Key Takeaways from FY2019 result and $5.75 Valuation

key takeaways from results:

- Business is at an inflection point of accelerating momentum and growth in ALL verticals/segments

- One off costs of $1.4 million were fully expensed including $400,000 on a failed acquisition. this means management are looking at deals but will only pounce when it makes sense and adds value - very conservative and bodes well when the right deal will be done!

- All metrics are expanding in the right direction, GM now at 77% and will head to 80% within 2 years. Ebtda Margins now at 33% and heading to 40% next few years.

- GDV processing gaining scale. estimated GDV for 2020 is now $14-$15 billion. net revenue margin will probably be 90bps.

- The VAN segment is growing fast with partnerships BillGO and PPS driving growth through large processing deals in workers comp, insurance and so on. July annualized run rate already at $10 billion plus pa!

- US gaming gaining traction with BET365 launch imminent and more deals in the pipeline.

- New solution in Merchant Delegation (consumer finance) is still early days but could emerge into the biggest driver of growth in future years. MoneyMe virtual card launching in a month and could cause a rush of competitors to sign up with EML or miss out!

- Dividends now expected to be announced at AGM in absence of any further spend on other deals.

- Consensus upgrades seem to be heading to $41 million in 2020.

- My estimate is $130 million revenue and $45 million Ebtda in FY2020

- My 2022 target of $80 million Ebtda is well on track in my mind.

- ASX200 index inclusion all but certain now for December.

- Peer multiples at 18.5x 2021 estimates yet growing earnings at 15% avg. EML growing at 40% so deserves 25x in my mind.

hence 25x $60 million 2021 is $5.75

enjoy the ride for those that were patient