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EML

EML Payments Ltd Experiences Strong Organic And Acquisition Growth

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

EML Payments Ltd (ASX: EML), formerly Emerchants Ltd, is an Australian based payment technology firm focused on providing online payment processes and solutions to businesses. The company is a rapidly growing name in the payment services and fintech sector and participates globally across North America, Europe, and Australia managing some 1,100 payment and loyalty based programs across these three continents. EML payments specialise in providing payment solutions for corporate brands, offering payment technology for gifts, incentives, and reward programs through its in-house mobile, virtual, and physical card system.

EML Payment Ltd - report
Australia’s first ten open banking pioneers revealed (Credit: Which-50)

The firm boasts a competitive advantage over conventional banking channels through faster withdrawal capabilities representing greater profit margins for their associated partners. EML payments operate broadly in this sector managing programs across MasterCard and Visa, as well as digital platforms such as Apple Pay and Samsung Pay. The company cites gaming, salary packaging, as well as gifts and incentives as it’s predominant growth drivers. EML Payments Ltd (ASX:EML) is currently trading at $4.29 per share with a market cap of $1.1 billion, 286% growth since year-to-date.

Business Updates and FY19 Financial Results

One of the primary drivers behind EML Payments considerable growth in 2019 comes from investor interest in the company following strong indications of fiscal growth in its FY2019 report. Revenue was reported at $97.2 million and EBITDA at $29.1 million, representing a rise of 37% and 40% respectively over the previous FY18. Both indicators also reportedly exceeded guidance ranges, adding onto the positive outlook and momentum for EML Payment’s FY20 results. The report also cites it’s planned entrance into the North American sports betting market with Pointsbet and bet365 as growth drivers for the foreseeable five to ten-year period.

Outlook

EML Payments has delivered sound results in FY19 and has plans to grow rapidly in large addressable markets for the foreseeable future. The firm predicts further profit growth from its entrance into the North American gaming market as well as organically through existing programs. It cites these primary growth drivers as expanding markets that are changing with consumer preferences and consequently seeks to innovate and simplify in order to drive success. Further, the FY19 result highlights acquisitions into reward programs are being executed on, and that revenue divisions are moving towards greater divisional balance to avoid reliance on any particular driver.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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