The EML Payments Ltd (ASX: EML) share price has surged higher today after the company released its results for the 2019 financial year (FY19) this morning. EML shares closed at $3.13 yesterday but opened at $3.39 this morning and are trading for $3.40 at the time of writing – a rise of 8.81%.
What did EML report this morning?
EML reported a strong set of numbers in its report this morning. Here is a summary:
- Revenue came in at $97.2 million – a rise of 37% over FY18 and representing a Compound Annual Growth Rate (CAGR) of 61% over the past five years. This exceeded the previous guidance of $88-94 million.
- Earnings (EBITDA) came in at $29.1 million – a rise of 40% and representing a CAGR of 82% over the past five years. This exceeded the previous guidance of $27-28 million.
- Gross Debit Volume (GDV) of $9.03 billion – a rise of 34%
- Net profit after tax was $8.45 million, up 283% from FY18's $2.21 million
- Equity growth of 11% to $144.23 million
- Underlying cash flow of $22.1 million with cash on hand sitting at $33.1 million – a fall of 15%
EML noted the successful acquisition and integration of PerfectCard DAC and Flex-e-Card. Acquisitions made up 32% of EBITDA growth for the year, with the remaining 68% hailing from organic growth. With the acquisition of Flex-e-Card, EML has now entered the UAE and Polish markets, taking the total number of countries the company is operating in to 23.
Turning to revenue, EML reports that 87% of revenue generated in FY19 ($84.6 million) was from recurring revenue streams, which is up 26% from FY18. Brokerage fees as a proportion of revenue fell from 37.2% in FY18 to 32.8% in FY19.
The fall in Cash & Cash Equivalents (of 15%) was attributable to the acquisitions of Flex-e-Card and PerfectCard, which was also assisted by a new debt facility with a "major domestic bank".
Outlook
Whilst the company has not given specific guidance for FY20 in today's results, EML has stated that they expect to see continued GDV growth for FY20 on the back of FY19's momentum, assisted by the launch of Pointsbet in January 2019 and the coming launch of bet365 in the US in the coming months. No dividends will be paid for FY19 nor are in the outlook for FY20.
