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EML Payments Limited (ASX:EML), a company from the information technology sector which is into the business of issuing pre-paid financial cards, has announced its half-yearly results for the period ended 31 December 2018.
During the period, there was an increase in the Groupâs Gross Debit Volume (GDV) by 16% to $4.15 billion as compared to its prior corresponding period. The Groupâs revenue increased by 39% to $47.2 million. There was also an increase in the Groupâs EBITDA by 50% on the pro-forma basis on the prior comparative period. The period reported an operating cash inflow of $17 million. EML remained debt free by the end of the period with net cash in hand worth $50.1 million. [optin-monster-shortcode id="swikrbu1d9j9aq0o4cko"]
Proprietary processing platforms drove the growth in the gross debit volume. The increase in GDV was the outcome of organic growth from programs in the market for more than 12 monthsâ worth $300 million and another $270 million through programs in the market for less than 12 months. The acquisition of Nordic and Irish subsidiaries also contributed to the growth of GDV.
The Gift & Incentive (âG&Iâ) segment of the company performed well. As a result, the GDV increased by 42% to $660 million. The driving factor of the Gift & Incentive segment was stable trading conditions in the malls in North America as well as rapid growth of newly launched malls in Europe. With this, the Group launched programs in more than 100 malls during the period.
The General Purpose Reloadable (âGPRâ) segment reported a fall in the revenue by 24% to $1.39 billion. The fall in the revenue under this segment was due to the decline in volume from one of the companyâs client LuLaRoe by more than $500 million down on the prior corresponding period. This decline got compensated by the gaming and salary packaging verticals which performed strongly during the period.
Through the LuLaRoe program, the revenue contribution was relatively small towards GDV as the business is a low margin business. However, the loss in the GDV volume through the LuLaRoe program got compensated by an increase in GPR revenue as well as the margin of other sources.
In the 1H FY2019, the company had signed new contracts, implemented new programs and was also engaged in product development.
First Sports Gaming Card in the US
The company had signed the first General Purpose Reloadable contact with Pointsbet for legalized sports betting industry in New Jersey, USA. The contract was announced in November 2018, and it got launched in January 2019.
Growth in Salary Packaging
The company, during the period, undertook continued efforts towards increasing the penetration of the salary packaging vertical in Australia.
ECE Launch:
In October 2018, the Group completed the launch of ECE in Germany which is the largest owner and operator of shopping malls in the country with 90 malls under management.
Acquisition of PerfectCard
The company on 4 July 2018, acquired PerfectCard Group which is an Ireland based company and is the first authorized eMoney institution and a FinTech company which provides incentive gift cards as well as the corporate expense solutions.
Pays Technology Launched:
The company launched new mobile-based products using the Pays technology in Australia. Through this, the clients of the company could instantly reach their customers along with the global pipeline of opportunities for this innovative product.
Stock performance
In the last six months, the stock has generated a negative return of 13.50%. However, in the previous one month, the stock has generated a return of 10.56%.
By the closure of the trading session on 27 February 2019, the closing price of the share was A$1.640, up by 4.46% as compared to the previous trading dayâs closing price. The company has a market capitalization of A$392.82 million with approximately 250.2 million outstanding shares and a PE ratio of 174.440x.
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