At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is well and truly out of form and sinking lower. The benchmark index is currently down 1.7% to 6,945.2 points.

Here’s what is happening on the market today:

Appen restructure

The Appen Ltd (ASX: APX) share price is charging higher today after announcing a new organisational structure. The new structure is aligned to its product-led and customer-centric strategy. Management notes that the changes reflect Appen’s evolution from being the leading provider of artificial intelligence (AI) data annotation services to the provider of a broad range of AI data annotation products and solutions that unlock growth in new markets. In addition to this, management reaffirmed its guidance for FY 2021.

EML Payments shares to return

The EML Payments Ltd (ASX: EML) share price is crashing lower today after returning from its trading halt. Investors have been selling the payments company’s shares after the Central Bank of Ireland raised concerns over its PFS Card Services Ireland business. These concerns relate to PFS Card Services Ireland’s Anti-Money Laundering/Counter Terrorism Financing (AML/CTF), risk and control frameworks, and governance. Management notes that 27% of its revenue goes through this business.

Webjet full year results

The Webjet Limited (ASX: WEB) share price is trading lower today after the release of its full year results. The online travel agent recorded total transaction value (TTV) of $453 million and revenue of $38.5 million in FY 2021. And despite cutting its expenses materially, Webjet posted an underlying loss of $88.8 million. One positive, though, was that management revealed that its performance improved greatly in April.

Best and worst ASX 200 performers

The best performer on the ASX 200 today has been the Appen share price with a 12% gain. This follows its restructure update. Going the other way, the worst performer has been the EML Payments share price with a massive 37% decline following its AML/CTF update.

More reading

• Why the EML Payments (ASX:EML) share price is crashing 52% lower
• Webjet (ASX:WEB) share price lower after FY 2021 results
• Appen (ASX:APX) share price on watch with restructuring
• Data shows millennials love investing in ASX ETFs
• 5 things to watch on the ASX 200 on Wednesday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended EML Payments. 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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The cash brokering entity of Macquarie Group Ltd (ASX: MQG), Macquarie Securities (Australia) Limited, has paid a $126,000 fine to the Australian Securities and Investment Commission (ASIC).

The infringement notice was handed down yesterday after Macquarie Securities was found to have failed to follow its clients’ instructions during a share buy-back.

This is the fifth time ASIC has fined Macquarie Securities. Let’s take a closer look at what the brokering entity did.

Problematic preferencing

ASIC’s market disciplinary panel (MDP) announced yesterday that Macquarie Securities broke its rules by “entering into a market transaction that was not in accordance with [its] client’s instructions”.

According to the panel, Macquarie Securities purchased 1.2 million shares for $2.46 apiece on ASX Centre Point as part of a buy-back. It said that, in fulfilling the transaction, the company used a preferencing bid against its client’s wishes.

ASX Centre Point is a “dark market”, an anonymous mid-point matching system operated by the ASX. Traders on ASX Centre Point must place their orders in an order book where information on upcoming transactions is not publicly available before the orders are matched with trades.

In this instance, Macquarie Securities placed a preference on its client’s buy-back bid, meaning its order would be filled ahead of others. The preference resulted in the order being filled ahead of two priority sell orders.

However, the client’s instructions were to complete the buy-back during the “ordinary course of trading”. Therefore, Macquarie Securities’ preferencing of the ASX Centre Point order went against their wishes.

The ASIC panel described stated the company’s prioritisation of its buy-back orders as “careless”.

This is Macquarie Securities’ fifth fine from ASIC, although it’s the first time the watchdog has fined the company for not following its clients orders.

The broker isn’t the only entity to be caught up in poor behaviour during buy-back exercises.

Previously, the MDP has sanctioned UBS Securities Australia Ltd and Credit Suisse Equities (Australia) Ltd for their conduct during on-market buy-backs.

More reading

• 2 ASX shares I hold that I’d still buy more of: fundie
• Up 8% this week, brokers are bullish about the Aristocrat (ASX:ALL) share price
• Here’s why the Macquarie (ASX:MQG) share price sank 5% today
• Is there more upside to the CBA (ASX:CBA) share price following recent results?
• Why the Nuix (ASX:NXL) share price just hit its lowest level ever

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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The Helloworld Travel Ltd (ASX: HLO) share price is back where it started today after the company made two positive announcements this morning. They include a contract extension with the Australian Government and a trading update for the March quarter. 

After opening 1.47% higher at $1.73, the Helloworld share price has retreated back to yesterday’s closing price of $1.705.

What did Helloworld announce?

Government contract extension

Helloworld advised that the Government’s Department of Finance has exercised its option to extend its travel management services with QBT Pty Ltd, a wholly-owned subsidiary of Helloworld.

The company will continue to provide its services for the Australian government for the one-year period from 1 July 2021 to 30 June 2022.

Business update 

Helloworld also advised today that its business was experiencing a strong recovery across all its corporate businesses. These include QBT, TravelEdge, Show Travel and APX in New Zealand. 

The update highlighted a 580% increase in April corporate total transaction values (TTV) on the previous year, but still down around 45% on 2019. The uptick in volume was underpinned by consistently open borders across both sides of the Tasman. 

This represents a significant improvement from what was previously reported in its February half-year results. The results indicated that its corporate Australian operations were running at 42% of prior year TTV, while New Zealand TTV was running at 29% prior year levels. 

Helloworld also highlighted that its New Zealand-based retail and wholesale businesses are experiencing a surge in bookings following the announcement of the Cook Islands bubble. 

Despite the significant rebound in New Zealand operations, this segment reflects approximately 13% of group TTV based off FY20 figures. The Australian segment accounts for a majority, or 85% of the group’s $5 billion FY20 TTV. 

Why is the Helloworld share price down to 7-month lows? 

The Helloworld share price has shed almost half its value from a high of $3.20 in late November 2020 to $1.705 today. 

Depressed ASX travel shares surged in late November last year following COVID-19 vaccine trial updates from Pfizer. The positive updates and implications for the travel industry sent the Helloworld share price surging 75% from $1.88 to $3.20 between 9 November and 25 November. 

However, this situation might reflect too much optimism before any positive financial or operational benefits materialise. With domestic travel only recently picking up, but still down on 2019 figures, and international travel at a standstill, the Helloworld share price has possibly drifted lower without any new catalysts.

Helloworld peers including Flight Centre Travel Group Ltd (ASX: FLT) and airlines such as Qantas Airways Limited (ASX: QAN) are also trading at similar price levels compared to November last year. 

More reading

• These are the 10 most shorted shares on the ASX
• Brokers name 3 ASX shares to buy now
• The Sydney Airport (ASX:SYD) share price slumped 5% today. Here’s why
• Why Ausnet, Qantas, Suncorp, & Sydney Airport shares are tumbling lower
• Here’s why the Qantas (ASX:QAN) share price is sinking today

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Helloworld Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Helloworld 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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The Laybuy Holdings Ltd (ASX: LBY) share price has returned from its trading halt and is tumbling lower.

In late morning trade, the buy now pay later (BNPL) provider’s shares are down 15% to 58 cents.

Why is the Laybuy share price sinking?

The Laybuy share price has come under pressure today after it announced the successful completion of a $35 million capital raising.

According to the release, the company raised the funds from new and existing institutional and sophisticated investors at a massive 26.5% discount of 50 cents per new share.

Laybuy will now seek to raise a further $5 million via a share purchase plan at the same price.

Why is Laybuy raising funds?

The proceeds of the capital raising are to be invested in technology, marketing, and people to accelerate Laybuy’s growth in the UK market.

Laybuy’s Managing Director, Gary Rohloff, commented: “The opportunity in the UK market should not be underestimated. The UK has a retail market approximately 2.2 times larger than the Australian market in terms of overall spending. It is also a market where a higher proportion of retail spending is online, and where BNPL is still in early stages of adoption,”

“Laybuy is already widely recognised as one of the UK’s leading BNPL providers, with consumers spending more than £151 million through Laybuy in the past year, up 504% on prior year. This capital raise is an important step for Laybuy, enabling the company to continue its strong momentum and to capitalise on the significant growth opportunity in the UK market. We believe this will maximise shareholder value in the longer term,” Mr Rohloff added.

Strategic Partnership

In addition to the capital raising, Laybuy announced that it is entering into strategic partnerships with Rakuten, AWIN and Sovrn.

According to the release, these partnerships will see Laybuy customers having access to over 5,000 merchants in the UK. This includes major brands ASOS, Nike, Marks & Spencer, Amazon and eBay.

Furthermore, these partnerships will enable customers to use Laybuy’s Tap to Pay digital card with these merchants. This allows users to pay with Laybuy both online and in-store without further merchant integration or direct relationships.

While this is a positive, it hasn’t been enough to stop the Laybuy share price from sinking today.

More reading

• Why is the Laybuy (ASX:LBY) share price frozen today?
• Laybuy (ASX:LBY) share price slides despite key UK appointment
• Why is the Zip (ASX:Z1P) share price down 11% so far this month?
• The Afterpay (ASX:APT) share price breaks below $100
• Laybuy (ASX:LBY) share price slides despite ‘record Mania sales’

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The Cettire Ltd (ASX: CTT) share price is climbing in early morning trade. This follows the luxury online retailer’s announcement of a new partnership agreement.

Headquartered in Victoria, Cettire is Australia’s largest luxury e-commerce website that offers an extensive range of men’s and women’s clothes. The company sells famous international branded products from Prada, Gucci, Saint Laurent, Fendi, Dolce and Gabbana, and more.

At the time of writing, Cettire shares are swapping hands for $1.86 apiece, up 8.14%.

Cettire expands offering

According to this morning’s release, Cettire advised it has teamed up with leading global buy-now-pay-later (BNPL) provider, Klarna.

Founded in 2005, Klarna is a Swedish-based fintech company that allows customers with flexible shopping and payment options. The business has over 90 million active customers, with onboard merchants totalling 250,000. On a daily average, Klarna sees more than 2 million transactions on its platform.

Under the deal, Cettire will provide its customers shopping in Australia and United States Klarna’s BNPL services. The enhanced offering is targeted at giving customers greater flexibility when paying for products.

While the rollout will no doubt entice new and existing customers, Cettire did not provide a launch date.

Comments from the CEO

Cettire founder and CEO, Dean Mintz commented:

Consumers expect convenient and flexible shopping online. Klarna is uniquely placed to meet the continued accelerated demand that Cettire is experiencing online across multiple geographies.

Klarna will continue to enhance Cettire’s value proposition and further improve our customer experience through added convenience, flexibility and control. Further, by directly accessing Klarna’s large and expanding consumer network of 17 million shoppers in the US and 0.8 million shoppers in Australia, we look forward to introducing Cettire to a new audience of passionate luxury consumers.

Cettire share price snapshot

Since listing in December at a price of 50 cents, Cettire shares have continued its amazing run. Year-to-date performance stands at a gain of close to 280% in less than 6 months of trading.

Based on today’s prices, Cettire has a market capitalisation of roughly $674 million, with approximately 381 million shares on issue.

More reading

• Top brokers name 3 ASX shares to buy today
• 56% of Aussies think Elon Musk invented Bitcoin
• United Malt Group (ASX:UMG) share price jumps on half-year results
• What’s happening with the Infratil (ASX:IFT) share price?
• Why the EML Payments (ASX:EML) share price is crashing 52% lower

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cettire 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

James Hardie Industries plc (ASX: JHX)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this building materials company’s shares to $50.00. This follows the release of its fourth quarter and full year results earlier this week. James Hardie’s profits came in ahead of Macquarie’s expectations, thanks largely to its performance in Europe and the Asia-Pacific markets. The broker was also pleased with the company’s margin targets. It believes this is a strong sign that management is confident in its ability to manage cyclical variability. The James Hardie share price is currently fetching $40.91.

Nuix Ltd (ASX: NXL)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $7.50 price target on this analytics company’s shares. This follows Nuix’s investor briefing on Tuesday. Overall, the broker came away from the event feeling positive about the industry and its future. Though, it acknowledges that the market may take time to become as confident due to its guidance downgrades and uncertainty over future growth rates. The Nuix share price is trading at $3.69 on Wednesday.

St Barbara Ltd (ASX: SBM)

Analysts at Goldman Sachs have retained their buy rating but trimmed their price target on this gold miner’s shares to $3.00. According to the note, the broker remains positive on St Barbara despite its “unsurprising” guidance downgrade this week. Goldman likes St Barbara due to the significant discount that its shares trade at compared to its peers and its positive growth outlook. In respect to the former, it notes that it trades at 0.5x net asset value (NAV) compared to the sector average of 0.75x NAV. The St Barbara share price is fetching $1.77 this morning.

More reading

• ASX 200 rises, Nuix jumps, James Hardie drops
• Why Aristocrat Leisure, Creso Pharma, Nuix, & Resolute are charging higher
• Nuix (ASX:NXL) share price gains 12% on signals of accountability
• ASX 200 up 0.6%: James Hardie Q4 update, St Barbara sinks, Nuix jumps
• St Barbara (ASX:SBM) share price crashes 10% on guidance downgrade

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended Nuix Pty Ltd. 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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It seems Australians are very much interested in Bitcoin (CRYPTO: BTC) but don’t know a whole lot about it.

Comparison site Finder conducted a survey this month that showed 25% of Aussies will either own or plan to own cryptocurrency by the end of this year. But 20% don’t know how to buy it.

And remarkably, 56% falsely believed Tesla Inc (NASDAQ: TSLA) chief executive Elon Musk invented Bitcoin.

Bitcoin was in fact created by an anonymous developer with the alias Satoshi Nakamoto.

Nakamoto’s identity has been the topic of furious debate in the past decade. Some, like Australian academic Craig Wright, have claimed they are the real Nakamoto — but no contender has entirely convinced the crypto community.

Musk denied he was Sakamoto in a tweet back in 2017.

8 myths about Bitcoin that Aussies believe in

The Finder study also found many other misconceptions that Australians believed regarding Bitcoin.

Here are the 7 biggest ones other than the ‘Elon Musk inventor’ theory:

“Bitcoin is not taxed”

The majority of Aussies (59%) think this, even though cryptocurrency profits are taxed as either income or capital gains — like any other asset.

“There’s an unlimited number of Bitcoins to be mined”

Programmatically, Bitcoin is limited to a maximum pool of 21 million, but 44% of Australians think there is an infinite source. 

According to Finder, there are currently about 18.6 million in circulation. While there are many active miners at the moment, due to technical reasons experts don’t expect to hit the 21 million cap until the next century.

“Bitcoin has been around for more than 15 years”

Not quite. While 44% of Aussies believe this, the cryptocurrency was first distributed in 2009. It was the first-ever implementation of blockchain database technology, and sold for a fraction of a cent initially.

It’s now worth $55,552.

“There are fewer than 100 cryptocurrencies”

Thanks to the explosion in popularity over the past 4 years, many different cryptocurrencies have been developed. There are now more than 4,000 currencies in circulation, according to Finder, and this number is growing weekly.

The second most prominent cryptocurrency, Ethereum (CRYPTO: ETC), has been on fire lately. A Bezinga survey this week found investors thought it would actually outperform Bitcoin through this year.

“One Bitcoin is worth more than $100,000”

Bitcoin’s value has surged in the past 5 years — it was just $600 in May 2016. But it hasn’t quite reached six figures yet. The highest it has been was around $83,000 earlier this year.

“You can’t buy things with Bitcoin”

Although Musk opened up Tesla to accept Bitcoin earlier this year then withdrew that capability just last week, there are still many businesses that will accept it.

There are even Australian services like Living Room of Satoshi that allow you to receive a portion of your salary as Bitcoin.

“There are physical Bitcoins”

Even though 22% of Australians believe there are Bitcoin coins or notes, this is entirely false. The currency exists exclusively in digital form using blockchain technology.

More reading

• Here are the US shares ASX investors were buying last week
• If Bitcoin investing isn’t risky enough for you, try this
• 3 explosive shares that defy PE ratios
• Bitcoin’s next step forward aims to address adoption hurdles
• Why these 3 experts aren’t worried about the tumbling Bitcoin price

Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The United Malt Group Ltd (ASX: UMG) share price is on the rise today. At the time of writing, shares in the agribusiness are selling at $4.50 – up 1.81%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is a massive 1.52% lower.

Today’s price increase comes after the company released its half-year results for the 6-months ending 31 March 2021.

Let’s take a closer look at today’s report.

Half-year update

In a release to the ASX, United Malt disclosed net profit after tax was down an astonishing 54% on the prior corresponding period (pcp) to $13.2 million. Revenue was 11% lower than the pcp at $589.6 million. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 32% on the pcp to $52.7 million.

Earnings per share (EPS) plunged 41% to 4.4 cents. The company will pay an interim dividend of 2 cents per share, unfranked. That’s down 49% from the final dividend paid in December last year. Net debt also increased to $344.1 million from $261.7 million on 30 September 2020

Despite the slide in profits, United Malt says today’s results are still higher than the earnings guidance released at its AGM. This is presumably why the United Malt share price is lifting today.

In another statement, the company attributed today’s lower numbers to the effects of COVID-19 lockdowns and the prior results being announced when it was not a standalone ASX-listed business. GrainCorp Ltd (ASX: GNC) spun off United Malt Group in March last year. In addition, it says its margins were also affected by an increasing Australian dollar and higher freight and shipping costs compared to the pcp.

Looking forward, United Malt says it expects sales volumes to still be below pre-COVID levels. The company attributes this to the high uncertainty that still exists in the northern hemisphere regarding the pandemic. 

Management commentary

Speaking on today’s results, United Malt Managing Director and CEO Mark Palmquist said the following:

Continued COVID-19-related lockdowns in our key markets of North America and the UK affected volumes and mix during the half from the ongoing effects of the reduction in on-premises alcohol consumption.

As we foreshadowed at the AGM, the lockdown impacts on volume and mix, together with the effects of the higher Australian dollar during the period and one-off costs affected the first half result.

While we are seeing emerging signs of reopening in some of our key markets, we remain prepared for the varying impact of the pandemic on customer demand, supply chains and our operations in the short term.

At the same time, we continue to implement our strategy to strengthen the business to capitalise on growth opportunities and sustainability priorities over the medium term.

He added that planned initiatives by the company should result in around $30 million of annualised benefits.

United Malt share price snapshot

Over the past 12 months, the United Malt share price has increased by around 11%. Over the last 3 months, however, it has increased by an even greater 21%.

Given its current valuation, United Malt has a market capitalisation of approximately $1.3 billion.

More reading

• 2 sleeping ASX shares ready to break out

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The Infratil Ltd (ASX: IFT) share price is slipping today, down 0.3% in morning trade as the wider S&P/ASX 200 Index (ASX: XJO) is down 1.7%.

Below we take a look at the infrastructure investment company’s full year results for the year ended 31 March.

What full year results did Infratil report?

Infratil’s share price is slipping despite the company reporting an increase in proportionate earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF).

Proportionate EBITDAF from continuing operations climbed to NZ$398.8 million (AU$369.3 million) for the year, up from NZ$370.2 million from the previous year.

(Proportionate EBITDAF shows Infratil’s operating costs and its share of the EBITDAF of the companies it has invested in. It excludes discontinued operations and management incentive fees.)

Infratil said that COVID had negatively impacted its Wellington Airport and Vodafone New Zealand assets. But this was mitigated by 25% growth in its CDC Data Centres earnings.

Unrealised energy derivative losses at Trustpower and increased management incentive fees drove Infratil’s share of the net loss for the year to NZ$49.2 million. The company said this reflects valuation increases not recognised for accounting purposes.

Acquisitions and investments

Over the full year Infratil and its portfolio businesses invested NZ$250 million in digital infrastructure and technology, NZ$590 million in renewable energy, and NZ$310 million for the acquisition of 56.25% of Australian based Qscan Group to initiate a new diagnostic imaging platform.

Following the acquisition of Qscan, Infratil announced it had also entered into an unconditional agreement to acquire 53.5–58.5% of Pacific Radiology. The cost will be in the range of NZ$312–344 million.

Commenting on the acquisitions, Infratil CEO Jason Boyes said:

[The acquisitions] create a meaningful Australasian healthcare platform with a number of potential synergies and adjacent opportunities. The purchases also confirm our continuing confidence in thematics which are driving our capital allocation in communications and digital infrastructure, decarbonisation, and aging populations.

Infratil reported it will have net cash of more than NZ$1 billion for investment following the acquisition of Pacific Radiology and receipt of the Tilt Renewables Ltd (ASX: TLT) sale proceeds.

Returns and dividends

Infratil reported “total shareholder return for the year was 91.9%, comprising 4.3% after tax dividend return and 87.6% capital gain, including the rights issue”.

The company has declared a final dividend of 11.5 NZ cents per share. That’s up 4.5% from the previous year.

Infratil said it will provide full details of its potential new offer of unsecured, unsubordinated fixed rate Infrastructure bonds at the end of May.

Looking ahead, the company’s guidance for the year ending 31 March 2022 is for a proportionate EBITDAF of NZ$470–520 million. That figure excludes Tilt Renewables and Pacific Radiology.

Infratil share price snapshot

Over the past 12 months, Infratil shares have gained 53%, outpacing the 25% gains posted by the ASX 200.

Year-to-date the Infratil share price has slipped, down 5% so far in 2021.

More reading

• Why the Infratil (ASX:IFT) share price is in focus

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The EML Payments Ltd (ASX: EML) share price has returned from its trading halt and is crashing lower.

In morning trade, the payments company’s shares are down a massive 52% to a 52-week low of $2.47.

Why is the EML Payments share price crashing lower?

Investors have been selling the company’s shares this morning after it revealed that its Irish regulated subsidiary, PFS Card Services Ireland Limited (PCSIL), has received correspondence from the Central Bank of Ireland raising significant regulatory concerns.

According to the release, the central bank’s concerns relate to PCSIL’s Anti-Money Laundering / Counter Terrorism Financing (AML/CTF), risk and control frameworks, and governance.

The correspondence states that the central bank is inclined to issue directions to PCSIL pursuant to section 45 of the Central Bank (Supervision and Enforcement) Act 2013.

There are a number of possibilities in this section, one of which is the revoking of its financial service provider authorisation.

Is this a big deal?

As you might have guessed from the EML Payments share price reaction today, this could potentially be a very big deal.

Following Brexit, EML Payments moved the European operations of its Prepaid Financial Services to Ireland. As a result, during the third quarter of FY 2021, the company estimates that approximately 27% of its global consolidated revenue derived from programs operating under PCSIL’s Irish authorisation.

The central bank has invited PCSIL to provide it with submissions in relation to the concerns. The company advised that it intends to do so by 27 May 2021.

In the meantime, the central bank and PCSIL are in close dialogue regarding the concerns raised. Furthermore, PCSIL is working with the bank to assist it with receiving information and documentation relevant to its concerns.

EML concluded: “EML welcomes the opportunity to engage more closely with the CBI in relation to the matters raised and PCSIL’s business model more generally. EML is committed to cooperating with the CBI and is taking steps to address concerns raised.”

FY 2021 guidance

Failing to give the EML Payments share price a lift today an update on its guidance. 

The release explains that, excluding any potential costs relating to the above, EML Payments is on course to achieve its guidance in FY 2021.

This will mean underlying revenue in the range of $180 million to $190 million and underlying net profit of $30 million to $33.5 million.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Why the EML Payments (ASX:EML) share price is in a trading halt
• Fund managers have been buying EML Payments (ASX:EML) and this ASX share
• Little ASX software share to explode once everyone wakes up: fundie

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia has recommended EML Payments. 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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