2021 was a year to forget for the EML (ASX:EML) share price. Here's why

This financial technology company had a turbulent year…

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The EML Payments Ltd (ASX: EML) share price had a shocker of a year in 2021.

Shares in the payment solutions company fell from $4.18 to $3.23 during the course of the year, a fall of nearly 23%.

Let's take a look at how the year played out.

How did EML Payments perform?

The EML Payments share price blasted ahead in the first few months of the year before a dramatic fall in May. Shares in the company then slightly recovered but failed to return to their April glory.

EML's share price rocketed nearly 37% between market close on 31 December 2020 and 30 April 2021.

The biggest spike in this time followed the release of EML's half-year results. Shares in the company soared nearly 17% on February 17. EML Payments reported a 54% spike in group gross debit volume to $10.2 billion. This led to a 61% boost in revenue to $95.3 million. The company's General Purpose Reloadable sector was the key driver of this growth, while its Virtual Account Numbers segment also performed well.

April saw the share price surge again to a yearly high of $5.75 amid acquisition news. EML announced it would acquire Sentenial Limited and its subsidiaries for 110 million euros. Between 1 April and 9 April, the EML share price soared by 17%.

Then came the devastating fall. Between market close on 14 May and 19 May, the EML share price fell from $5.15 to $2.80, a 46% decrease.

Impacting this fall was news the Central Bank of Ireland (CBI) had raised "significant regulatory concerns" with its Irish subsidiary PFS Card Services limited. The company entered a trading halt pending a response to these concerns. The concerns related to the Prepaid Financial Services business it acquired in March 2020. Management informed the market 27% of EML Payments revenue came from this business.

However, between 19 May and 23 September, EML recovered some of this loss. The EML Payments share price rocketed from $2.80 to $4.123 on 6 September, a 47% gain. Outperform broker notes from Macquarie Group Ltd (ASX: MQG) and RBC Capital may have improved investor confidence.

Other positive developments included an update on its acquisition of Prepaid Financial Services and the release of its FY21 results. EML reported record growth including a 60% increase in revenue.

October saw another dramatic fall for the company driven by another update from the CBI. The warning included news of potential action against EML's PFS Card Services. Shares dropped nearly 15% on 8 October on the back of this news.

November saw another major explosion, with shares gaining 31% in one day on 25 November. The share price rocketed higher following yet another update on its dialogue with the CBI. This time, investors were informed the action to be taken would be far less serious than the market expected. EML was given the green light to establish a base and start gaining customers in Ireland.

In December, shares pulled back slightly again. My Foolish colleague James observed this may have been driven by profit-taking from some investors following a strong gain in late November.

EML Payments share price snapshot

On the bright side, as my Foolish colleague Tristan reported this week, broker UBS rates EML Payments as a buy with a price target of $4.40.

The EML Payments share price finished up 3.56% today at $3.20.

This ASX share commands a market capitalisation of nearly $1.2 billion based on its current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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