EML Payments profit climbs 70 per cent

EML Payments profit climbs 70 per cent

Prepaid card solutions provider EML Payments (ASX: EML) saw its profit rise to $16 million in the first half of FY20 while the gross debit volume (GDV) it processed surpassed $6.6 billion.

Almost two thirds of that GDV came from the company's Virtual Account Numbers (VANS) in North America which surged 106 per cent to $4.31 billion.

EML claims GDV is a proxy indicator of customer demand for its payment services. 

The 70 per cent rise in net profit after tax and amortisation (NPATA) does not include a contribution from Prepaid Financial Services (Ireland) Limited (PFS), a major $423 million acquisition now in the final stage of regulatory approvals

The group has also lifted its NPATA guidance for the full year by more than $1 million to $27.5-30.5 million.

Meanwhile, revenue guidance was tightened from $116-132 million to $120-129 million. 

Investors appear to have expected more from the Brisbane-based company, as EML shares were down 8.4 per cent at $5.085 at 11am AEDT.

Group revenue was up 25 per cent at $59.2 million, with the biggest increase coming from the VANS segment with worldwide growth of 174 per cent. 

EML Payments highlights EBITDA growth has exceeded 30 per cent in each of the last three years, with the group well placed for future growth.

In addition to forecasts for continued GDV growth from new and existing programs, the contribution of PFS after the acquisition is complete and improved gross margins from self-issuance in Australia, EML will have an additional 113,000 salary packaging benefit accounts brought under its purview by April 2021 through agreements with Smartgroup and NSW Health.

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