Last close As at 05/08/2026
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▲ 0.01 (1.54%)
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AUD127m
Research: TMT
EML Payments’ H123 results reflected the changing mix of revenue (lower establishment fees and breakage, higher interest income), the effect of the ongoing remediation of regulatory issues in the European and UK PFS businesses and the restructuring of the group. With the Irish regulator raising additional concerns post results and applying a more stringent growth cap to EML’s Irish subsidiary, PFS Card Services Ireland Limited (PCSIL), the board has initiated a strategic review of the business.
EML Payments |
Considering its options |
H123 results |
Software and comp services |
14 April 2023 |
Share price performance
Business description
Next events
Analyst
EML Payments is a research client of Edison Investment Research Limited |
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EML Payments’ H123 results reflected the changing mix of revenue (lower establishment fees and breakage, higher interest income), the effect of the ongoing remediation of regulatory issues in the European and UK PFS businesses and the restructuring of the group. With the Irish regulator raising additional concerns post results and applying a more stringent growth cap to EML’s Irish subsidiary, PFS Card Services Ireland Limited (PCSIL), the board has initiated a strategic review of the business.
Year end |
Revenue |
PBT* |
NPATA** (A$m) |
Diluted EPS* (c) |
DPS |
P/E |
EV/EBITDA*** |
06/21 |
192.2 |
30.2 |
21.0 |
6.6 |
0 |
8.9 |
4.3 |
06/22 |
232.4 |
16.0 |
19.3 |
3.4 |
0 |
17.2 |
4.5 |
06/23e |
240.3 |
(23.1) |
(22.0) |
(4.9) |
0 |
N/A |
8.7 |
06/24e |
253.2 |
2.0 |
3.0 |
0.4 |
0 |
135.7 |
7.9 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **NPATA = net profit after tax, excluding acquisition-related costs. ***Based on underlying EBITDA.
H123 results reflect focus on compliance
For H123, EML reported gross debit volume (GDV) growth of 55% y-o-y (7% excluding Sentenial, which was acquired midway through H122), revenue growth of 2% (-0.6% organic) and an underlying EBITDA decline of 50%. Lower breakage and non-recurring revenues in Gifting and lower establishment fees in General Purpose Reloadable (GPR) due to the regulatory remediation programme were partially offset by higher interest income on float. Overheads increased on an underlying basis to support the increased focus on compliance and one-off costs of $21.6m included regulatory remediation, litigation, fraud losses and restructuring.
Regulatory challenges; strategic review launched
Post results, the Central Bank of Ireland (CBI) wrote to EML expressing dis-satisfaction with the remediation programme and raising the prospect of a more stringent growth cap for PCSIL. This growth cap has since been applied, effective 31 March 2023 to 31 March 2024. A board sub-committee has been formed, chaired by new non-executive director, Peter Lang, to oversee the remediation programme. A strategic review of the business has also been launched. EML maintains guidance for underlying EBITDA of A$26–34m in FY23. We have revised our forecasts to reflect H123 results and the new growth cap, which combined reduce our FY24 revenue forecast by 6.7% and EBITDA by 26.5%.
Valuation: Reflects increased uncertainty
EML is trading at a substantial discount to global payment processor and prepaid card peers on an EV/sales and EV/underlying EBITDA basis. Evidence of positive progress with the Irish and UK regulators as well as the outcome of the strategic review could trigger upside from this point.
Review of H123 results
We summarise EML’s H123 performance in Exhibit 1. Group revenue grew 2% y-o-y, group underlying gross profit increased 5% y-o-y and underlying EBITDA declined from A$26.9m in H122 to A$13.4m in H123. In Exhibit 2, we summarise the key adjustments to reach EML’s underlying EBITDA and NPATA measures.
Exhibit 1: Half-yearly performance
H123 |
H122 |
y-o-y |
|
GDV (A$bn) |
|||
Gifting |
1.1 |
0.9 |
16% |
GPR |
6.5 |
6.3 |
4% |
Digital Payments |
41.8 |
24.4 |
71% |
Group GDV |
49.4 |
31.6 |
55% |
Yield (bp) |
|||
Gifting |
321 |
408 |
-87 |
GPR |
110 |
111 |
-1 |
Digital Payments |
3 |
3 |
0 |
Group yield |
24 |
36 |
|
Revenue (A$m) |
|||
Gifting |
34.0 |
37.1 |
-8% |
GPR |
72.1 |
69.6 |
4% |
Digital Payments |
10.5 |
7.7 |
37% |
Group revenue |
116.6 |
114.4 |
2% |
Gross profit |
70.4 |
75.4 |
-7% |
Gross margin |
60.3% |
65.9% |
|
Underlying gross profit* |
78.9 |
75.4 |
5% |
Underlying gross margin |
67.6% |
65.9% |
|
EBITDA |
(8.2) |
14.2 |
N/A |
Underlying EBITDA |
13.4 |
26.9 |
-50% |
Source: EML Payments. Note: *Adjusted for fraud losses of A$8.5m.
Exhibit 2: Reconciliations from reported to underlying profit measures
A$m |
H123 |
H122 |
H123 |
H122 |
|
EBITDA |
(8.232) |
14.203 |
NPATA |
(15.992) |
3.961 |
Regulation remediation & class action costs |
8.502 |
12.659 |
7.102 |
9.101 |
|
Fraud losses |
8.476 |
0.000 |
6.357 |
0.000 |
|
Restructuring costs |
4.627 |
0.000 |
3.239 |
0.000 |
|
Underlying EBITDA |
13.373 |
26.862 |
Underlying NPATA |
0.706 |
13.062 |
Source: EML Payments
The company impaired goodwill by a total of A$121.4m during H123, split as A$86.2m for PFS and A$35.1m for Sentenial. EML also reduced the estimated contingent consideration payable for Sentenial from A$28.9m at the end of FY22 to A$10.7m at the end of H123 resulting in a one-off credit of A$19.3m at the net finance cost level. An earn-out of up to €40m is payable based on revenue achieved by Sentenial’s Nuapay business in CY23. The maximum pay-out requires CY23 revenue of least €30m and the earn-out is structured on a sliding scale to reward growth from the €3m base level at acquisition. As the Sentenial deal took longer to close than expected, delaying the investment by EML of sales and marketing resource, the likelihood of achieving the maximum pay-out is low.
EML closed H123 with cash of A$79.2m and net debt of A$6.8m (excluding leases). During H123, the company received A$10.9m in cash for the sale of its stake in Interchecks.
Divisional performance
Gifting: Incentives growth outpaced mall card growth
The Gifting division saw 16% growth in GDV year-on-year, with incentives growing at a faster rate than malls (31% versus 7%). An employee benefits programme in Ireland that leveraged the Small Benefits Scheme was a key contributor to growth. The division reported less breakage this year than last year as the effects of COVID-19 related mall closures have been worked through. The division reclassified A$2.2m of H122 revenue from breakage to non-recurring revenue to reflect the one-off nature of the work. Yield declined due to lower breakage and a higher proportion of incentives cards in the mix. Interest income increased from A$0.1m in H122 to A$1.1m in H123, reflecting rises in interest rates globally. Gross margin was materially in line with the prior year.
GPR: Interest income increased materially
GPR GDV increased 4% y-o-y, despite the effect of regulatory remediation in the PFS business, which reduced the ability to launch new programmes. Salary packaging volumes in Australia were up 8% y-o-y. Yield was essentially flat year-on-year, with establishment income down 27% y-o-y but interest income increasing significantly from A$2.2m in H122 to A$8.0m in H123. Gross margin was flat year-on-year at 56%; excluding A$2.4m in one-off fraud costs underlying gross margin was 59%.
Digital Payments (DP): Sentenial fraud weighed on gross margin
DP GDV increased 71% y-o-y reflecting a full six-month contribution from Sentenial versus three months in H122. Sentenial contributed GDV of A$36.5bn, of which c A$0.7bn (+19% y-o-y pro-forma) came from Nuapay’s open banking service. The original DP business grew GDV 6% y-o-y. Sentenial contributed revenue of A$5.6m in the period versus A$2.7m a year ago. Yield was flat year-on-year at 3bp. The previously disclosed fraud in the Sentenial business cost A$6.1m at the gross profit level, bringing the gross margin down to 28.0% compared to 81.5% in H122. Excluding this loss, the underlying gross margin was 89%.
Board changes
In early February, the company confirmed that it was refreshing the board, with three directors (David Liddy, Melanie Wilson and Tony Adcock) resigning on or before the 2023 AGM. On 22 February, the company announced it had appointed three new independent non-executive directors who will stand for election at the 2023 AGM, with the three previous directors stepping down with immediate effect. The new directors are:
■
Dr Luke Bortoli: previously he was CFO of Afterpay (2018–21), held senior roles at Aristocrat (2015–18), and prior to that was an investment banker at UBS. The board has appointed Dr Bortoli as chairman.
■
Peter Lang: worked at McMillan Shakespeare in various executive roles.
■
Connor Haley: nominee director from the company’s 8.14% shareholder, Alta Fox Capital.
Regulatory update; strategic review launched
Post H123 results on 22 February, PCSIL, EML’s Irish subsidiary, received a letter from the CBI. On 24 February the company disclosed that the CBI considers that PCSIL has made limited remediation progress to date with significant and ongoing deficiencies remaining in PCSIL’s AML/CFT control framework. It is also not satisfied with PCSIL’s remediation plan and timetable for completion.
EML had previously expected to complete the remediation programme and third-party assessment by the end of CY23, but now considers that this timeframe is at risk and is subject to further engagement by PCSIL with the CBI.
The CBI noted that it was considering applying a new growth cap to payment volumes for the period 31 March 2023 to 30 March 2024, allowing no growth from the level processed in the period January to December 2022. This compares to the existing 10% cap applied to the 12-month period to 8 December 2023. The CBI gave PCSIL the opportunity to provide it with submissions by 10 March for its consideration. On 31 March, EML announced that the CBI had imposed the 0% growth cap from that date and also confirmed that there was no change to the FY23 guidance given on 22 February.
The growth cap only applies to the European general purpose reloadable programmes covered by PCSIL’s e-money institution licence, which made up c 30% of group revenue for H123. The company took an impairment charge for PFS in H123 but may need to increase this now that the more stringent growth cap has been applied.
A board sub-committee has been set up to oversee the issue, headed by Peter Lang. The company has also launched a strategic review of the business.
Outlook
At H123 results, the company revised its FY23 guidance slightly, reducing the revenue range from A$240–260m to A$235–245m but also reducing the overheads range from A$135–145m to A$133–140m resulting in unchanged underlying EBITDA guidance of A$26–34m. It also guided to underlying NPATA of a loss of A$4m to a profit of A$4m.
The company noted that interest income was A$2.5m in January and rates have risen again since then. Just using the January level for the rest of the year would result in interest income of A$24.1m for FY23, compared to A$5.1m for FY22.
We have revised our forecasts to reflect H123 results and to factor in slower growth for GPR in FY24 due to the more stringent growth cap.
Exhibit 3: Changes to forecasts
FY23e Old |
FY23e New |
Change |
y-o-y |
FY24e Old |
FY24e New |
Change |
y-o-y |
||
Revenues |
A$m |
240.9 |
240.3 |
-0.3% |
3.4% |
271.3 |
253.2 |
-6.7% |
5.4% |
Gross profit |
A$m |
161.5 |
154.1 |
-4.6% |
-2.3% |
183.8 |
172.4 |
-6.2% |
11.9% |
Gross margin |
67.0% |
64.1% |
-2.9% |
-3.8% |
67.8% |
68.1% |
0.3% |
4.0% |
|
Underlying gross profit |
A$m |
161.5 |
162.4 |
0.5% |
2.9% |
183.8 |
172.4 |
-6.2% |
6.2% |
Underlying gross margin |
67.0% |
67.6% |
0.5% |
-0.3% |
67.8% |
68.1% |
0.3% |
0.5% |
|
EBITDA |
A$m |
10.5 |
(0.2) |
-102.0% |
-100.6% |
39.2 |
28.8 |
-26.5% |
-13850.6% |
EBITDA margin |
4.4% |
-0.1% |
-4.4% |
-14.8% |
14.4% |
11.4% |
-3.1% |
11.5% |
|
Add back one-off costs |
A$m |
16.0 |
26.6 |
66.3% |
N/A |
0.0 |
0.0 |
N/A |
N/A |
Underlying EBITDA |
A$m |
26.5 |
26.4 |
-0.4% |
-48.4% |
39.2 |
28.8 |
-26.5% |
9.0% |
Underlying EBITDA margin |
11.0% |
11.0% |
0.0% |
-11.0% |
14.4% |
11.4% |
-3.1% |
0.4% |
|
Normalised operating profit |
A$m |
7.1 |
(19.4) |
-374.1% |
-205.3% |
16.1 |
5.8 |
-64.1% |
-129.9% |
Normalised operating margin |
2.9% |
-8.1% |
-11.0% |
-16.0% |
5.9% |
2.3% |
-3.6% |
10.3% |
|
Reported operating profit |
A$m |
(31.4) |
(158.9) |
405.4% |
N/A |
(6.4) |
(13.7) |
113.9% |
-91.4% |
Reported operating margin |
-13.0% |
-66.1% |
-53.1% |
-66.2% |
-2.4% |
-5.4% |
-3.1% |
60.7% |
|
Normalised PBT |
A$m |
3.3 |
(23.1) |
-794.3% |
-244.4% |
12.4 |
2.0 |
-83.4% |
-108.9% |
Reported PBT |
A$m |
(35.2) |
(143.9) |
309.1% |
42224.5% |
(10.1) |
(17.5) |
72.0% |
-87.9% |
Normalised net income |
A$m |
2.7 |
(18.5) |
-794.3% |
-244.4% |
9.9 |
1.6 |
-83.4% |
-108.9% |
NPATA |
A$m |
(8.1) |
(22.0) |
170.6% |
-213.8% |
11.9 |
3.0 |
-74.4% |
-113.8% |
Add back one-off costs |
A$m |
12.8 |
20.7 |
0.0 |
0.0 |
||||
Underlying NPATA |
A$m |
4.7 |
(1.3) |
-128.4% |
-104.1% |
11.9 |
3.0 |
-74.4% |
-329.3% |
Reported net income |
A$m |
(28.1) |
(144.3) |
412.9% |
2906.3% |
(8.1) |
(14.0) |
72.0% |
-90.3% |
Normalised basic EPS |
A$ |
0.01 |
(0.05) |
-793.8% |
-243.2% |
0.03 |
0.00 |
-83.5% |
-108.9% |
Normalised diluted EPS |
A$ |
0.01 |
(0.05) |
-804.5% |
-245.5% |
0.03 |
0.00 |
-83.5% |
-108.7% |
Reported basic EPS |
A$ |
(0.08) |
(0.39) |
412.6% |
2882.3% |
(0.02) |
(0.04) |
71.8% |
-90.3% |
NPATA/share |
A$ |
(0.02) |
(0.06) |
170.4% |
-212.9% |
0.03 |
0.01 |
-74.5% |
-113.8% |
Dividend per share |
A$ |
0.00 |
0.00 |
N/A |
N/A |
0.00 |
0.00 |
N/A |
N/A |
Net debt/(cash) |
A$m |
(4.5) |
(1.7) |
-61.7% |
-117.6% |
16.8 |
18.8 |
12.3% |
-1203.3% |
GDV |
A$bn |
100.5 |
99.3 |
-1.2% |
23.7% |
107.2 |
102.0 |
-4.9% |
2.7% |
Yield |
bp |
24 |
24 |
0 |
-5 |
25 |
25 |
0 |
1 |
Divisional data |
|||||||||
GDV |
|||||||||
G&I |
A$bn |
1.4 |
1.5 |
3% |
11% |
1.6 |
1.6 |
3% |
10% |
GPR |
A$bn |
13.1 |
13.3 |
2% |
8% |
14.4 |
13.7 |
-5% |
3% |
Digital Payments |
A$bn |
85.9 |
84.5 |
-2% |
27% |
91.2 |
86.6 |
-5% |
3% |
Revenue |
|||||||||
G&I |
A$m |
74.7 |
68.2 |
-9% |
0% |
82.2 |
77.5 |
-6% |
14% |
GPR |
A$m |
142.7 |
150.8 |
6% |
2% |
158.5 |
151.2 |
-5% |
0% |
Digital Payments |
A$m |
23.3 |
21.0 |
-10% |
27% |
30.4 |
24.3 |
-20% |
15% |
Gross profit |
|||||||||
G&I |
A$m |
59.0 |
54.2 |
-8% |
64.9 |
61.6 |
-5% |
||
GPR |
A$m |
82.8 |
87.5 |
6% |
93.5 |
90.0 |
-4% |
||
Digital Payments |
A$m |
19.5 |
12.2 |
-37% |
25.2 |
20.6 |
-18% |
||
Gross margin |
|||||||||
G&I |
79.0% |
79.5% |
79.0% |
79.5% |
|||||
GPR |
58.0% |
58.0% |
59.0% |
59.5% |
|||||
Digital Payments |
83.7% |
57.9% |
82.8% |
84.9% |
Source: Edison Investment Research
Exhibit 4: Financial summary
A$m |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
||
30-June |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||||
Revenue |
|
|
58.0 |
71.0 |
97.2 |
121.0 |
192.2 |
232.4 |
240.3 |
253.2 |
Cost of Sales |
(13.7) |
(17.7) |
(24.2) |
(32.9) |
(63.8) |
(74.6) |
(86.2) |
(80.8) |
||
Gross Profit |
44.2 |
53.3 |
73.0 |
88.1 |
128.4 |
157.8 |
154.1 |
172.4 |
||
EBITDA |
|
|
14.5 |
21.0 |
29.7 |
32.5 |
42.2 |
34.3 |
(0.2) |
28.8 |
Normalised operating profit |
|
|
11.9 |
18.1 |
25.6 |
22.4 |
31.6 |
18.4 |
(19.4) |
5.8 |
Amortisation of acquired intangibles |
(8.9) |
(7.2) |
(7.5) |
(11.1) |
(20.2) |
(16.5) |
(17.0) |
(17.0) |
||
Exceptionals |
0.2 |
(0.3) |
(3.0) |
(13.6) |
(11.2) |
1.4 |
(120.0) |
0.0 |
||
Share-based payments |
(5.3) |
(5.0) |
(4.2) |
(6.1) |
(5.0) |
(3.0) |
(2.5) |
(2.5) |
||
Reported operating profit |
(2.1) |
5.6 |
10.9 |
(8.5) |
(4.8) |
0.3 |
(158.9) |
(13.7) |
||
Net Interest |
0.0 |
(0.1) |
(0.0) |
(0.7) |
(1.4) |
(2.4) |
(3.7) |
(3.7) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
(0.5) |
(1.8) |
1.3 |
(17.1) |
1.8 |
18.7 |
0.0 |
||
Profit Before Tax (norm) |
|
|
11.9 |
17.9 |
25.6 |
21.6 |
30.2 |
16.0 |
(23.1) |
2.0 |
Profit Before Tax (reported) |
|
|
(2.1) |
5.0 |
9.0 |
(7.9) |
(23.3) |
(0.3) |
(143.9) |
(17.5) |
Reported tax |
2.1 |
(2.8) |
(0.6) |
0.7 |
(5.4) |
(4.5) |
(0.4) |
3.5 |
||
Profit After Tax (norm) |
8.9 |
14.4 |
20.5 |
17.2 |
24.1 |
12.8 |
(18.5) |
1.6 |
||
Profit After Tax (reported) |
0.0 |
2.2 |
8.5 |
(7.1) |
(28.7) |
(4.8) |
(144.3) |
(14.0) |
||
Minority interests |
0.0 |
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 |
0.0 |
||
Net income (normalised) |
8.9 |
14.4 |
20.3 |
17.2 |
24.1 |
12.8 |
(18.5) |
1.6 |
||
Net income (reported) |
0.0 |
2.2 |
8.3 |
(7.1) |
(28.7) |
(4.8) |
(144.3) |
(14.0) |
||
Basic ave. number of shares outstanding (m) |
245 |
246 |
249 |
304 |
360 |
371 |
374 |
374 |
||
EPS - basic normalised (A$) |
|
|
0.036 |
0.058 |
0.081 |
0.056 |
0.067 |
0.035 |
(0.049) |
0.004 |
EPS - normalised fully diluted (c) |
|
|
3.559 |
5.674 |
7.812 |
5.489 |
6.579 |
3.398 |
(4.942) |
0.431 |
EPS - basic reported (A$) |
|
|
0.000 |
0.009 |
0.033 |
(0.023) |
(0.080) |
(0.013) |
(0.386) |
(0.037) |
Dividend (A$) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
148.6 |
22.5 |
36.9 |
24.4 |
58.9 |
20.9 |
3.4 |
5.4 |
||
Gross Margin (%) |
76.3 |
75.1 |
75.1 |
72.8 |
66.8 |
67.9 |
64.1 |
68.1 |
||
EBITDA Margin (%) |
25.1 |
29.6 |
30.6 |
26.9 |
21.9 |
14.8 |
-0.1 |
11.4 |
||
Normalised Operating Margin |
20.5 |
25.4 |
26.4 |
18.5 |
16.4 |
7.9 |
-8.1 |
2.3 |
||
BALANCE SHEET |
||||||||||
Fixed Assets |
|
|
90.6 |
108.0 |
162.9 |
872.1 |
685.3 |
827.3 |
839.7 |
850.0 |
Intangible Assets |
60.1 |
65.8 |
104.6 |
371.7 |
350.1 |
448.5 |
322.2 |
307.0 |
||
Tangible Assets |
2.8 |
3.5 |
5.4 |
14.6 |
11.2 |
12.7 |
10.2 |
12.5 |
||
Investments & other |
27.6 |
38.7 |
53.0 |
485.8 |
323.9 |
366.1 |
507.3 |
530.4 |
||
Current Assets |
|
|
96.9 |
131.6 |
313.8 |
1,008.6 |
1,603.5 |
1,855.1 |
1,980.4 |
2,030.0 |
Stocks |
10.3 |
12.6 |
18.2 |
22.3 |
16.4 |
21.5 |
13.2 |
14.1 |
||
Debtors |
6.3 |
8.9 |
14.4 |
21.7 |
22.0 |
35.8 |
33.0 |
34.8 |
||
Cash & cash equivalents |
39.9 |
39.0 |
33.1 |
118.4 |
141.2 |
73.7 |
85.1 |
44.6 |
||
Other |
40.4 |
71.1 |
248.2 |
846.2 |
1,424.0 |
1,724.1 |
1,849.1 |
1,936.5 |
||
Current Liabilities |
|
|
(62.8) |
(90.5) |
(299.0) |
(1,357.8) |
(1,792.8) |
(2,100.1) |
(2,391.3) |
(2,490.3) |
Creditors |
(23.8) |
(21.2) |
(33.9) |
(47.5) |
(62.9) |
(65.7) |
(78.4) |
(73.1) |
||
Tax and social security |
(0.0) |
0.0 |
(0.8) |
(2.6) |
(6.0) |
(2.8) |
(2.8) |
(2.8) |
||
Short term borrowings |
0.0 |
0.0 |
(15.0) |
0.0 |
(1.4) |
(1.8) |
(1.8) |
(1.8) |
||
Other |
(39.0) |
(69.3) |
(249.4) |
(1,307.7) |
(1,722.5) |
(2,029.8) |
(2,308.4) |
(2,412.6) |
||
Long Term Liabilities |
|
|
(4.2) |
(19.3) |
(33.5) |
(82.6) |
(81.1) |
(145.2) |
(125.2) |
(97.6) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
(35.8) |
(36.9) |
(81.6) |
(81.6) |
(61.6) |
||
Other long term liabilities |
(4.2) |
(19.3) |
(33.5) |
(46.8) |
(44.2) |
(63.6) |
(43.5) |
(35.9) |
||
Net Assets |
|
|
120.6 |
129.8 |
144.2 |
440.2 |
414.9 |
437.1 |
303.6 |
292.1 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
120.6 |
129.8 |
144.2 |
440.2 |
414.9 |
437.1 |
303.6 |
292.1 |
CASH FLOW |
||||||||||
Op Cash Flow before WC and tax |
13.1 |
19.7 |
28.4 |
31.2 |
41.2 |
33.3 |
(1.2) |
27.8 |
||
Working capital |
4.9 |
(9.2) |
2.0 |
3.6 |
31.7 |
(68.4) |
26.0 |
(14.3) |
||
Exceptional & other |
(0.8) |
(1.2) |
(0.7) |
(12.7) |
(17.3) |
0.4 |
1.0 |
0.0 |
||
Tax |
2.1 |
(2.8) |
(0.6) |
0.7 |
(5.4) |
(4.5) |
(0.4) |
3.5 |
||
Net operating cash flow |
|
|
19.3 |
6.5 |
29.2 |
22.8 |
50.2 |
(39.2) |
25.3 |
17.0 |
Capex |
(2.9) |
(5.3) |
(5.8) |
(11.0) |
(12.6) |
(14.1) |
(18.9) |
(21.2) |
||
Acquisitions/disposals |
0.0 |
(0.7) |
(44.0) |
(142.5) |
(3.5) |
(57.1) |
10.6 |
(10.7) |
||
Net interest |
0.0 |
(0.1) |
(0.0) |
(0.7) |
(1.4) |
(2.4) |
(3.7) |
(3.7) |
||
Equity financing |
0.2 |
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 |
0.0 |
||
Other |
(3.6) |
(0.6) |
(0.4) |
(7.0) |
(11.0) |
(1.9) |
(1.9) |
(1.9) |
||
Net Cash Flow |
13.0 |
(0.2) |
(20.6) |
102.3 |
22.2 |
(114.6) |
11.4 |
(20.5) |
||
Opening net debt/(cash) |
|
|
(26.9) |
(39.9) |
(39.0) |
(18.1) |
(82.5) |
(103.0) |
9.7 |
(1.7) |
FX |
(0.0) |
(0.6) |
(0.3) |
(2.0) |
0.6 |
(1.1) |
0.0 |
0.0 |
||
Other non-cash movements |
0.0 |
0.0 |
0.0 |
(35.8) |
(2.4) |
3.0 |
(0.0) |
0.0 |
||
Closing net debt/(cash) |
|
|
(39.9) |
(39.0) |
(18.1) |
(82.5) |
(103.0) |
9.7 |
(1.7) |
18.8 |
Source: EML Payments, Edison Investment Research
|
|
Thrace Plastics’ FY22e core product PBT (excluding the c €5m pandemic-related personal protective equipment (PPE) boost and one-off financial income of €4.6m) should be well ahead of pre-COVID levels. Future growth from the more sustainable core products should be driven by the 2020–22 €102m reinvestment of the temporary boost to cash flow during that period from the high-margin PPE sales. While Thrace faces challenges in FY23 in terms of demand and costs, we expect to see accelerating growth and positive cash flows as the company moves into FY24. We value Thrace at €8.59/share using peer-based EV/EBITDA multiples, which implies substantial upside potential, as does our DCF valuation of €7.86/share.