The EML Payments Ltd (ASX: EML) share price has surged 11% after releasing an investor briefing.
EML is a supplier of prepaid financial cards. EML’s corporate mission is to “create awesome, instant and secure payment solutions that connect our customers to their customers, anytime, anywhere, wherever money is in motion.”
Source: Rask Media EML 1-year share price chart
What was announced?
Strong FY20
EML presented its FY20 results to the market and gave investors an idea of what may be in store. I highly recommend you have a read of Cathryn’s in-depth writeup – Your guide to the EML Payments (ASX:EML) FY20 report.
To summarise, in FY20 EML generated 54% growth in GDV (Gross Debit Volume), 25% growth in revenue to $121.6 million and 17% growth in NPATA to $24 million. For those who are new to NPATA, such as me, it stands for Net Profit After Tax Adjusted for the tax affected amortisation arising from acquisition-related intangible assets.
Trillion-dollar industry
Perhaps what most excited the market within EML’s presentation was a statement that the global e-commerce market, in which it operates, could experience sales of $6.5 trillion by 2023.
The company stated it has significant opportunities to grow market share within the US prepaid market, which had an estimated total transaction value of US$395.5 billion in 2019.
The UK and European pre-paid markets have a current estimated total transaction value of £23.7 billion and the Australian pre-paid market is worth around AU$11.8 billion. EML estimates it currently has less than 20% of the Australian market.
Summary
EML has displayed impressive growth and has a massive market opportunity in front of it.
With that said, the FinTech industry as a whole is booming, so I would like to better understand the strength of EML’s products/services before considering buying in.
