EML’s Shares Climbed Up On ASX After Signing Multi-Year Agreement With bet365

  • Apr 23, 2019 AEST
  • Team Kalkine
EML’s Shares Climbed Up On ASX After Signing Multi-Year Agreement With bet365

Payment processing company, EML Payments Limited (ASX: EML) has announced that its wholly owned subsidiary, EML Payments USA LLC, has entered into a multi-year agreement with bet365, largest online sports betting company, for the provision of a bet365 branded Reloadable card program in the state of New Jersey in the United States of America.

Following the release of this news, the share price of the company climbed up by over 11% during the intraday trade (AEST 11:31 AM).

Under the agreement, EML will provide its payment solutions to bet365 customers by giving an easy to use Reloadable card to them so that they could easily transfer funds into their gaming account. It is expected that the initial program will be launched in mid-2019 after getting all the regulatory approvals. This will be the 13th branded reloadable prepaid program in the gaming industry which EML is Managing.

This agreement is a great opportunity for EML to expand its relationship with bet365. As Sports betting is recently legalized, EML has not yet estimated future Gross Debit Volume which will be derived from this program, however, the company expects that the GDV to revenue conversion rate will be materially in line with its average for the General Purpose Reloadable segment with the first material earnings contributions delivered in the second half of FY2020.

In 2019, the company is expecting its revenue to be in the range of $88-94 million and it is expecting its EBTDA to be in between $27-28 million. During the first half of FY 2019, the company reported Gross Debit Volume of $4.15 billion which was 16% higher than the previous corresponding period (pcp).

The company had reported $300m in organic growth from programs in market for more than 12 months and $270 million from programs in market for less than 12 months. It also included the contributions from recently acquired Nordic and Irish subsidiaries.

During the half year period, the company’s Gift & Incentive (G&I) segment performed very well as it reported GDV growth of 42% to $660 million, driven by stable trading conditions in North American malls and rapid growth in Europe from newly launched malls.

During the half year period, the company’s revenue increased by 23% over pcp to $47.2 million. The company reported Revenue growth in all segments with G&I up 49%, GPR up 13% and VANS up 100%. For North American business, the revenue grew by 5% as mall volumes grew by 5% and the impact of moving mall programs to higher interchange BIN ranges yielded results. Further, the group reported EBTDA of $13.74 million for the half year period, due to strong revenue growth driven by organic and acquisitive business development.

In the last six months, the share price of the company increased by 8.41% as on 18 April 2019. At the time of writing, i.e., on 23 April 2019 AEST 11:31 AM, the stock of the company was trading at a price of A$1.950, up by 11.494% during the day’s trade with the market capitalisation of ~A$435.44 million.


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