EML Payments - Prepaid card contract win in Spain

EML Payments (EML) has announced another government stimulus contract win, this time supporting Correos in Spain with the government’s plan to boost the cultural sector. While positive for the General Purpose Reloadable (GPR) business, the company noted that this contract would use much of the growth cap imposed by the Central Bank of Ireland (CBI) on EU-based business. We have taken the opportunity to revisit our forecasts, reducing the weighting of establishment and breakage/dormant account fees and increasing the weighting of volume-based revenue. This results in cuts to our FY23 and FY24 revenue, EBITDA and NPATA forecasts.