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#Research report
Last edited 7 days ago

Edison's new research report on EML (including an analysis of the Sentenial acquisition):

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#Sentenial Acquisition
Added a week ago

I thought this was a Good summary on EML so thought it worth sharing.

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Added 2 weeks ago

I'm curious about EML and whether or not it deserves the recent share price hike. Reason? It has terrible margins and a very low ROE. Why? Is it because most of its growth is based on acquisitions that have been hyped by the market but in reality have not really delivered much on the bottom line? Or something else? I own both EML and APT and the contrast is interesting in that APT has outperformed EML by 3x post covid. However to my mind, APT's TAM dwarfs EML's and most of APT's growth is purely a land and expand organic play - not by acquisition. What am I missing here? I'm sure I'm going to be asked why I hold stocks that I'm questioning the validity of but I see no harm in being hard on my investments and facing the facts. Anyone care to share their thoughts here?

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Added 2 weeks ago

If you own or are thinking of owning EML, the Ausbiz interview with the CEO is 13 minutes well spent on the Sentenial acquisition and the business in general:

Ausbiz EML CEO Tom Cregan Interview 13min

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#Sentenial Acquisition
Added 2 weeks ago

EML has just announce the acquisition of Sentenial group, for around $170m (A$110m upfront, A$60m earnout) which will add A$70b in GDV to the current A$20b but at much lower rates (around 16 basis points Vs 90 basis points for current EML business), but stronger gross margins at 90% Vs current 70%. By Fy23, assuming the full earn-out is achieved the total purchase price would be €110 million, representing a revenue multiple of less than 3 times at projected growth rates.


The Sentenial acquisition add’s two new business lines to EML, further expanding it’s offering and diversifying the business, setting it up for to be a full service international payments solution provider as open banking grows internationally. These business lines which add to the current General Purpose Reloadable (GPR), Gift & Incentive (G&I) and Virtual Account Numbers (VAN) are:


SENTENIAL: provides direct debit, credit transfers and instant payments for major European banks with annual volumes of more than €45 billion (A$70b) in Calendar Year (CY) 2020. Sentenial provides the software platform through a Software-as-a-Service (SaaS) revenue model with charges for access to the platform, as such the yield is low, at circa 1-2 basis points (bps).


NUAPAY: an Open Banking product with A2A capabilities which in CY20 processed volumes of more than €700 million. Nuapay typically provides regulated services using Payment Institution licences issued by the Financial Conduct Authority (FCA), UK and L'Autorité de contrôle prudentiel et de résolution (ACPR), France and generates higher yields of circa 10-50 bps.


I see this additional product and geographic expansion as a good deal at a good price, offering significant opportunities for EML to sell Sentenial product into markets EML is in but Sentenial isn’t and cross sell or offer a full solution to new and existing customers.  My current valuation of $9.71 will need updating, but I expect it to be a solid upward revision and the market response today of a 10% lift in price suggests the consensus is that this is a value accretive deal.

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#ASX Announcements
Added 2 weeks ago

07 April 2021

EML Acquires Sentenial Limited and enters the Open Banking market in Europe

EML Payments Limited (ASX: EML) has entered into a binding Share Purchase Agreement to acquire 100% of Sentenial Limited and its wholly owned subsidiaries (‘Sentenial’) including their open banking product, Nuapay for an upfront enterprise value of €70 million (A$108.6 million), plus an earn-out component of up to €40 million (A$62.1 million) (the ‘Acquisition’).

  • The Acquisition broadens EML’s payment offerings to include alternate (non-card, non-scheme) payment products to our platform to address customer demand, complementing card scheme based payments;
  • EML continues its growth as one of the largest FinTech enablers in digital banking, prepaid and open banking globally, expecting to process in excess of A$90 billion annually post acquisition;
  • Sentenial is a leading European Open Banking and Account-to- Account(“A2A”) payments provider, utilizing a cloud-native, API-first, full stack enterprise grade payment platform. Combining the EML & Nuapay platforms and capabilities is an opportunity to deepen customer relationships, enter new industry verticals and diversify our revenue streams;
  • Sentenial has an attractive customer base across banking, corporate and software industries, including 4 of the top 7 banks in the United Kingdom and some of the largest merchant acquirers in Europe;
  • Sentenial has a highly scalable platform that has had continual investment to future proof the business and allow for agile deployments and rapid growth. EML is well positioned to export the technology globally, with plans to leverage the Sentenial platform into Australia and North America.

The acquisition and transaction costs will be funded by a combination of:

  • €38.9 million(A$60.3 million)1 Cash on hand and a new multicurrency debt facility, of which A$31 million will be drawn. EML has secured a total facility of up to circa A$225 million to support working capital and future growth, which includes a A$100 million accordion facility. This facility will provide the Group with flexibility for future M&A opportunities as they arise;
  • €31.1 million(A$48.2 million) Scrip consideration (an issue of new EML shares) to Vendors at a 10 day VWAP to signing this agreement, equating to approximately 9.6m shares or 2.9% of the issued shares of EML.Approximately 60% will be subject to a 6 month restriction from sale.
  • Up to €40 million (A$62.1 million) earn-out consideration, contingent on the achievement of earn-out targets correlating to incremental Open Banking revenue of €27 million (A$41.9 million) in the 12-month period ending on 31 December 2023. Earn-out payable in cash or equity at EML's discretion in 2024;
  • €2.5 million (A$3.9 million) of the cash consideration will be held in escrow for 12 months following completion of the Acquisition for claims made under the Acquisition agreement alongside a Warranty & Indemnity Insurance Policy.
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#Valuation Detail
Added 3 weeks ago

Valuation detail for EML, see report for full reasoning

View Attachment

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#H1 FY21 Results 17/2/21
Added 2 months ago


~ Group Gross Debit Volume of $10.2 billion, up 54% over PCP;

~ Group Revenue1 of $95.3 million, up 61% over PCP;

~ Group EBITDA2 of $28.1 million, up 42% over PCP;

~Group NPATA of $13.2 million, up 30% over PCP;

~ Underlying operating cash inflows of $35.1 million, up 68% on PCP; and

~ FY21 Reinstated EBITDA Guidance Range of $50.0 million - $54.0 million

Disc; I have small holding

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Added 3 months ago

Putting aside G&I and VANs, I will focus on the GPR segment. The reality is that for Eml to rerate then this will have to come from the GRP segment & we will need to an acceleration in revenue growth.

Over the past couple of years the GRP revenue has grown organically and fromacquisition. We know from the last update the 'EML of old' GPR revenues grew16% QoQ & the PFS grew revenues 24% QoQ. Now it’s a mugs game here to putsome assumptions in for how the FY will transpire but my base case is 5-10% QoQgrowth and anything above 20% is (rocket emoji) stuff. At 10% QoQ GPR growththat should equate to ~$120m Rev from this segment alone for the FY21.


FY19 - $23.9m Revenue GPR
FY20 - $41.9m Revenue GPR
Q1FY21 - $26.3m Revenue GPR
Est FY21 -$120m Revenue GPR (w/ 10% QoQ growth)

Now how will revenues in this segment accelerate? This is the primary focus of the internal and external investments EML have been making- $10-15m in internal product R&D + FinLabs investments (2investments so far that we know of) - so this is the key to revenues here having a snowball effect. We are 6+ months into the acceleration project and really need to see some concrete evidence or news that it is working.

Tl;dr: need to see GPR revenue growth and results from product innovation in upcoming H1 results 

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#FY21 Q1 Results
Added 6 months ago

EML reported their FY21 Q1 Results. Market popped on the Investor Briefing a few days ago but not much from these results, which is interesting. Worth reading this article which breaks down the details for you.

EML Con event coming up. For anyone interested, you can sign up for this event at

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#Bull Case
Added 6 months ago

Investor briefing was released on Wednesday, stock popped 11%. See briefing here (

EML 'creates secure payments solutions for its customers'

Breaking this presentation down;
- Says it is in a Trillion dollar industry
- 46 contracts signed in the last 2 quarters
- 331 contracts in the pipeline
- Projected $5 billion GDV in 3-4 years
- From 2018 - 2020, retained 99.9% of customers

Where to from here? 
IMO, EML is in a good spot, in the technology sector and leading the way into where the world is heading, online/mobile payments.
Diversified its business with the aquisition of PFS, which helped get away from relying on gift cards, now only making up 30% of revenue.
Little customer churn over the last 3 years. 
52 week high of $5.70, ran too hard at this point and came off
52 week low of $1.20 in COVID March lows
Currently $3.52.
If they continue to signs contracts, there is no doubt that the share price will run up from here.  

Disclaimer: I hold EML in my portfolio

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#Broker / Analyst Views
Added 7 months ago

BUY - Intelligent Investor view on EML

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#ASX Announcements
Added 8 months ago

8common Announces CardHero Launch Following the Signing of EML Agreement

  • 8common has signed a 3-year agreement with EML Payments Limited to issue prepaid Mastercards through the company’s CardHero platform
  • The agreement with EML enables the launch of 8common’s CardHero solution via two products: CardHero and CardHero+
  • The core product CardHero, will be released as both a virtual and physical prepaid card combined with travel and expense management solutions. CardHero is targeted at government entities and large enterprise clients
  • CardHero+ provides an additional fund disbursement platform which aims to support not for profit organisations and educational institutions

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Added 8 months ago

EML is a payments technology company, that provides customised paymentsolutions to their B2B clients. Not a one trick pony gift card company, and Ithink that will be evident in the future period as the wider company grows andthe Mall gift card sector 'potentially' shrinks. There is a bit of amisconception out there with what EML does and I think it can be simply puthere;

  • EML enter into multiyear contracts with customers to provided tailored solutions to improve their customers customers' experience. EML continually improve their technology and product offering and therefore once a customer is captured the churn of these customers is relatively low.
    • This is why payments companies capture a niche in the payment market 
    • This is also why if payment companies fail to innovate, then they can potentially face losing customers - hence the benefit of R&D and Project Accelerator 
    • This is why EML may be able to carve out niches in the LT, through customised/integrated solutions.

Now to the results

The Good:

  • EML have done an amazing job at managing what is in their control. You can't really fault them here. Once you put the COVID impact aside, the PFS renegotiation/product development/resource allocation have all been awesome - hopefully we see this pay off in the future.
  • Growth in new customers and new verticals is positive and I think this may be underappreciated in the market right now.
    • Incentive programs launched:
      • 10 incentive partener contract on PAYS tech
    • GPR programs launched
      • 2 dozen contracts in Banking, Control Pay, Disbursements & Salary
      • Focus here on Sezzle and Laybuy being guided into multiple regions with EML as a processor.
        • I didn’t appreciate the single touch point focus here, but to be able to onboard a customer once and into EMLs 3 regional processors would be very nice
    • VANS
    • AU Business (smallest business) (aus-biz)
      • 4 dozen opportunities being worked on in pipeline
  • July run rate of GDV - there are a few different ways to model this out and I'll try do it simply in aggregation. Note that this is using the July run rate and factoring in no growth from new business / change in revenue mix / impacts from further lockdowns. Basically, I think we can assume 55m EBITDA for FY21 as a baseline scenario. This would equate to ~$40 in underlying cash inflo


Option 1 - Total Business Aggregation ($m)







July GDV Performance

July GDV Annualised
















GDV to Rev


90 bps

Total Revenue






GP Margin






Less Overheads



Underlying EBITDA



Underlying Cash Inflow - 70%




The Bad:

EBITDA margins in H2Fy22 had fallen to 21%, with the COVID & PFS impacts on the numbers I wouldreally prefer to wait for a clean set of numbers to see this wash through thefinancials. My baseline EBITDA margins for the business remains at 30%.


The Ugly:

Let's face it theimpact on the malls sector was huge. I found some comments suggestion thatMalls GDV was on track to do 1.1b seldom - the G&I segment's actual FY20performance was $1.175b. My assumption here is that maybe $250m in GDV wasimpacted which converts to

  • $15m revenue
  • $12m GP

The flip side tothis is that 

  • As the G&I segment rebases, which will rebase the entire groups financials, then to call EML a gift card business will become very inaccurate
  • $1.175 was the total G&I GDV for FY20 and in July EML generated $72m in G&I (annual $860m) without considering any seasonal effects.
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Added 8 months ago

Monotone CEO gives fair reasoning as to why no guidance for the Christmas period is provided in an ausbiz interview. Whether this is genuine we won't know until later. Given the overly glossy presentation and the slightly hidden negatives in the report, I'm not filled with over confidence, more a slight distrust. Hopefully unfounded. 

Having said that, I won't be selling anytime soon and may even add. Eml maybe looking to stabalise the S.P over the coming months with the hope that a good number of their prospects pay off. This may create a less sentiment driven S.P. that could be pushing $4.50 by Feb. 

I maybe alone in thinking that this Christmas period could actually be really good for the gift card side of the business. It's the side of the business i like least but i can see it pushing EML forward in the short term. Nervously positive on EML! 

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Added 8 months ago
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#ASX Announcements
Added 8 months ago

FY20 Highlights

  • Record underlying EBITDA of $32.5m (excludes acquisition costs) up 10% from $29.7m in FY19
  • Incurred one-off restructure costs of $0.6m in March 
  • June (included in EBITDA) for $1.5m recurring savings (FY21 onwards) 
  • Record NPATA of $24.0m up 17% from $20.6m in FY19
  • Group underlying cash conversion of EBITDA at 110.1% with $118.4m of cash on hand at 30 June
  • Strong financial performance during the first 8 months of the year before COVID-19 impacted trading conditions 
  • The Group has a strong balance sheet with significant cash reserves and no senior secured debt ensuring the Group has the resources to successfully execute on our Strategy and be positioned to take advantage of opportunistic M&A
  • Acquired and commenced integration of Prepaid Financial Services (Ireland) Limited ('PFS'), which pivots the group to generating the majority of Revenues from the General Purpose Reloadable ('GPR') segment, a long term strategic priority
  • Reviewed the Group Strategy post acquisition of PFS in April 2020 and launched Project Accelerator to drive the Group's growth over the next three years
  • Signed and launched major new customers in all verticals with sales pipeline momentum evident in all markets
  • Post COVID-19 sales momentum strengthened by companies seeking digital payment solutions as part of a global trend to move away from cash payments
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#Bear Case
Added 9 months ago

Does anyone else have any thoughts on how this business copes with the onslaught of trouble brewing in the retail sector? I'm hoping Christmas renews interest in gift card purchases but other catalysts are out there? It's proving to be a real laggard in a recessionary environment. More so than I would have expected it to be

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#Business Model/Strategy
Added 10 months ago

PFS expressing interest to support the clients of the Wirecard collapse Hopefully a solution can be put in place that can be beneficial for all parties.

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#Bear Case
Added 11 months ago

See attached report for full analysis.


Date of Analysis: 5/3/2020. Idea source: Small cap, Stock screener, (more than 50M shares). Analysis date price: AUD2.65. 

Framework outcomes 

Good Stocks Cheap: The price needs to drop -86% to AUD0.36 in order to be cheap.

Growth With Value: The price is cheap and, remaining so, can still move up 271% to AUD9.83.

View Attachment

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Added 11 months ago

Positive or Negative thoughts around EML?

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#Bull Case
Last edited 11 months ago

Amazing insights in the below livewire market outlook. See you all at the $5 party.

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#Restructured Acquisition of PF
Last edited one year ago

As I thought, EML has restructured it’s proposed acquisition of PFS Financial so it falls in line with the current disruption to Covin-9. The initial acquisition price was $452m plus earnouts over three years. Today the upfront payment of around $252m will be funded by the recent capital raising which left the cash reserves at around $280m.

The acquisition was noted to be completed by the end of this week, with appprovals granted. This new deal will leave EML with cash on hand, nil debt and hence a strong balance sheet after the acquisition, albeit still some downside risk due to the mall side of PFS in Spain and France until we get to the other side of this pandemic.

This will make EML the worlds largest fintech in open banking and prepayments operating in 26 Countries. In the short term there will be price volatility due to the uncertainty of earnings of the business, but in the long term, this will set up EML well for the future. The cash in the bank will help,the business get through the pandemic and allowing it to seek another acquisition or expand the business for future growth.



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#Broker / Analyst Views
Last edited one year ago

26-Sep-2019: "Buy Hold Sell: 5 hot small caps on a high"

The five stocks discussed in this particular "BHS" episode have appreciated by an impressive 243% on average over the last 12 months. Returns like this are usually divisive, with investors on both sides of the trade declaring them either structural winners, or overpriced hype stocks. High prices, high expectations, but with them, the chance of high returns.

Will the prices crash like Blackmores? Or are they set for years of outsized returns like CSL?

Of the five stocks discussed (ISX, JIN, EML, PET & APT) the two guest analysts - being Arden Jennings, Co-Portfolio Manager at Ausbil Investment Management, and Robert Miller, Portfolio Manager at NAOS Asset Management - only agree on one of them being a "BUY" - and that one is EML - which is discussed from the 2:44 mark in the video.

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#1H20 Results
Added one year ago

The payments sector is currently changing in Australia and overseas and EML is amongst it. EML has now de-risked the business With 80% offshore revenue, 85% recurring revenue and strong reporting by all of its verticals in particular VANS and the salary sacrificing segment. Breakage from the cards business is becoming less relative as their verticals grow which is another positive.
EML has the reputation in recent years of beating expectations and reports a conservative outlook. The upwardly revised guidance range appears conservative and Could add further upside especially with the PFS acquisition adding to its earnings. Guidance has been flagged to $39.5m-$42.5m from $38.5m-$42.5m which if conservative a likely 2H beat is coming. Current prices are an opportunity to get into this company with more growth to come.

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Added one year ago

James Eyres in The AFR writes that EML Payments has won a contract to supply payments services to the NSW Health department, part of its strategy to diversify revenue from gift cards and take on banks in niche areas such as salary packaging. The article reports that NAB and ANZ have also pulled back from providing payments services for salary packaging, which has opened the door for specialists such as AccessPay and EML Payments.


A good win for EML and indicates there is going to be increasing opportunity for more such wins going forward.

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Last edited one year ago

EML Payments provide prepaid cards (think gift cards). These can be the physical kind, or virtual (to use online) or mobile (for use in company apps).

Also do salary packaging products, allowing companies to provide non-cash benefits to empoyees. And also loyalty programs.

It is essentially a payments processing business. With $30m plus invested into back-end IT infrastructure.

Meaningful regulatory & complaince barriers to entry

Manage 1,100 card programs in 19 countries 

The volume of debit transactions -- Gross Debit Vilume (GDV) -- was up 348% in FY17 and 86% in HY18.

Revenue and EBITDA have been growing very strongly in recent years; up 100% and 135% per annum since 2015.

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Added one year ago
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