Payment services provider EML Payments (ASX: EML) has released its full year results for the period ending 30 June 2018, recording a 23% revenue increase to $71 million and a 200% surge in net profit to $4.8 million compared to 2017.
Revenue growth for the 2018 financial year was driven by an increase in gross debt volume to $6.75 billion, up 53% across all regions and sales segments.
The financial year ended with a 36% rise in EML Payments’ stored value balance at $411 million and positive growth in all regions.
EBITDA soared 43% to $20.8 million, with all regional business units generating EBTDA growth and improving against the prior year. Underlying operating cash inflow for the year was $15.7 million or 75% of EBITDA.
Gross margins remained consistently strong at 75% , down marginally from the 76% in 2017, primarily due to product mix.
Longer term, as EML Payments’ reloadable products move to self-issuance in Australia and Europe, the company expects gross profit margins to improve.
During the 2018 period, EML Payments expanded its geographic presence in six Nordic and Baltic countries via the acquisition of PreSend Nordic AB, which has recently signed its first reloadable program with Norwegian bank, Instabank, and is expected to launch in the 2019 financial year.
EML Payments continued to invest in the further development of its proprietary processing platforms, to support Apple Pay, Google Pay and SamsungPay, which will continue to evolve the company’s business model and growth prospects, alongside efficiency improvements to support integration of the its acquisitions and automation of high volume processes.
The company also increased its investment in PayWith Worldwide via a convertible loan instrument for US$0.5m, taking EML Payments’ total investment to $5.8 million.
Operating cash inflows of $9.7 million between January and June were in line with expectations following significant one-off cash outflows in the first half of the 2018 financial year carried over from the 2017 period.
The group has no one-off abnormal operating cash outflows planned in the 2019 financial year.
Although, cash on EML Payments’ balance sheet decreased by 2% to $39 million, the company continues to have sufficient cash to meet its immediate operating and investment ambitions.
The market responded positively to the news, with EML Payments’ share price ending the day at A$1.88 – up 5%.