EML Payments — Looking to a brighter future

EML Payments (ASX: EML)

Last close As at 24/05/2024

AUD1.00

0.03 (2.58%)

Market capitalisation

AUD374m

More on this equity

Research: TMT

EML Payments — Looking to a brighter future

EML Payments reported good growth in revenue and underlying EBITDA in H124, mainly due to the benefit of higher interest income. Management’s focus has been on the underperforming PCSIL General Purpose Reloadable (GPR) business, now in liquidation, resulting in the cost cutting programme shifting to H224. With that obstacle removed, management can now shift its sights to growing the remaining Gifting and GPR businesses and rightsizing the cost base.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

EML Payments

Looking to a brighter future

H124 results

Software and comp services

5 March 2024

Price

A$0.945

Market cap

A$354m

€0.60/A$

Net debt (A$m) at end H124

13.7

Shares in issue

374.9m

Free float

93%

Code

EML

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

12.1

6.9

101.1

Rel (local)

11.2

(1.9)

88.2

52-week high/low

A$1.26

A$0.41

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

FY24 results

August

Analyst

Katherine Thompson

+44 (0)20 3077 5700

EML Payments is a research client of Edison Investment Research Limited

EML Payments reported good growth in revenue and underlying EBITDA in H124, mainly due to the benefit of higher interest income. Management’s focus has been on the underperforming PCSIL General Purpose Reloadable (GPR) business, now in liquidation, resulting in the cost cutting programme shifting to H224. With that obstacle removed, management can now shift its sights to growing the remaining Gifting and GPR businesses and rightsizing the cost base.

Year end

Revenue
(A$m)

PBT*
(A$m)

NPATA** (A$m)

Diluted EPS* (c)

DPS
(c)

P/E
(x)

EV/EBITDA***
(x)

06/22

232.4

16.0

19.3

3.4

0

27.8

7.3

06/23

254.2

(22.8)

(27.0)

(4.9)

0

N/A

10.1

06/24e

262.1

27.5

26.6

5.7

0

16.5

6.7

06/25e

238.0

39.8

31.8

8.3

0

11.4

6.0

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.

Interest income boosts revenue and profitability

EML reported strong revenue growth in H124 (+30% y-o-y) as it benefited from higher interest rates on float. Interest income nearly quadrupled year-on-year to make up 23% of revenue. Gifting revenue increased 15% y-o-y, GPR 38% and Digital Payments 17%. Underlying EBITDA increased 119% y-o-y to A$29.3m (19.5% margin), mainly due to the higher interest income contribution. Underlying overheads increased year-on-year, reflecting investment in multiple areas of the business but management is focused on reducing costs in H224 and FY25. The group generated cash of A$7.3m in H124 to end the period with net debt excluding leases of A$13.7m.

Making good progress with strategic review

With PFS Card Services Ireland Limited (PCSIL) now in liquidation, management is focused on separating PFS Limited (UK) from PCSIL and working with the UK regulator to remove the growth cap. There has been interest from potential bidders for Sentenial and management is working through this process. For the remaining business, management is focused on building the sales pipeline, retaining staff and investing in technology to drive growth and profitability. We have revised our forecasts to reflect the H124 performance. Our underlying EBITDA forecast for FY24 increases by 2.2% to A$55.7m and for FY25 by 4.7% to A$62.5m.

Valuation: Operational performance now the key

Since the liquidation announcement on 17 January the stock has gained 26% but continues to trade at a material discount to global payment processor and prepaid card peers on an EV/sales and EV/underlying EBITDA basis. Evidence of positive progress with the UK regulator and growth in the remaining business will be key to reducing this discount, with the potential sale of Sentenial another possible trigger for upside.

Review of H124 results

Exhibit 1 summarises EML Payment’s performance in H124. Revenue increased 30% y-o-y and gross profit 58%, mainly due to the benefit of higher interest rates on float (group interest income was A$34.7m in H124 versus A$9.0m in H123). Underlying EBITDA increased 119% y-o-y to a profit of A$29.3m before one-off costs of A$1.2m for remediation and litigation and A$2.6m for restructuring. The company also took a A$9.3m impairment for PCSIL intangible assets (part of the A$25m in expected write-downs for FY24) and recognised a A$1.7m fair value gain on the contingent consideration for Sentenial. Net debt (excluding leases) at the end of H124 was A$13.7m, compared to A$20.4m at the end of FY23. The company generated cash of A$7.3m in H124, with A$20.8m of underlying operating cashflow offset by regulatory remediation and litigation payments of A$7.0m, capex of A$5.6m and lease payments of A$1.0m

Exhibit 1: H124 results highlights

A$m

H124

H123

y-o-y

Group revenue

150.7

116.2

30%

Gross profit

110.8

70.0

58%

Gross margin

73.5%

60.2%

13.3pp

Underlying gross profit

110.8

78.9

40%

Underlying gross margin

73.5%

67.9%

5.6pp

EBITDA

25.5

(8.7)

394%

Underlying EBITDA

29.3

13.4

119%

Underlying EBITDA margin

19.5%

11.5%

8.0pp

Net debt

13.7

6.8

101%

Source: EML Payments

In January, the company extended the terms of the debt facility that was taken out to acquire Sentential. It was due to be repaid on 28 September 2024, but this has been extended to 31 March 2025. At the end of H124, A$48.8m was drawn on the facility with A$195m undrawn (A$145m acquisition facility and A$50m working capital facility). Also in January, the acquisition facility was cancelled as it is no longer required and the undrawn working capital facility was reduced to A$20m.

Divisional performance

The table below summarises the gross debit volume (GDV), revenue and gross profit of each division.

Exhibit 2: Half-yearly divisional performance

H124

H123

y-o-y

H124

H123

y-o-y

GDV (A$bn)

Gross profit (A$m)

Gifting

1.17

1.06

10.6%

Gifting

30.4

27.2

12%

GPR

6.44

6.54

-1.6%

GPR*

70.2

42.6

65%

Digital Payments

67.78

41.79

62.2%

Digital Payments*

10.1

9.1

11%

Group GDV

75.39

49.39

52.6%

Group

110.8

78.9

41%

Yield (bp)

Gifting

334

321

13bp

Gross margin

GPR

154

110

44bp

Gifting

77.9%

80.1%

-2.2pp

Digital Payments

2

3

-1bp

GPR*

70.8%

59.4%

11.4pp

Group yield

20

24

-4bp

Digital Payments*

81.5%

86.7%

-5.2pp

Revenue (A$m)

Group

73.5%

67.9%

5.6pp

Gifting

39.1

34.0

15.1%

GPR

99.2

71.7

38.4%

Digital Payments

12.4

10.5

17.4%

Group

150.7

116.2

29.7%

Source: EML Payments. Note: *Underlying gross profit excludes one-off fraud costs of A$2.4m (GPR) and A$6.1m (Digital Payments).

Gifting: Incentives growth outpaces malls

Gifting GDV increased 10.6% y-o-y, with strong growth in incentives partially offset by weaker demand from US malls. This translated to revenue growth of 15% y-o-y. Corporate incentive revenue increased 37% y-o-y, while North American mall revenue declined 4% y-o-y. The yield increased due to a higher contribution from interest income: A$3.1m in H124 versus A$1.1m in H123.

GPR: Growth excluding PCSIL

The GPR division reported a 2% decline in GDV stemming from the deterioration of the PCSIL business. Excluding this, GDV was modestly up despite growth restrictions for PFSL (UK). Salary packaging in Australia saw good demand with active benefit accounts increasing 12% y-o-y. Interest income increased significantly, from A$7.5m in H123 to A$31.0m in H124 (of which A$12.7m was from PCSIL), driving the step up in gross margin.

The company provided data on PCSIL’s performance during the period (Exhibit 3). Stripping this out, the remaining GPR business revenue of A$55.8m was up 43% y-o-y and gross profit was up 47% y-o-y (margin 73.8%).

Exhibit 3: PCSIL performance H124 versus H123

A$m

H124

H123

Revenue

43.4

32.6

Gross profit

29.0

11.7

Gross margin

67%

36%

Underlying overheads

(20.5)

(16.1)

Underlying EBITDA

8.5

(2.1)

Net profit after tax (NPAT)

2

(6.5)

Cash burn

(3.2)

(12.2)

Source: EML Payments

As a reminder, the PCSIL business is being wound down and will not be included in the GPR division from H224 onwards.

In the UK, the PFSL (UK) business has undergone a third-party review for the Financial Conduct Authority (FCA). The company will work with the FCA to seek the removal of the growth cap (this currently means that the business cannot sign up new customers).

Digital Payments: Sentenial 60% of revenue

GDV growth of 62% y-o-y was driven by Sentenial direct debit and open banking volumes, which increased by A$24.6bn y-o-y (+67%). Excluding Sentenial, digital payment volumes increased A$1.3bn or 26% y-o-y. Sentenial contributed A$7.5m of revenue, 60% of the total and up 34% y-o-y. The remaining business saw a 2% revenue decline to A$4.9m. Interest income makes up a much smaller proportion of revenue (4.7% in H124 versus 3.0% in H123).

The company is engaged in selling the Sentenial business. The deal will be subject to regulatory approval so is likely to take longer to complete than a non-regulated business.

Focus for H224

Management highlighted the four areas of focus for H224:

Remediation and separation: work with the FCA to lift the growth cap on PFSL (UK) and finalise the separation of PFSL (UK) from PCSIL.

Cost optimisation: cut costs in H2 and accelerate structural efficiency initiatives leading into FY25. See below for more detail.

Growth: building the sales pipeline for FY25; simplifying sales processes.

Strategic review: this includes the focus on selling Sentenial as well as strategic planning for the core business.

Outlook and changes to forecasts

Management maintained guidance for FY24 underlying EBITDA in the range of A$52–58m (+40–56% y-o-y).

Underlying overheads to reduce from H224

Underlying overheads in H124 totalled A$81.6m, up from A$72.1m in H223 and A$66m in H123. Cost increases on a year-on-year basis reflect investments in the leadership team, the ongoing strategic review, investment to strengthen risk and compliance, employee incentives for talent retention, one-off professional fees to stabilise and improve key operational areas and increased technology spend on new risk and compliance software and additional cloud-related costs. Management noted that the cost optimisation programme is behind schedule due to the focus on the PCSIL winddown and the ongoing strategic review. The company expects that underlying overheads excluding PCSIL will reduce by 5–10% h-o-h in H224 (ie to A$55.0–58.0m) as cost reduction activities accelerate. Further cost savings are expected in FY25, with net headcount expected to reduce by c 10% by year-end, less need for external professional services and a rationalisation of the ICT cost base.

Margin expansion for continuing operations

Our forecasts currently include PCSIL for H124 and exclude it from H224. We expect the company to report PCSIL as a discontinued operation for FY24, but do not have enough information to strip it out of our FY24 forecasts and FY23 actuals. We provide a pro forma table below that shows elements of our forecasts for FY24 and FY25 excluding PCSIL. The company expects costs for continuing operations to reduce by A$10–15m in FY25 versus FY24 and for continuing operations underlying EBITDA margins to increase by c 4–5% per annum for FY23–26. This assumes customer revenue growth of 5–8% per annum and interest yields moderating in the longer term (see below).

Exhibit 4: Pro forma metrics for FY24 and FY25

A$m

Published forecasts

Excluding PCSIL

FY23

FY24e

FY25e

FY24e

FY25e

Revenue

254.2

262.1

238.0

218.7

238.0

Gross profit

165.1

195.2

173.9

166.2

173.9

EBITDA

-2.6

49.7

62.5

62.5

One-offs

39.7

6.0

0.0

0.0

Underlying EBITDA

37.1

55.7

62.5

47.2

62.5

Underlying EBITDA margin

14.6%

21.3%

26.3%

21.6%

26.3%

Source: Edison Investment Research

Interest income contributing a growing share of revenue

Interest income made up 23.0% of H124 revenue, up from 7.7% in H123 and 16.5% in H223, with an annualised yield of 2.54% compared to 1.27% for FY23. PCSIL contributed just over a third of interest income in H124 with the next largest contributor being PFSL (UK). The chart below shows the breakdown of stored float at the end of H124 and the progression of interest income since H122. Central bank rates continued to move up during H124, but have now been stable for several months, so H224 should see the full benefit of the higher rates.

Exhibit 5: Stored float and interest income

Source: EML Payments. Note: 1: A$0.8bn of A$2.1bn cash in the stored float is held by PCSIL.

The company has undertaken optimisation activities to improve earned yields and expects interest yields to moderate in the longer term by 50–75bp from current levels (taking into account improvements in the yield from optimisation activities).

Changes to forecasts

We have revised our forecasts to reflect the H124 performance. We have reduced the final payout of contingent consideration for Sentenial from A$7.0m to A$5.3m. We have removed the portion of float related to PCSIL. Our underlying EBITDA for FY24 increases by 2.2% to A$55.7m, in the middle of the guidance range.

Exhibit 6: Changes to forecasts

FY24e

FY24e

FY25e

FY25e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

A$m

251.0

262.1

4.4%

3.1%

242.9

238.0

-2.0%

-9.2%

Gross profit

A$m

176.2

195.2

10.8%

18.3%

172.9

173.9

0.6%

-10.9%

Gross margin

70.2%

74.5%

4.3%

9.6%

71.2%

73.1%

1.9%

-1.4%

Underlying gross profit

A$m

176.2

195.2

10.8%

12.0%

172.9

173.9

0.6%

-10.9%

Underlying gross margin

70.2%

74.5%

4.3%

6.0%

71.2%

73.1%

1.9%

-1.4%

EBITDA

A$m

46.5

49.7

6.9%

-2016.3%

59.7

62.5

4.7%

25.7%

EBITDA margin

18.5%

19.0%

0.5%

20.0%

24.6%

26.3%

1.7%

7.3%

Add back one-off costs

A$m

8.0

6.0

N/A

N/A

0.0

0.0

N/A

N/A

Underlying EBITDA

A$m

54.5

55.7

2.2%

50.3%

59.7

62.5

4.7%

12.2%

Underlying EBITDA margin

21.7%

21.3%

-0.4%

6.7%

24.6%

26.3%

1.7%

5.0%

Normalised operating profit

A$m

28.7

32.5

13.3%

-269.7%

40.9

44.8

9.6%

37.7%

Normalised operating margin

11.4%

12.4%

1.0%

20.0%

16.8%

18.8%

2.0%

6.4%

Reported operating profit

A$m

(15.8)

(8.3)

-47.8%

-97.3%

21.4

32.3

51.1%

-491.5%

Reported operating margin

-6.3%

-3.1%

3.1%

115.7%

8.8%

13.6%

4.8%

16.7%

Normalised PBT

A$m

25.1

27.5

9.6%

-221.0%

37.3

39.8

6.7%

44.6%

Reported PBT

A$m

(19.4)

(11.5)

-40.7%

-95.9%

17.8

27.3

53.4%

-337.5%

Normalised net income

A$m

20.1

22.0

9.6%

-221.0%

29.8

31.8

6.7%

44.6%

NPATA

A$m

26.5

26.6

0.3%

-198.6%

31.2

31.8

1.9%

19.8%

Add back one-off costs

A$m

6.4

4.8

0.0

0.0

Underlying NPATA

A$m

32.9

31.4

-4.6%

541.1%

31.2

31.8

1.9%

1.5%

Reported net income

A$m

(15.5)

(9.2)

-40.7%

-96.8%

14.2

21.8

53.4%

-337.5%

Normalised basic EPS

A$

0.05

0.06

9.6%

-220.9%

0.08

0.09

6.7%

44.5%

Normalised diluted EPS

A$

0.05

0.06

9.6%

-217.8%

0.08

0.08

6.7%

44.5%

Reported basic EPS

A$

(0.04)

(0.02)

-40.7%

-96.8%

0.04

0.06

53.4%

-337.3%

NPATA/share

A$

0.07

0.07

0.3%

-198.5%

0.08

0.08

1.9%

19.7%

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

28.1

22.6

-19.6%

10.9%

0.8

(3.8)

-606.1%

-116.8%

GDV

A$bn

164.8

154.3

-6.4%

19.1%

174.8

174.2

-0.3%

12.9%

Yield

bp

15

17

2

-3

14

14

0

-3

Divisional data

GDV

Gifting

A$bn

1.8

1.8

0%

10%

2.0

2.0

0%

10%

GPR

A$bn

10.9

10.9

0%

-15%

9.5

9.5

0%

-13%

Digital Payments

A$bn

152.1

141.6

-7%

23%

163.3

162.7

0%

15%

Revenue

Gifting

A$m

84.6

79.0

-7%

6%

91.0

87.0

-4%

10%

GPR

A$m

140.1

157.5

12%

-1%

121.9

121.9

0%

-23%

Digital Payments

A$m

26.1

25.4

-3%

17%

29.8

29.0

-3%

14%

Yield

Gifting

4.60%

4.30%

-0.3%

-0.16%

4.50%

4.30%

0%

0.00%

GPR

1.29%

1.45%

0.2%

0.21%

1.29%

1.29%

0%

-0.16%

Digital Payments

0.02%

0.02%

0.0%

0.00%

0.02%

0.02%

0%

0.00%

Gross profit

Gifting

A$m

68.7

63.2

-8%

4.6%

73.9

70.0

-5%

10.7%

GPR

A$m

85.1

110.3

30%

18.0%

73.8

79.2

7%

-28.1%

Digital Payments

A$m

22.3

21.7

-3%

83.3%

25.2

24.6

-2%

13.2%

Gross margin

Gifting

81.3%

80.0%

-1.3%

-1.1%

81.2%

80.5%

-1%

0.5%

GPR

60.8%

70.0%

9.2%

11.0%

60.5%

65.0%

5%

-5.0%

Digital Payments

85.3%

85.4%

0.1%

30.8%

84.6%

84.8%

0%

-0.7%

Source: Edison Investment Research

Exhibit 7: Financial summary

A$'m

2019

2020

2021

2022

2023

2024e

2025e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

97.2

121.0

192.2

232.4

254.2

262.1

238.0

Cost of Sales

(24.2)

(32.9)

(63.8)

(74.6)

(89.1)

(66.8)

(64.1)

Gross Profit

73.0

88.1

128.4

157.8

165.1

195.2

173.9

EBITDA

 

 

29.7

32.5

42.2

34.3

(2.6)

49.7

62.5

Normalised operating profit

 

 

25.6

22.4

31.6

18.4

(19.2)

32.5

44.8

Amortisation of acquired intangibles

(7.5)

(11.1)

(20.2)

(16.5)

(18.2)

(10.0)

(10.0)

Exceptionals

(3.0)

(13.6)

(11.2)

1.4

(262.9)

(25.8)

0.0

Share-based payments

(4.2)

(6.1)

(5.0)

(3.0)

(1.8)

(5.0)

(2.5)

Reported operating profit

10.9

(8.5)

(4.8)

0.3

(302.0)

(8.3)

32.3

Net Interest

(0.0)

(0.7)

(1.4)

(2.4)

(3.6)

(5.0)

(5.0)

Joint ventures & associates (post tax)

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

1.8

0.0

Profit Before Tax (norm)

 

 

25.6

21.6

30.2

16.0

(22.8)

27.5

39.8

Profit Before Tax (reported)

 

 

9.0

(7.9)

(23.3)

(0.3)

(281.8)

(11.5)

27.3

Reported tax

(0.6)

0.7

(5.4)

(4.5)

(3.1)

2.3

(5.5)

Profit After Tax (norm)

20.5

17.2

24.1

12.8

(18.2)

22.0

31.8

Profit After Tax (reported)

8.5

(7.1)

(28.7)

(4.8)

(284.8)

(9.2)

21.8

Minority interests

(0.2)

0.0

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

20.3

17.2

24.1

12.8

(18.2)

22.0

31.8

Net income (reported)

8.3

(7.1)

(28.7)

(4.8)

(284.8)

(9.2)

21.8

Basic ave. number of shares outstanding (m)

249

304

360

371

374

374

375

EPS - basic normalised (A$)

 

 

0.081

0.056

0.067

0.035

(0.049)

0.059

0.085

EPS - normalised fully diluted (c)

 

 

7.812

5.489

6.579

3.398

(4.869)

5.736

8.287

EPS - basic reported (A$)

 

 

0.033

(0.023)

(0.080)

(0.013)

(0.762)

(0.025)

0.058

Dividend (A$)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

36.9

24.4

58.9

20.9

9.4

3.1

(-9.2)

Gross Margin (%)

75.1

72.8

66.8

67.9

64.9

74.5

73.1

EBITDA Margin (%)

30.6

26.9

21.9

14.8

-1.0

19.0

26.3

Normalised Operating Margin

26.4

18.5

16.4

7.9

-7.5

12.4

18.8

BALANCE SHEET

Fixed Assets

 

 

162.9

872.1

685.3

827.3

581.3

511.6

498.1

Intangible Assets

104.6

371.7

350.1

448.5

192.5

153.8

140.0

Tangible Assets

5.4

14.6

11.2

12.7

10.6

11.3

12.0

Investments & other

53.0

485.8

323.9

366.1

378.3

346.6

346.0

Current Assets

 

 

313.8

1,008.6

1,603.5

1,855.1

2,413.2

1,745.3

1,721.7

Stocks

18.2

22.3

16.4

21.5

27.5

27.6

26.7

Debtors

14.4

21.7

22.0

35.8

38.9

39.3

36.0

Cash & cash equivalents

33.1

118.4

141.2

73.7

71.4

49.6

26.7

Other

248.2

846.2

1,424.0

1,724.1

2,275.5

1,628.8

1,632.3

Current Liabilities

 

 

(299.0)

(1,357.8)

(1,792.8)

(2,100.1)

(2,709.9)

(2,044.9)

(1,982.6)

Creditors

(33.9)

(47.5)

(62.9)

(65.7)

(82.3)

(68.3)

(56.2)

Tax and social security

(0.8)

(2.6)

(6.0)

(2.8)

(3.1)

(3.1)

(3.1)

Short term borrowings

(15.0)

0.0

(1.4)

(1.8)

(23.0)

(72.2)

(22.9)

Other

(249.4)

(1,307.7)

(1,722.5)

(2,029.8)

(2,601.5)

(1,901.3)

(1,900.4)

Long Term Liabilities

 

 

(33.5)

(82.6)

(81.1)

(145.2)

(110.1)

(41.7)

(42.5)

Long term borrowings

0.0

(35.8)

(36.9)

(81.6)

(68.8)

0.0

0.0

Other long term liabilities

(33.5)

(46.8)

(44.2)

(63.6)

(41.3)

(41.7)

(42.5)

Net Assets

 

 

144.2

440.2

414.9

437.1

174.6

170.4

194.7

Minority interests

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

170.4

194.7

CASH FLOW

Op Cash Flow before WC and tax

28.4

31.2

41.2

33.3

(2.3)

49.7

62.5

Working capital

2.0

3.6

31.7

(68.4)

9.0

(29.4)

(11.7)

Exceptional & other

(0.7)

(12.7)

(17.3)

0.4

(2.6)

(0.7)

0.0

Tax

(0.6)

0.7

(5.4)

(4.5)

(3.1)

2.3

(5.5)

Net operating cash flow

 

 

29.2

22.8

50.2

(39.1)

0.9

21.9

45.4

Capex

(5.8)

(11.0)

(12.6)

(14.1)

(11.7)

(11.2)

(11.8)

Acquisitions/disposals

(44.0)

(142.5)

(3.5)

(57.1)

10.9

(5.3)

0.0

Net interest

(0.0)

(0.7)

(1.4)

(2.4)

(3.6)

(5.0)

(5.0)

Equity financing

0.4

240.8

0.6

0.0

0.0

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(0.4)

(7.0)

(11.0)

(1.9)

(2.2)

(2.2)

(2.2)

Net Cash Flow

(20.6)

102.3

22.2

(114.6)

(5.7)

(1.8)

26.4

Opening net debt/(cash)

 

 

(39.0)

(18.1)

(82.5)

(103.0)

9.7

20.4

22.6

FX

(0.3)

(2.0)

0.6

(1.1)

3.4

0.0

0.0

Other non-cash movements

0.0

(35.8)

(2.4)

3.0

(8.4)

(0.5)

0.0

Closing net debt/(cash)

 

 

(18.1)

(82.5)

(103.0)

9.7

20.4

22.6

(3.8)

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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