Lens on Two Payment Companies of Australia

  • Dec 12, 2019 AEDT
  • Team Kalkine
Lens on Two Payment Companies of Australia

Fintech space include payments as one of its largest segments and is always a stockpile of new technologies. The financial technology related entities keep on upgrading themselves, in the present time. In the contemporary era of digital world, cash payments have reduced considerably and is being replaced by digital payment. With the technology being carried around by everyone in the current time via mobile phone and such, each day would get better with the rise of new fintech payment solutions being introduced to the market.

In the below article we would be looking at the two Australian listed payments companies, Tyro Payments Limited is the fifth biggest merchant acquiring bank by number of terminals in the market, following the 4 major banks in the Australian region. The another one is EML Payments Limited, which has a business presence in Australia, Europe and North America.

Tyro Payments Limited (ASX: TYR)

Tyro Payments Limited (ASX: TYR) is an Australian bank, which operates under the guidance of the Australian Prudential Regulation Authority. Tyro is primarily involved into offering services such as medicare and private health fund claiming, debit, credit, EFTPOS card acquiring, as well as rebating services to the Australian businesses.

TYR provides banking products as well as small business loans to Australian businesses. The market capitalisation of the company stood at $1.69 Bn, as on 12th December 2019.

Contract with DHS

  • The company through a release dated 11th December 2019 announced that Department of Human Services has advised that tender for the provision of Medicare Easyclaim Claiming Services has been recognised as successful. In addition, the company was also advised that that a new contract is being prepared and would be provided to it shortly.
  • The company currently has a contract with DHS with an expiry date of 31st December 2019 for the provision of Easyclaim Claiming Services.
  • Under the terms of the proposed contract, DHS would not pay the company, fee/transaction for Medicare claims processed via the TYR’s terminals.

Financial Performance FY19 and Likely Developments

  • For the year ended 30th June 2019, the company reported net loss amounting to $18.4 million. The company continued to scale up its investment in building its banking business and get on a significant growth program, which included new product design, distribution as well as improved operating systems.
  • At the end of the period, TYR possessed cash and cash equivalents balance stood at $23.9 million. Also, the Total Tier 1 capital at the end of financial year 2019 stood at $75.4 million. The company has always possessed enough capital in order to meet its internal targets, which is above the prudential capital requirements of APRA.
  • The key priorities and strategies for FY20 of the company incudes to focus on continued growth in its payments as well as banking businesses.

Initial Directors Interest

  • The company recently announced that Catherine Mary Harris, one of the directors of the company has 93,735 fully paid ordinary shares, 36,363 fully paid ordinary shares, 164,626 options to acquire fully paid ordinary shares and 106,262 Remuneration Sacrifice Rights, convertible into fully paid ordinary shares.
  • In another update, it was mentioned that Robert Michael Sean Cooke an another director of the company has 221,353 fully paid ordinary shares, 5,504,530 options to acquire fully paid ordinary share, 1,200,000 Liquidity Event Performance Rights to acquire fully paid ordinary shares and 270,583 Remuneration Sacrifice Rights, convertible into fully paid ordinary shares.

The stock of TYR closed the day’s trading session at a price of $3.650 per share on 12 December 2019, with a rise of 7.352% from its previous closing price. The total outstanding shares of Tyro stood at ~496.65 million, and its 52-week low and high is $3.290 and $3.740, respectively.

EML Payments Limited (ASX: EML)

EML Payments Limited (ASX: EML) is involved with the provision of prepaid payment services in Australia, Europe and North America regions.

Addition to S&P/ASX 200

  • Recently, S&P Dow Jones Indices through a release announced that subject to final court approval of the scheme of arrangement, whereby Bellamy’s Australia Limited (ASX: BAL) would be acquired by China Mengniu Dairy Co. Ltd, it would be removing BAL from the Australian benchmark S&P/ASX 200.
  • It was also notified that EML Payments Limited would be replacing Bellamy's Australia Limited effective from 11th December 2019.

Conclusion of Retail Entitlement Offer

  • EML Payments Limited via a release dated 4th December 2019 announced that it has successfully wrapped up the retail component of its fully underwritten one for five pro-rata (non-renounceable entitlement offer).
  • The company has raised an amount of around $93 million from the Retail Entitlement Offer.
  • In the retail entitlement offer, the company witnesses a solid participation from retail shareholders with a take up rate of around 72 percent.

Agreement with Simon Mall Group

  • The company via a release dated 29th November 2019, announced that EML Payments USA, LLC, its fully owned subsidiary has inked a non-exclusive multi-year deal with Simon Property Group. The agreement has been inked for the delivery of multiple payment card products via select Simon shopping malls, as well as business to business distribution channels in the United States.
  • The agreement will be expiring on 14th December 2024. In addition, the programs as per the agreement have not rolled out as of now, but it is anticipated that they would be introducing in ninety days period.

A Quick Look at Financial Performance

  • For the year ended 30th June 2019, the company reported revenue amounting to $97.2 million, experiencing a rise of 37% in comparison to pcp.
  • Gross Debit Volume stood at $9.03 billion, reflecting a rise of 34% in comparison to pcp.

The stock of EML closed the day’s trading at $4.200 per share on 12th December 2019, down 1.639% from its previous closing price. The company has a market capitalisation of $1.39 billion as on 12th December 2019. The total outstanding shares of the company stood at 325.42 million, and its 52-week low and high is $1.195 and $4.840, respectively. The company has given a total return of 13.76% and 50.10% in the time period of 3 months and 6 months, respectively.


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