Why EML’s (ASX:EML) share price fell 26% on ASX today

2 min read | October 31, 2022 12:31 PM AEDT | By Ritwika

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Highlights:

EML declared to temporarily cease onboarding any new customer, agent, and distributor to its UK-based subsidiary, Prepaid Financial Services.

This decision was driven by a few concerns raised by Financial Conduct Authority.

EML’s share price fell 26% on ASX at 10:57 AM AEDT today.

EML Payments Limited (ASX:EML) on Monday announced today that it will temporarily stop adding new customers, agents and distributors to its UK-based subsidiary, Prepaid Financial Services Limited, due to concerns raised by the Financial Conduct Authority (FCA) in the UK.

Followed by this update, EML’s shares began trading in the red territory on Monday morning. The share price fell 26.587% on ASX to AU$0.462 apiece at 10:57 AM AEDT today (31 October 2022).

Details of EML’s latest announcement:

EML said in an ASX filing that this decision by EML Group is expected to impact the company’s revenue and reduce it by AU$5 million in FY23.

However, this decision will also help Prepaid Financial Services to address the concerns raised by FCA. EML said that these concerns resemble the concerns raised by the Central Bank of Ireland and informed about its Ireland-based subsidiary, PFS Card Services Limited. The remediation program for the Irish subsidiary of EML is already under process.

The Prepaid Financial Services Limited, UK, was a part of the company’s PFS Group acquisition strategy in 2020. The acquisition plan also included EML’s business segments in Ireland, France, and Spain.

EML’s UK-based subsidiary’s decision to stop onboarding new customers, agents and distributors will remain in place unless it can satisfy FCA that a remediation plan was executed based on third-party assessment.

Emma Shand, Managing Director, and Group Chief Executive Officer of EML, said:

Key Management Appointments:

Data Source- company announcement dated 31 October 2022

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