EML Payments Limited - FY24 Financial Results and Strategic Restructuring
EML PAYMENTS LIMITED (EML) Share Update August 2024 Tuesday 27th
EML Payments Limited Reports Strong FY24 Financial Results Amid Strategic Restructuring
EML Payments Limited (ASX:EML) has released its FY24 financial results, showcasing significant improvements in key financial metrics and successful execution of strategic restructuring initiatives.
Instant Summary:
- Revenue of $217.3 million, up 18% from the previous corresponding period (PCP).
- Underlying EBITDA of $49.0 million, up 34% from PCP.
- Total Group underlying EBITDA of $57.1 million, at the top end of guidance.
- Net loss after tax from continuing core business reduced to $9.6 million from $260.3 million in FY23.
- Successful execution of FY24 structural enhancement program.
- New leadership team appointed to drive future growth.
Financial Performance
EML Payments Limited reported a revenue increase of 18% to $217.3 million for FY24, driven by customer revenue growth and improved treasury yield performance. The underlying EBITDA for the continuing business was $49.0 million, up 34% from the previous year, supported by revenue growth and reduced overhead costs in the second half of the year.
The total Group underlying EBITDA, including PCSIL, was $57.1 million, at the top end of the guidance range of $52 million to $58 million. The net loss after tax from the continuing core business was significantly reduced to $9.6 million, a marked improvement from the $260.3 million loss in FY23.
Strategic Restructuring
During FY24, EML Payments Limited undertook several strategic initiatives to enhance its operational efficiency and focus on growth. Key actions included exiting the loss-making Irish reloadable cards business, PCSIL, and selling Sentenial to GoCardless for €32.75 million (A$54.1 million). The company also successfully concluded the regulatory remediation program for its UK subsidiary, Prepaid Financial Services Limited (PFSL), and lifted its growth restriction.
Additional measures included settling PFS acquisition liabilities on a discounted basis, reducing the cost base by $5.0 million in the second half of the year, establishing a new syndicated loan facility, and rebuilding the management team with the appointment of Mr. Ron Hynes as Managing Director and Group CEO.
Leadership and Future Outlook
EML's new Managing Director and Group CEO, Ron Hynes, highlighted the significant progress made in FY24, describing it as an inflection point for the company. With the structural challenges addressed, EML is now well-positioned to focus on growth and delivering high-quality performance for customers and shareholders in the coming years.
Looking ahead, EML aims to capitalize on the strong foundations laid in FY24 by continuing to optimize its operations, invest in technology, and expand its market presence. The company plans to provide further updates on its strategic direction at the upcoming AGM in November.
The positive financial performance and successful strategic restructuring are likely to boost investor confidence in EML Payments Limited. The significant reduction in net loss and strong EBITDA growth indicate a return to a more stable and growth-oriented environment. The market is expected to respond favorably to these developments, reflecting positively on EML's stock price.
Investor Reaction:
Analysts have responded positively to EML's FY24 results, noting the effective execution of strategic initiatives and improved financial performance. The market reaction has been generally optimistic, with investors expressing confidence in the company's future growth prospects under the new leadership team.
Conclusion:
Investors should continue to monitor EML Payments Limited's progress as it implements its growth strategies and further optimizes its operations. The company's ability to sustain its financial performance and capitalize on new opportunities will be crucial in maintaining investor confidence and driving long-term value.