The EML Payments Ltd (ASX: EML) share price is frozen at yesterday’s closing price of 58 cents.

The company requested a pause in trading pending an announcement before the market open today.

At about 11am, the ASX tech share went into a trading halt at the company’s request. EML shares will remain halted until the earlier of either an announcement or the start of trading on Monday.

Why is the EML share price frozen?

EML requested the halt ” … pending an announcement by EML in relation to a letter received overnight by its Irish subsidiary, PFS Card Services Ireland Limited from its regulator, the Central Bank of Ireland”.

EML’s Irish and United Kingdom businesses face ongoing regulatory issues.

The Central Bank of Ireland has limited EML’s total payment volumes to 10% growth until December. The bank retains the discretion to lift the restriction sooner if EML can get its house in order before then.

The last time EML provided a formal update on its situation in Ireland was on 10 November 2022.

In that statement, EML said material growth cap restrictions would remain in place until the company completed its remediation program and provided satisfactory third-party verification to the central bank.

EML Chair Peter Martin described 2022 as “one of the toughest periods in our history” at the company’s annual general meeting on 25 November.

Martin said:

It is clear that uncertainty about EML’s future prospects has led to a loss of confidence and contributed to the fall in market value.

I’m referring to the continuing regulatory issues in our Irish subsidiary, PFS Card Services, and our UK subsidiary, Prepaid Financial Services, and the related costs.

Despite our genuine efforts, there’s been a lack of clarity about what this means to EML and how we are going about fixing the problems.

What’s the latest news from EML?

The EML share price finished yesterday’s session down 9.4% after the company released its 1H FY23 results.

After an initial 18% share price crash on news of its 95% profit decimation, EML rebounded over the day.

The company’s underlying net profit after tax, adjusted to exclude the non-cash tax-effected amortisation of intangibles and significant non-operating items (NPATA) was $700,000, down 95% on 1H FY22.

The decline is largely due to investment in its transformation strategy and non-cash impairments.

EML wants to become a leading payments provider in four key segments over the next five years. They are human capital management, financial services, retail and gifting, and government.

Its remediation programs in Ireland and the United Kingdom are expected to be completed by the end of December.

The post Here’s why the EML share price is on ice today appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments. The Motley Fool Australia has positions in and has recommended EML Payments. 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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