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▲ 0.04 (5.97%)
Market capitalisation
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Research: TMT
Recent engagement with the Central Bank of Ireland (CBI) has confirmed that EML Payments’ Irish subsidiary will need to undertake further work to meet the CBI’s risk assessment requirements. This is likely to push the final third-party validation process into 2023. Interest rate rises in Europe should go some way to offset additional compliance costs. We maintain our forecasts pending FY22 results on 22 August.
EML Payments |
More work to do in Europe |
Compliance update |
Software and comp services |
25 July 2022 |
Share price performance Business description
Analyst
EML Payments is a research client of Edison Investment Research Limited |
Recent engagement with the Central Bank of Ireland (CBI) has confirmed that EML Payments’ Irish subsidiary will need to undertake further work to meet the CBI’s risk assessment requirements. This is likely to push the final third-party validation process into 2023. Interest rate rises in Europe should go some way to offset additional compliance costs. We maintain our forecasts pending FY22 results on 22 August.
Year end |
Revenue (A$m) |
PBT* |
NPATA** (A$m) |
Diluted EPS* |
DPS |
P/E |
EV/EBITDA |
06/20 |
121.0 |
21.6 |
21.0 |
5.5 |
0 |
16.9 |
9.4 |
06/21 |
192.2 |
30.2 |
21.0 |
6.6 |
0 |
14.1 |
7.2 |
06/22e |
229.1 |
20.1 |
15.5 |
4.3 |
0 |
21.8 |
8.2 |
06/23e |
255.5 |
36.1 |
31.4 |
7.6 |
0 |
12.2 |
5.2 |
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.
EML Payments has provided an update regarding the ongoing regulatory issues between its Irish subsidiary, PFS Card Services (Ireland) Limited (PCSIL), and the CBI. EML’s remediation plan had a target completion data of 30 June, to be followed by a third-party assurance process. In this update, EML notes that the CBI has identified shortcomings in components of the remediation programme, principally the sequencing and approach taken to the risk assessment of its distributors, corporates and customers. PCSIL will adopt a revised approach to those components, which may include additional controls being embedded in its internal control framework. It anticipates the third-party assurance being finalised in 2023. Separately, EML notes that the European Central Bank cash rate rise of 0.5% (21 July) should benefit its European business by c A$4m on an annual basis. We note that Euro-based float was worth c A$800m at the end of Q322.
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Research: TMT
SenSen continued its run of record quarterly cash receipts, which rose 128% y-o-y and 117% q-o-q to A$3.7m. Notably, the company secured contracts worth at least A$3.8m across all four business verticals and multiple geographies. These wins provide recurring, higher-margin revenues, boosting annualised recurring revenue (ARR) towards c $8m as it made solid progress in transitioning to a ‘pragmatic SaaS’ model. The results support our estimates and if SenSen continues this trend of growing ARR and winning contracts across multiple verticals and geographies, we believe it could reduce the valuation gap versus peers.
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