Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

EML Payments has entered into an agreement to settle all the outstanding deferred consideration payments relating to the acquisition of Prepaid Financial Services Group (PFS) for £15.0m/A$28.8m, which represents a £7.9m/A$15.2m discount to the originally agreed amount. This agreement concludes all outstanding actual and potential liabilities relating to the PFS acquisition in 2020. Combined with the agreed sale of Sentenial for A$54m, this substantially strengthens EML’s balance sheet and simplifies the group’s structure.

EML Payments has entered into an agreement to settle all the outstanding deferred consideration payments relating to the acquisition of Prepaid Financial Services Group (PFS) for £15.0m/A$28.8m, which represents a £7.9m/A$15.2m discount to the originally agreed amount. This agreement concludes all outstanding actual and potential liabilities relating to the PFS acquisition in 2020. Combined with the agreed sale of Sentenial for A$54m, this substantially strengthens EML’s balance sheet and simplifies the group’s structure.

EML Payments - Cutting the final link to PFS vendors

EML Payments has agreed to sell Sentenial to GoCardless for an enterprise value of €32.75m/A$54.1m. As Sentenial is currently loss-making, the disposal will be earnings and cashflow accretive to EML in year one. Proceeds from the sale will be used to reduce debt and strengthen EML’s balance sheet. This disposal combined with the liquidation of PFS Card Services Ireland (PCSIL) leaves EML as a more focused group specialising in prepaid cards, with all remaining businesses profitable and cash generating.

EML Payments has agreed to sell Sentenial to GoCardless for an enterprise value of €32.75m/A$54.1m. As Sentenial is currently loss-making, the disposal will be earnings and cashflow accretive to EML in year one. Proceeds from the sale will be used to reduce debt and strengthen EML’s balance sheet. This disposal combined with the liquidation of PFS Card Services Ireland (PCSIL) leaves EML as a more focused group specialising in prepaid cards, with all remaining businesses profitable and cash generating.

EML Payments reported good growth in revenue and underlying EBITDA in H124, mainly due to the benefit of higher interest income. Management’s focus has been on the underperforming PCSIL General Purpose Reloadable (GPR) business, now in liquidation, resulting in the cost cutting programme shifting to H224. With that obstacle removed, management can now shift its sights to growing the remaining Gifting and GPR businesses and rightsizing the cost base.

EML Payments reported good growth in revenue and underlying EBITDA in H124, mainly due to the benefit of higher interest income. Management’s focus has been on the underperforming PCSIL General Purpose Reloadable (GPR) business, now in liquidation, resulting in the cost cutting programme shifting to H224. With that obstacle removed, management can now shift its sights to growing the remaining Gifting and GPR businesses and rightsizing the cost base.

EML Payments - Looking to a brighter future

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>With two days left in the review period, there could be 28 adds/deletes across the S&amp;P/ASX family of indices in March.</li>
<li>There is nearly A$1bn to sell in <a href="https://www.smartkarma.com/entities/newmont-corp" target="_blank" data-smartkarma-citation="entities:40416:1" rel="noopener">Newmont (NEM AU)</a> due to the potential S&amp;P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.</li>
<li>There could be 2-41 days of ADV to buy in the index inclusions while the impact on the deletions will range between 0.7-24 days of ADV.</li>
</ul>


With two days left in the review period, there could be 28 adds/deletes across the S&amp;P/ASX family of indices in March.
There is nearly A$1bn to sell in Newmont (NEM AU) due to the potential S&amp;P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
There could be 2-41 days of ADV to buy in the index inclusions while the impact on the deletions will range between 0.7-24 days of ADV.


S&P/​​​​​​​​​ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell

As part of its strategy to focus on profitable, cash-generative businesses, the boards of EML Payments and PFS Card Services Ireland Limited (PCSIL) have decided to wind down the PCSIL business. This removes a source of considerable cash burn and management distraction and leaves the group better positioned to support the Gifting and the Australian and UK General Purpose Reloadable (GPR) businesses. The strategic review is ongoing and management noted it had received several expressions of interest for Sentenial. FY24 guidance given in November is maintained despite the PCSIL liquidation. We have revised our forecasts to reflect the November trading update and the PCSIL liquidation, upgrading our underlying EBITDA forecasts by 14.9% in FY24 and 6.0% in FY25.

As part of its strategy to focus on profitable, cash-generative businesses, the boards of EML Payments and PFS Card Services Ireland Limited (PCSIL) have decided to wind down the PCSIL business. This removes a source of considerable cash burn and management distraction and leaves the group better positioned to support the Gifting and the Australian and UK General Purpose Reloadable (GPR) businesses. The strategic review is ongoing and management noted it had received several expressions of interest for Sentenial. FY24 guidance given in November is maintained despite the PCSIL liquidation. We have revised our forecasts to reflect the November trading update and the PCSIL liquidation, upgrading our underlying EBITDA forecasts by 14.9% in FY24 and 6.0% in FY25.

EML Payments - Major source of losses stemmed

Australia

EML Payments Limited is a financial services company that specializes in pre-paid financial cards.

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EML Payments Limited (EML AU)

EML Payments - Cutting the final link to PFS vendors

EML Payments has entered into an agreement to settle all the outstanding deferred consideration payments relating to the acquisition of Prepaid...

Edison Investment Research

EML Payments - Sale of Sentenial agreed

EML Payments has agreed to sell Sentenial to GoCardless for an enterprise value of €32.75m/A$54.1m. As Sentenial is currently loss-making, the...

Edison Investment Research

EML Payments - Looking to a brighter future

EML Payments reported good growth in revenue and underlying EBITDA in H124, mainly due to the benefit of higher interest income. Management’s focus...

Edison Investment Research

S&P/ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell

There could be 28 adds/deletes across the S&P/ASX family of indices in March. Newmont will have around A$1bn to sell. Shorts have been soaring on...

Brian Freitas

EML Payments - Major source of losses stemmed

As part of its strategy to focus on profitable, cash-generative businesses, the boards of EML Payments and PFS Card Services Ireland Limited...

Edison Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

EML Payments - Cutting the final link to PFS vendors

EML Payments has entered into an agreement to settle all the outstanding deferred consideration payments relating to the acquisition of Prepaid...

Edison Investment Research

EML Payments - Sale of Sentenial agreed

EML Payments has agreed to sell Sentenial to GoCardless for an enterprise value of €32.75m/A$54.1m. As Sentenial is currently loss-making, the...

Edison Investment Research

EML Payments - Looking to a brighter future

EML Payments reported good growth in revenue and underlying EBITDA in H124, mainly due to the benefit of higher interest income. Management’s focus...

Edison Investment Research

S&P/​​​​​​​​​ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell

There could be 28 adds/deletes across the S&P/ASX family of indices in March. Newmont will have around A$1bn to sell. Shorts have been soaring on...

Brian Freitas

EML Payments - Major source of losses stemmed

As part of its strategy to focus on profitable, cash-generative businesses, the boards of EML Payments and PFS Card Services Ireland Limited...

Edison Investment Research

S&P/ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell