What’s needed to get $1.5, page-26

I don't agree that EML is now ex growth.

Over the last two half-yearly reports, gifting is now showing some decent organic growth. With the distractions now gone and renewed focus on core business, I expect this to continue and we could potentially see FY24 gifting revenue at $85m+.

	H1FY21	H1FY22	H1FY23	H1FY24
1	34.98	37.13	33.98	39.1

	H2FY21	H2FY22	H2FY23	H2FY24
1	35.27	31.29	40.6	?

Apart from Aus GPR, the other substantial revenue source for EML would be PFS UK which just had its growth restrictions lifted after 3 long years by the FCA in Apr 24 so expect the numbers to improve moving forward.

Secondly, I would hardly call PCSIL and Sentential as "high growth assets" - they were both loss making.
Yes lots of excitement around open banking but lets remember Sentenial have been around for over 20 years and have been in the open banking space for over 6 years and still had relatively low revenue, operating in a very competitive space with thin margins and loss making which explains why it was sold at a 50% discount compared to what EML acquired it for 3 years ago.

I agree they need to increase operating margins so earnings aren’t mostly from float interest income but I am optimistic about 10-20% organic growth. If they can demonstrate some growth and continue to execute cost optimisation as previously promised, I think we'll see a rerate within the next 6 months.

PS - nearly 4 months since Sentenial sale was announced so expecting regulatory approval anytime soon.