The EML Payments Ltd (ASX: EML) share price is surging this afternoon after providing a trading update for FY21 Q3.
At the time of writing, the payment solutions company's shares are up 5.8% to $3.53.
What's moving the EML Payments share price?
This afternoon the EML Payments share price has bounced off its lunchtime low of $3.34.
Today's update marks the first peek into the company's performance since the bombshell announcement that led to a 45.6% selloff on 19 May.
As a refresher, the Central Bank of Ireland (CBI) informed EML that it had concerns over the company's PFS Card Services (Ireland) business in relation to Anti-Money Laundering/Counter Terrorism Financing compliance – something that's quite relevant for several ASX-listed companies today.
Regulatory update
According to the release, EML responded to the CBI's letter within the defined deadline. The company maintains a dialogue with the CBI and is providing responses, data, and access to EML's teams.
However, shareholders have been left no better off as to knowing potential decisions and/or timeframes. Addressing the matter, EML Payments has established a project governance structure in Ireland. This includes a subcommittee consisting of board members, executives, and external regulatory consultants.
Furthermore, the company expects one-off legal and advisory fees to be less than $2 million in FY21. Unfortunately, there may be a delay in program launches due to regulatory events.
Third-quarter trading update
Shareholders are absorbing the company's Q3 FY21 update, which contains the likely catalyst for this afternoon's EML share price performance.
The company grew substantially across various metrics compared to the prior corresponding period for the 9 months to March 2021 (unaudited), including:
- Gross Debit Volume (GDV) increasing 52% to $14.9 billion
- Revenue increasing 65% to $143.5 million
- Earnings before interest tax, depreciation, and amortisation (EBITDA) increasing 62% to $43.8 million.
Further fuelling optimism, 368 deals were said to be in the pipeline, 56 of which are in the contract negotiation stage. The company estimates the GDV of its pipeline at maturity is $8.3 billion.
Lastly, EML's acquisition of Sentenial and Nuapay is expected to reach a transaction close depending on approvals in early July to late August.
