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#Valuation Detail
Added a week ago

UBS put out a new valuation today siting a solid Q3 result. Also discussed the risk with the current CBI Investigation.

UBS put the 12 month valuation at $5.30  (last close $3.48) a nice outlook!

But then goes on it divvi up the outcomes of the investigation: "We then include a $0.91 discount for UBSe blended range of investigation outcomes". This, if EML gets off with a wrist smack, whatever, then the UBS valuation is $6.21 , A 71% increase on todays close.

Thats quite good enough for me to hang on at the risk of the investigation. :) 


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#Q3 Update
Added 2 weeks ago

YTD unaudited EBITDA of $43.8, $15.7m in Q3, of that PFS has contributed around $34.4m in Gross Profit and $16m to EBITDA YTD.  PCP growth is very large, but not relevant given the impact of Covid and addition of PFS.

Regulatory Update: EML is working with CBI but it is confidential and they cannot disclose – so no news.  However, they note costs of up to $2m in FY21 are expected on legal and professional advice, with no indication at this stage on an FY22 financial impact.

They previously reiterated full year guidance except for regulatory issues, so it looks like we can knock 2m off the bottom line of the below guidance, but they look to be on track otherwise:

·         Rev 180-190m

·         EBITDA 50-54m

·         NPATA 30-33.5m

·         EBITDA per share 13.8-15.0c

View Attachment

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#Bull Case
Added 3 weeks ago

If it's good enough for Commonwealth Bank to soak up cheap EML shares it'll provide confidence with many others moving forwards.  Commonwealth Bank of Australia (ASX: CBA) has been taking advantage of recent weakness in the EML Payments share price to increase its position.

UBS would agree. Last week they reaffirmed their buy rating but trimmed their price target to $5.30.


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Last edited 4 weeks ago

What could go wrong?

Under Section 45 of the Central Bank (Supervision and Enforcement) Act 2013, Click Here the consequences of not complying with subsection (2) below will result in one of the actions listed under subsection (3) below. None of these actions look good for the EML European business.

In the end I think the severity of the action will come down to whether EMLs PCSIL subsidiary blatantly ignored it's obligations under the Act. Something we may not know for some time to come. 


(1) Where the Bank is satisfied that one or more of the circumstances specified in subsection (2) exist in relation to a regulated financial service provider, or a related undertaking of a regulated financial service provider, the Bank may, in the interests of the proper and effective regulation of financial service providers, give a direction in writing to the regulated financial service provider or related undertaking to take such of the actions specified in subsection (3) as are mentioned in the direction.

(2) The circumstances referred to in subsection (1) are as follows:

(a) that the regulated financial service provider, or related undertaking, has become or is likely to become unable to meet its obligations to its creditors or its customers;

(b) that the regulated financial service provider, or related undertaking, is not maintaining or is unlikely to be in a position to maintain adequate capital or other financial resources having regard to the volume and nature of its business;

(c) that the regulated financial service provider, or related undertaking, has failed to comply with, is failing to comply with or is likely to fail to comply with any condition or requirement imposed by, or by virtue of, financial services legislation;

(d) that the regulated financial service provider, or related undertaking, is conducting business in such a manner as to jeopardise or prejudice—

(i) monies, securities or other investment instruments or other property held by or controlled by it on behalf of customers, or

(ii) the rights and interests of customers;

(e) that there may be grounds for revoking or not renewing the regulated financial service provider’s authorisation.

(3) The actions referred to in subsection (1) are as follows:

(a) to suspend, for such period not exceeding 12 months as is specified in the direction, any one or more of the following:

(i) the provision of any financial service, or description of financial service, specified in the direction;

(ii) the making of payments to which subparagraph (i) does not relate or any such payments or description of such payments specified in the direction;

(iii) the acquisition or disposal of any assets or liabilities, or description of assets or liabilities, specified in the direction;

(iv) entering into transactions or agreements, or description of transactions or agreements, specified in the direction, or entering into them except in specified circumstances or to a specified extent;

(v) soliciting business from persons of a class specified in the direction;

(vi) carrying on business in a manner specified in the direction or otherwise than in a manner so specified.

Disc: hold shares

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Added 4 weeks ago

EML's affirmation of guidance reeks of desperation to me, while the potential revenue shortfall is concerning the bigger question mark here is the risk of systematic issues with EML's AML/CTF approach in other jurisdictions as well as general governance. We have seen what can happen when these growth companies get too big for their boots (Nuix).

The human capital and resources deployed for this as well as shift of management vision to fix this up makes it a sell for me.

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#Bear Case
Added 4 weeks ago

Was to be expected that EML came crashing down this morning and this has been the case having received correspondence from the central bank of Ireland raising significant concerns about its recent acquisition in Ireland .

Essentially and pursuant to section 47 of the central bank and enforcement act 2013 there is a possibility of which the revoking of this financial services provider authorisation may initiate.

However it is the uncertainty and the unknown that has driven the share price down and I believe there is significant panic selling and believe that the concerns associated with the acquisition in line with regulatory mandates imposed by section 45 may be able to be resolved. Until such a time dialogue and lawyers lock themselves up in the room it will be dark clouds hovering around EML causing share price pressures. 

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#ASX Announcements
Added 4 weeks ago

EML has updated the market regarding the regulatory concerns that triggered the trading halt.  A very large drop in price on opening is indicative, details attached, but it leaves a lot of unanswered questions.

In essence it’s PFS Irish subsidiary which handles European operations has had Anti-Money Laundering / Counter Terrorism Financing issues

What is at stake:

“During the period from 1 January 2021 to 31 March 2021, EML estimates that approximately 27% of EML’s global consolidated revenue (unaudited) derived from programs operating under PCSIL’s Irish authorisation.”

Guidance outside of legal costs and possible fines to do with this remains unchanged.

View Attachment

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#ASX Announcements
Added a month ago

EML in trading halt relating to significant regulatory concerns notified by the Central Bank of Ireland, this relates to the Prepaid Financial Services business that EML acquired on 31 March 2020.

This is not the first time the Prepaid Financial Services business faced regulatory scrutiny, yhis related to an investigation under the Competition Act 1998 into anti-competitive conduct. The two parties ultimately settled the matter with a maximum penalty of 0.92 million pounds.

Unfortunately with the cowboy gun slinging approach of the market of late and until there is further understanding I would expect some short-term to medium term paying for EML payments and would brace for timberrrrrrrrr come Wednesday re trading of EML shares. 

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#ASX Announcements
Last edited a month ago

Oh man. Another of my largest holdings is going to get smashed 

Pursuant to ASX Listing Rule 17.1, EML Payments Limited (ASX:EML), (“EML” or “the Company”) hereby requests a trading halt in its securities prior to commencement of trading on Monday, 17 May 2021.
In accordance with Listing Rule 17.1, EML:
a) Advises that the reason for the trading halt is to facilitate an orderly market in EML’s securities pending an announcement by EML in relation to significant regulatory concerns notified by the Central Bank of Ireland, and received by EML on Friday 14 May 2021, relevant to the Prepaid Financial Services business that EML acquired on 31 March 2020.
b) Requests the trading halt remain until the earlier of:
i. EML releasing an announcement to the market in relation
to regulatory matter; and
ii. The commencement of trading on 19 May 2021
EML anticipates making the above noted announcement prior to the commencement of trading on Wednesday, 19 May 2021.
c) Is not aware of any reason why the trading halt should not be granted or of any other information necessary to inform the market about the trading halt.
Yours sincerely
Sonya Tissera – Isaacs Joint Company Secretary EML Payments 


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#Bull Case
Added a month ago

Not surprising but Com Bank has been buying this company up left, right and center, the bank has increased its holding in EML Payments by ~3.75 million shares from ~18.3 million to ~22.06 million shares. This equates to a 6.1% stake in the company, which is up from 5.06% previously.

UBS. responded to EML's announcement of its recent aquasition by retaining its buy rating and lifting its price target to $6.20.

If it is good enough for the biggest bank in Australia it's certainly provides confidence that this is a bull case 

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#Research report
Last edited 2 months ago

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

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#Sentenial Acquisition
Added 2 months ago

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

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Added 2 months 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 months 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 months 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 months 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 months ago

Valuation detail for EML, see report for full reasoning

View Attachment

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#H1 FY21 Results 17/2/21
Added 4 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 5 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 8 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 8 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 9 months ago

BUY - Intelligent Investor view on EML

View Attachment

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Added 10 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 10 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 10 months ago
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#Business Model/Strategy
Added 12 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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Added one year ago

Positive or Negative thoughts around EML?

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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 2 years ago
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