The EML Payments Ltd (ASX: EML) share price is shooting higher on Tuesday.
In morning trade, the payments company is up 22% to 91 cents following the release of its FY 2023 results.
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EML share price jumps on FY 2023 results
- Revenue up 9% to a record of $254.2 million
- Group underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) down 28% to $37.1 million
- Underlying NPATA down 85% to $4.9 million
- Net loss after tax of $284.8 million
What happened during FY 2023?
For the 12 months ended 30 June, EML reported a 9% increase in revenue to a record of $254.2 million. This was ahead of the company's guidance range of $235 million to $245 million.
This was driven by a 62% increase in gross debit volume (GDV) to $129.6 billion thanks largely to its digital payments segment. It reported a 73% increase in GDV to $115.1 billion, whereas the gifting segment reported a 24% lift to $1.7 billion, and the general purpose reloadable segment recorded a modest 3% rise to $12.8 billion.
There were no records for the company's earnings, with its underlying EBITDA coming in 28% lower year on year at $37.1 million. However, this was better than its guidance range of $26 million to $34 million.
Finally, on the bottom line, EML recorded a whopping $284.8 million loss after tax. However, this is inclusive of an after-tax impairment recognition of $258.9 million in relation to PFS Group and Sentenial Group.
At the end of the period, EML had a cash balance of $71.4 million.
Management commentary
EML's interim CEO, Kevin Murphy, said:
EML has delivered a resilient underlying financial result. Our full year record operating revenue performance of $254.2 million was 4% above the top end of guidance, and underlying EBITDA1 of $37.1 million, was 9% above the top end of guidance. These results underscore the strength of our core business. Today's result has been driven by a number of customer contract improvements and improved yields on our funds float. All three segments GPR, Gifting and Digital Payments showed revenue and gross profit growth on the PCP.
Outlook
No guidance has been provided for the year ahead. However, management intends to provide the market with an update on its ongoing strategic review no later than its annual general meeting in November.
In the meantime, its initial thoughts on the review include the following:
An initial outcome of the strategic review has informed the Board's decision to separate the profitable UK domiciled business PFSL, from the unprofitable Irish domiciled European business in order to improve performance and unlock value
After today's strong gain, the EML share price is now in positive territory on a 12-month basis.
