NED Anthony Hines, who has a good background in the FinTech space, bought $2.93m worth at an average price of 97.6c.

Good sign.

Quite the early Christmas turd for shareholders. Abrupt announcement with not a lot of clarity or context.

Leadership Changes

The Board of EML Payments Limited (EML:ASX) (“EML”) today announces that it has

elected to discontinue Mr Ron Hynes’s employment agreement as Managing Director

and Chief Executive Officer from 21 December 2024 having resolved that alternate

leadership is required to execute the Company’s strategy, EML 2.0. Ron will receive

six months’ notice but will not receive any equity grants given he will not be in

employment on the relevant vesting dates.

The Board and leadership team are wholeheartedly committed to our medium-term

strategy EML 2.0 which was communicated to shareholders and the investment

community at the Company’s 2024 Annual General Meeting on 26 November 2024.

Guidance for FY25 underlying EBITDA in the range of A$54-60m is affirmed.

Executive Chair

Current Independent Non-Executive Chair, Mr. Anthony Hynes will assume the role of

Executive Chair effective 23 December 2024. Anthony brings a wealth of experience

in the operation of successful global payments businesses and has developed a

deep understanding of the EML business over the past six months since his

appointment to the Board on 30 June 2024. Anthony’s remuneration during the

period of his Executive Chair appointment will be A$67,000 per month, inclusive of

his current Chair fee, being the equivalent of the former CEO’s Total Fixed

Remuneration.

Anthony said “Our energised, passionate and broadened leadership team is building

momentum and I’m excited to lend them my further support as we work hard to build

a high-performance culture and make 2025 a formative year for EML. I love the

payments industry having dedicated a significant part of my professional life to it

and the upside for EML following the successful execution of our strategy is

significant.”

Deputy Chair

The Board has appointed Independent Non-Executive Director and Chair of the Audit

and Risk Committee, Mr. Ken Poutakidis as Deputy Chair effective 23 December

2024. Ken is an experienced ASX Director with deep understanding in equity capital

markets and financial services. Ken’s remuneration as Deputy Chair will increase to

$175k per annum in line with EML’s Non-executive Director fee structure as

published in the Company’s 2024 Remuneration Report.

Anthony, together with the leadership team, look forward to sharing progress on EML

2.0 and the FY25 H1 financial results with shareholders at the FY25 Interim results

presentation scheduled for 26 February 2025.

With the sugar hit from high interest rates set to weigh heavily on interest income, it seems the market is taking a dim view of the quality of EML's earnings now, and into the foreseeable future. The share price has copped it quite severely since hitting its highs from earlier in the year.

Is the market missing the forest for the trees in this turnaround story?

Board changes at EML, with the new CEO Kevin Murphy joining as a director, and Conor Haley from Alta Fox Capital stepping down.

I guess the market is concerned about what Alta Fox will do with its stake. Hopefully they stay put to watch the turnaround complete (at a much higher share price too, fingers crossed!).

All the directors of the troubled PFS Card Services subsidiary have resigned. Not often you see that, though in this case it's likely a good thing.

That nobody has mused on the results and subsequent rip in EML today is a sad commentary on this former-market-and-Strawman-darling turned giant turd.

Shares are up as the beats on the headline numbers are sizable relative to the top-end of the guidance provided (revenue and "underlying" EBITDA).

The statutory loss is huge largely due to the impairment of goodwill on both PFS and Sentinel, showing what poor capital allocation decisions those were, but the market seems to be overlooking it.

Technically, while it is encouraging that these sizable gains have been locked for the day, there is plenty of overhead resistance yet to come given all the trapped buyers who were repeatedly copping it last year with disappointment after disappointment, and management upheaval.

I guess investors are stoked that the news isn't worse, and that the regulator isn't revoking PFS's license altogether, but today's reaction still seems overly optimistic. Not that I'm complaining - my piddly holding is that teeny bit more consequential in my portfolio now.

Alta Fox has come out with an announcement explaining their sell down, and stating that they won't be selling any more shares and are committed to holding EML "long-term".

Some reassurance for the troubled company and its shareholders.

Unfortunately, the trading halt seems to be related to a letter they received regarding PFS Ireland from the Central Bank of Ireland.

Given how hairy the issues at this subsidiary have been, I would be very surprised if it was good news.

Alta Fox filed further increase to 10.24% today. I wonder what their endgame is. Unusual for them to take an interest in such a small concern Down Under.

With the amount of negative surprises thrust upon suffering shareholders over the past couple of years, coupled with a wildly volatile share price performance, the bull case is hanging by a thread here. Insider selling prior to these events is not helping either.

The only positive is this is becoming a more attractive takeover candidate after today's large drawdown, but that is cold comfort to longer-term holders who have been underwater at various junctures over the past few years.

Even if the PCS acquisition is written-off completely (worst case scenario), the shares are trading somewhere close to the fair value for the rest of the company after yet another drop on Friday.

The market will not like such a dire outcome immediately, but ultimately there is value looking out long-term - a decent risk/reward proposition.