The Motley Fool

Why the EML Payments share price jumped 8% to a record high today

The EML Payments Ltd (ASX: EML) share price has been a strong performer on Tuesday.

In afternoon trade the payments solutions company’s shares are up 6.5% to $5.20.

At one stage they were up as much as 8% to a record-high of $5.27.

Why is the EML Payments share price surging higher today?

Investors have been buying EML Payments’ shares on Tuesday after it revealed that it has been awarded an agreement with NSW Health.

This agreement will see EML Payments become NSW Health’s provider of branded General Purpose Reloadable card programs for employee Salary Packaging.  The initial term of the agreement is five years, but there is an option for it to be extended by a further two years.

NSW Health will be using the revolutionary EML Salary Packaging technology solution. This allows customers to have multiple benefit accounts which are funded through a single card managed by a virtual wallet. This means that salary packaging participants no longer need to carry a card for every benefit account.

According to the release, once fully transitioned from the incumbent provider to EML, it expects NSW Health to transition approximately 49,000 employees participating in salary packaging to an EML Payments program.

Including this contract, EML Payments expects to provide services to more than 300,000 benefit accounts by April 2022. Further, total annual GDV for the salary packaging vertical is expected to be approximately $2.3 billion once this transition, and programs currently in transition, have been completed.

No changes to its previously announced FY 2020 guidance have been made. This means EML Payments is still aiming for revenue of $116 million to $132 million, EBITDA in the range of $38.5 million to $42.5 million, and NPATA in a range of $26.2 million to $29.4 million.

This compares favourably to revenue of $97.2 million, EBITDA of $29.1 million, and NPATA of $20 million in FY 2019.

Missed these gains? Don't Miss These Top 3 Blue Chip Shares To Buy Now

You’re invited! For a limited time, The Motley Fool Australia is giving away a fantastic FREE report detailing our 3 TOP BLUE CHIP SHARES to buy and own for now and beyond!.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping grossed-up dividend of over 6%! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia has recommended Emerchants Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.