EML Payments Earnings: Shareholders Likely Better off Without Troubled European Business

We retain our AUD 0.80 per share fair value estimate for no-moat EML Payments. This is based on an equal-weighted probability of retaining its troubled European business Prepaid Financial Services in which case our fair value estimate would drop to AUD 0.60; or shutting PFS, which increases our fair value to AUD 1.00. Fiscal 2023’s underlying EBITDA of AUD 37 million was AUD 12 million above our forecast. However, this involved adjustments for remediation and restructuring costs deemed nonrecurring, which we doubt.