m in FY23 to A$39.1m in FY24.

Digital Payments: Sentenial sold

In FY24, the results of this business included Sentenial. Sentenial was sold to GoCardless on 3 September for an enterprise value of €32.75m/A$53.4m, with no downward adjustments to the sale price for key contract performance. There is an earn-out based on recurring revenue from new contracts signed from 1 February 2024 to 30 days after completion.

The division reported GDV growth of 19% y-o-y and revenue growth of 12%. This division has a much lower interest income contribution: A$0.8m in FY23 and FY24. Underlying gross profit increased 13% and the underlying gross margin increased 1.4pp to 84.2%.

Stripping out the Sentenial contribution (GDV A$123.4bn, revenue A$15.2m, gross profit A$13.5m), the remaining business grew GDV 22% while revenue declined 3%. Gross profit declined 1%, with the gross margin increasing by 1.1pp to 76.4%. The company noted that Sentenial generated an EBITDA loss of c A$2.8m, which implies overheads of A$16.3m.

Management changes

The group has undergone further management change during FY24 and post year-end. Ron Hynes was appointed managing director and CEO effective 30 June. Former interim CEO Kevin Murphy was appointed as a non-executive director (NED) effective 30 June. Also on 30 June, Anthony Hynes was appointed as an independent NED; he will chair a new growth and operational performance sub-committee.

On 19 August, Petrina Coventry was appointed to the board as an independent NED.

On 28 August, chairman Dr Luke Bertoli and NED Jim Pollock retired from the board and Anthony Hynes was appointed chairman.

Outlook and changes to forecasts

Management initiated underlying EBITDA guidance for FY25, excluding PCSIL and Sentenial, in the range of A$54–60m. We have revised our forecasts to reflect lower growth in GDV and revenue and higher overheads than previously forecast. We have also stripped out the Sentenial business now that the disposal has completed. Management had previously guided to underlying EBITDA margin growth of c 5pp per annum but now expects to update medium-term guidance at its AGM in November. Factoring in the proceeds from the disposal of Sentenial, the company moves to a pro forma net cash position of A$5m as at the end of FY24 and we forecast an increase to net cash of A$37.6m by the end of FY25.

Exhibit 6: Changes to forecasts

FY25e

Old

FY25e

New

Change

y-o-y

FY26e

New

y-o-y

Revenues

A$m

238.0

208.9

-12.2%

-3.9%

217.0

3.9%

Gross profit

A$m

173.9

159.2

-8.4%

-4.0%

165.3

3.8%

Gross margin

73.1%

76.2%

3.2%

-0.1%

76.2%

-0.1%

Underlying gross profit

A$m

173.9

159.2

-8.4%

-4.1%

165.3

3.8%

Underlying gross margin

73.1%

76.2%

3.2%

-0.2%

76.2%

-0.1%

EBITDA

A$m

62.5

54.8

-12.3%

43.9%

58.5

6.7%

EBITDA margin

26.3%

26.3%

0.0%

8.7%

27.0%

0.7%

Add back one-off costs

A$m

0.0

0.0

N/A

N/A

0.0

N/A

Underlying EBITDA

A$m

62.5

54.8

-12.3%

11.9%

58.5

6.7%

Underlying EBITDA margin

26.3%

26.3%

0.0%

3.7%

27.0%

0.7%

Normalised operating profit

A$m

44.8

38.7

-13.7%

77.2%

46.2

19.4%

Normalised operating margin

18.8%

18.5%

-0.3%

8.5%

21.3%

2.8%

Reported operating profit

A$m

32.3

29.2

-9.7%

458.0%

36.7

25.7%

Reported operating margin

13.6%

14.0%

0.4%

11.6%

16.9%

2.9%

Normalised PBT

A$m

41.4

35.0

-15.3%

110.6%

42.5

21.4%

Reported PBT

A$m

28.9

25.5

-11.6%

948.5%

33.0

29.4%

Normalised net income

A$m

33.1

28.0

-15.3%

110.6%

34.0

21.4%

Reported net income

A$m

23.1

20.4

-11.6%

-177.1%

26.4

29.4%

Normalised basic EPS

A$

0.088

0.075

-15.5%

110.3%

0.091

21.4%

Normalised diluted EPS

A$

0.086

0.072

-16.2%

110.3%

0.088

21.4%

Reported basic EPS

A$

0.062

0.054

-11.7%

-176.9%

0.070

29.4%

Reported basic EPS - continuing operations

A$

0.062

0.054

-11.7%

-312.0%

0.070

29.4%

Net debt/(cash)

A$m

(16.0)

(37.6)

135.7%

-188.0%

(67.4)

79.0%

GDV

A$bn

174.2

24.8

-85.7%

-83.0%

27.0

8.6%

Yield

bp

14

84

70

69

80

(4)

Source: Edison Investment Research

Exhibit 7: Changes to divisional forecast

Divisional data

FY25e

Old

FY25e

New

Change

y-o-y

FY26e

New

y-o-y

GDV

Gifting (A$bn)

2.0

1.9

-8%

6%

2.0

7%

GPR (A$bn)

9.5

8.2

-13%

5%

9.0

10%

Digital Payments (A$bn)

162.7

14.8

-91%

-89%

15.9

8%

Revenue

Gifting (A$m)

87.0

85.4

-2%

5%

86.8

2%

GPR (A$m)

121.9

113.5

-7%

2%

119.4

5%

Digital Payments (A$m)

29.0

9.9

-66%

-59%

10.7

8%

Yield

Gifting

4.30%

4.60%

0.30%

-0.06%

4.37%

-0.23%

GPR

1.29%

1.38%

0.09%

-0.04%

1.32%

-0.06%

Digital Payments

0.02%

0.07%

0.05%

0.05%

0.07%

0.00%

Gross profit

Gifting (A$m)

70.0

68.7

-2%

7%

69.9

2%

GPR (A$m)

79.2

82.8

5%

2%

87.2

5%

Digital Payments (A$m)

24.6

7.6

-69%

-63%

8.2

8%

Gross margin

Gifting

80.5%

80.5%

0.0%

1.7%

80.5%

0.0%

GPR

65.0%

73.0%

8.0%

0.2%

73.0%

0.0%

Digital Payments

84.8%

76.4%

-8.4%

-7.8%

76.4%

0.0%

Source: Edison Investment Research

Exhibit 8: Financial summary

A$'m

2019

2020

2021

2022

2023

2024

2025e

2026e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

97.2

121.0

192.2

232.4

183.9

217.3

208.9

217.0

Cost of Sales

(24.2)

(32.9)

(63.8)

(74.6)

(51.0)

(51.4)

(49.6)

(51.7)

Gross Profit

73.0

88.1

128.4

157.8

132.9

165.9

159.2

165.3

EBITDA

 

 

29.7

32.5

42.2

34.3

8.6

38.1

54.8

58.5

Normalised operating profit

 

 

25.6

22.4

31.6

18.4

(6.0)

21.8

38.7

46.2

Amortisation of acquired intangibles

(7.5)

(11.1)

(20.2)

(16.5)

(18.2)

(8.6)

(7.0)

(7.0)

Exceptionals

(3.0)

(13.6)

(11.2)

1.4

(253.5)

1.8

0.0

0.0

Share-based payments

(4.2)

(6.1)

(5.0)

(3.0)

(1.6)

(9.9)

(2.5)

(2.5)

Reported operating profit

10.9

(8.5)

(4.8)

0.3

(279.2)

5.2

29.2

36.7

Net Interest

(0.0)

(0.7)

(1.4)

(2.4)

(3.6)

(5.2)

(3.6)

(3.6)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(1.8)

1.3

(17.1)

1.8

23.9

2.4

0.0

0.0

Profit Before Tax (norm)

 

 

25.6

21.6

30.2

16.0

(9.6)

16.6

35.0

42.5

Profit Before Tax (reported)

 

 

9.0

(7.9)

(23.3)

(0.3)

(259.0)

2.4

25.5

33.0

Reported tax

(0.6)

0.7

(5.4)

(4.5)

(1.4)

(12.0)

(5.1)

(6.6)

Profit After Tax (norm)

20.5

17.2

24.1

12.8

(7.6)

13.3

28.0

34.0

Profit After Tax (reported)

8.5

(7.1)

(28.7)

(4.8)

(260.3)

(9.6)

20.4

26.4

Minority interests

(0.2)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

(24.5)

(16.9)

0.0

0.0

Net income (normalised)

20.3

17.2

24.1

12.8

(7.6)

13.3

28.0

34.0

Net income (reported)

8.3

(7.1)

(28.7)

(4.8)

(284.8)

(26.5)

20.4

26.4

Basic average number of shares outstanding (m)

249

304

360

371

374

375

375

375

EPS – basic normalised (A$)

 

 

0.081

0.056

0.067

0.035

(0.020)

0.036

0.075

0.091

EPS – normalised fully diluted (c)

 

 

7.812

5.489

6.579

3.398

(2.046)

3.429

7.212

8.759

EPS – basic reported (A$)

 

 

0.033

(0.023)

(0.080)

(0.013)

(0.762)

(0.071)

0.054

0.070

Dividend (A$)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

36.9

24.4

58.9

20.9

(20.9)

18.2

(3.9)

3.9

Gross Margin (%)

75.1

72.8

66.8

67.9

72.3

76.3

76.2

76.2

EBITDA Margin (%)

30.6

26.9

21.9

14.8

4.7

17.5

26.3

27.0

Normalised Operating Margin

26.4

18.5

16.4

7.9

-3.3

10.0

18.5

21.3

BALANCE SHEET

Fixed Assets

 

 

162.9

872.1

685.3

827.3

581.3

651.4

632.0

657.4

Intangible Assets

104.6

371.7

350.1

448.5

192.5

163.5

98.1

90.4

Tangible Assets

5.4

14.6

11.2

12.7

10.6

8.2

9.5

11.0

Investments & other

53.0

485.8

323.9

366.1

378.3

479.7

524.4

556.0

Current Assets

 

 

313.8

1,008.6

1,603.5

1,855.1

2,413.2

1,832.5

1,997.6

2,199.3

Stocks

18.2

22.3

16.4

21.5

27.5

19.8

20.9

21.6

Debtors

14.4

21.7

22.0

35.8

38.9

34.2

33.0

34.2

Cash & cash equivalents

33.1

118.4

141.2

73.7

71.4

43.1

114.0

143.8

Other

248.2

846.2

1,424.0

1,724.1

2,275.5

1,735.5

1,829.7

1,999.8

Current Liabilities

 

 

(299.0)

(1,357.8)

(1,792.8)

(2,100.1)

(2,709.9)

(2,297.1)

(2,418.8)

(2,615.8)

Creditors

(33.9)

(47.5)

(62.9)

(65.7)

(82.3)

(57.1)

(48.1)

(49.5)

Tax and social security

(0.8)

(2.6)

(6.0)

(2.8)

(3.1)

(0.3)

(0.3)

(0.3)

Short term borrowings

(15.0)

0.0

(1.4)

(1.8)

(23.0)

(85.8)

(76.4)

(76.4)

Other

(249.4)

(1,307.7)

(1,722.5)

(2,029.8)

(2,601.5)

(2,153.9)

(2,294.1)

(2,489.7)

Long Term Liabilities

 

 

(33.5)

(82.6)

(81.1)

(145.2)

(110.1)

(27.8)

(28.9)

(30.0)

Long term borrowings

0.0

(35.8)

(36.9)

(81.6)

(68.8)

0.0

0.0

0.0

Other long term liabilities

(33.5)

(46.8)

(44.2)

(63.6)

(41.3)

(27.8)

(28.9)

(30.0)

Net Assets

 

 

144.2

440.2

414.9

437.1

174.6

159.0

181.9

210.8

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

144.2

440.2

414.9

437.1

174.6

159.0

181.9

210.8

CASH FLOW

Op Cash Flow before WC and tax

28.4

31.2

41.2

33.3

8.9

38.1

54.8

58.5

Working capital

2.0

3.6

31.7

(68.4)

2.5

(10.5)

(15.7)

(6.5)

Exceptional & other

(0.7)

(12.7)

(17.3)

0.4

(8.8)

3.7

8.3

0.0

Tax

(0.6)

0.7

(5.4)

(4.5)

(1.4)

(12.0)

(5.1)

(6.6)

Net operating cash flow

 

 

29.2

22.8

50.2

(39.1)

1.3

19.3

42.3

45.3

Capex

(5.8)

(11.0)

(12.6)

(14.1)

(11.7)

(9.2)

(9.6)

(10.1)

Acquisitions/disposals

(44.0)

(142.5)

(3.5)

(57.1)

10.9

(21.2)

53.2

0.0

Net interest

(0.0)

(0.7)

(1.4)

(2.4)

(3.6)

(5.2)

(3.6)

(3.6)

Equity financing

0.4

240.8

0.6

0.0

0.0

0.0

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(0.4)

(7.0)

(11.0)

(1.9)

(2.5)

(5.6)

(1.9)

(1.9)

Net Cash Flow

(20.6)

102.3

22.2

(114.6)

(5.7)

(22.0)

80.4

29.7

Opening net debt/(cash)

 

 

(39.0)

(18.1)

(82.5)

(103.0)

9.7

20.4

42.8

(37.6)

FX

(0.3)

(2.0)

0.6

(1.1)

3.4

(0.2)

0.0

0.0

Other non-cash movements

0.0

(35.8)

(2.4)

3.0

(8.4)

(0.2)

0.0

0.0

Closing net debt/(cash)

 

 

(18.1)

(82.5)

(103.0)

9.7

20.4

42.8

(37.6)

(67.4)

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 2024 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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 2024 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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