The EML Payments Ltd (ASX: EML) share price will be on watch on Wednesday following the release of a presentation ahead of its appearance at the Goldman Sachs 4th Annual Virtual Tech Forum.
What was included in EML Payments’ presentation?
As well as providing investors with a breakdown on its performance during an unprecedented FY 2020, the payments company released an update on how its businesses are faring in the new financial year.
Pleasingly, EML Payments has started FY 2021 in a positive fashion. During the first quarter, the company’s gross debit volume (GDV) reached $4.85 billion. This was up 51% on the prior corresponding period and 20% on the fourth quarter of FY 2020.
This led to the company recording revenue of $40.6 million for the quarter, which was a 75% increase on the prior corresponding period and a 20% lift on the previous quarter.
Finally, growing even quicker was its earnings before interest, tax, depreciation and amortisation (EBITDA). EML Payments achieved EBITDA of $10 million, up 215% on the prior corresponding period and 69% quarter on quarter.
Given that the first quarter is historically the company’s weakest quarter of the year, this bodes well for the remainder of FY 2021.
What were the drivers of this growth?
The key drivers of its growth during the first quarter were its General Purpose Reloadable and Virtual Account Numbers (VANS) segments.
The former reported a 16% increase in GDV to $2,389 million thanks to BaaS and Government channels. Whereas the latter experienced a 23% increase in GDV to $2,267 million.
They were supported by a 41% lift in Gift & Incentive GDV to $199 million. Management notes that volumes recovered significantly during the quarter after the initial impacts of COVID-19. Given how this segment is based around shopping gift cards, it notes that the next three months will be crucial for its overall segment results in FY 2021.
No guidance was given for the full year. However, management notes that its full year profits are expected to be split 48%/52% between the first and second halves.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended EML Payments. 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.
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