EML investors lose $300 million as profit guidance slashed
EML Payments has downgraded its profit guidance and seen its share price fall by about a third.
EML shares have been slashed after a downgrade
The Brisbane-based financial payments company lost more than $300 million in market value as its share dropped from $2.70 to $1.72.
The company cut its EBITDA guidance for the full year by 8 per cent to $55m.
In an update to the market it said that while its Australian and north American businesses were operating in line with expectations, its European prepaid business was “significantly behind and impacted by remediation activities”.
It said gross profit margins had been impacted by higher COGS (costs of goods sold).
EML said its underlying EBITDA was down 8 per cent year-to-date to $40.3 million and that excluded the $13.6 million in one-off costs associated with the Central Bank of Ireland issue, which related to concerns about the company’s potential exposure to money laundering and terrorism financing.
“We now anticipate continued challenges through the fourth quarter, which has led to the reduction in the guidance range,” EML said.
However, its new inactivity fees were expected to benefit the company through the 2023 financial year.
It also entered the European employee benefits market which coers mean vouchers and employee benefits. The market is worth about $88 billion and is expected to grow by another $20 billion by 2025.
