Why are EML (ASX: EML) shares on rise today?

1 min read | January 18, 2024 06:24 PM AEDT | By Team Kalkine Media

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Why are EML (ASX: EML) shares on rise today? — Image source: shutterstock.com

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Today (18 January 2024), shares of EML Payments (ASX: EML) surge by an impressive 22.15%, reaching AU$0.91 apiece. The company announced its decision to withdraw from the PFS Card Services Ireland (PCSIL) business.

According to EML, the PCSIL board has determined that the PCSIL business is no longer commercially viable and sustainable. This strategic move marks the conclusion of a significant period of earnings losses and cash burn for EML stemming from its operations with PCSIL. In light of ongoing losses and the complex landscape of macro and regulatory uncertainties, RBC Capital Markets perceives the exit from PCSIL as the most probable outcome.

The brokerage firm suggests that this exit will afford EML the breathing space to redirect its focus towards other facets of the group. the decision to exit PCSIL is seen as a strategic maneuver to mitigate losses and navigate the challenging economic and regulatory landscape.

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