First the Irish, now the Brits: EML Payments faces more regulatory concerns

Nick Sundich Nick Sundich, October 31, 2022

EML Payments (ASX:EML) has ceased onboarding new customers, agents and distributors in the UK after the Financial Conduct Authority (FCA) raised concerns about its Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) risk and control frameworks. The company says it can overcome these concerns, but investors evidently aren’t convinced they will any time soon, if at all.

 

No time to do stock research, but you still want to invest?
 
Stocks Down Under Concierge gives you timely BUY and SELL alerts on ASX-listed stocks!

 

GET A 3-MONTH FREE TRIAL TO CONCIERGE TODAY

 

EML faces red flags from the UK regulator

EML’s payments platform was first red-flagged by Ireland’s Central Bank (CBI) in May 2021 and ever since, it has been working to resolve the issues. News that another regulator had issues was arguably the last thing the company needed. 

EML told shareholders the impact of the UK decision would reduce group revenue by less than $5m in FY23. But it was unclear how long this assumed the company would be out of action for in the UK. Admittedly it was under a material growth cap that would expire in December 2022 so it might be assuming it will be only until the end of this year. But the company says this will remain until the FCA is satisfied that EML has executed a remediation plan based on a satisfactory third-party assessment and when that will be is anyone’s guess. 

 

eml

EML Payments (ASX:EML) share price chart (Graph: TradingView)

 

Shares down over 85% in a year

EML shares have suffered in recent months. Regulatory issues have overshadowed the company along with an FY22 result that only met guidance because it had been downgraded.

It is positive that the company is profitable and saw a 20% jump in revenue in the last year. But there’s a point where, if the company doesn’t know where it’s going, investors don’t know either. And the share price plunge suggests we have arrived at that point.

 

 

No time to do stock research, but you still want to invest?
 
Stocks Down Under Concierge gives you timely BUY and SELL alerts on ASX-listed stocks!

 

GET A 3-MONTH FREE TRIAL TO CONCIERGE TODAY

 

No credit card needed and the trial expires automatically.

 

 

 

 

Blog Categories

Get Our Top 5 ASX Stocks for FY25

Recent Posts

Tesla's Earnings Surprise

Tesla’s Earnings Surprise: What Does a 26% Stock Surge Mean for the Future?

Cybercab and Robovan are here to offer an exhilarating experience into the world of Tesla’s innovations. Recently, Tesla unveiled their…

Microsoft

Microsoft Strong Q1 Results – What It Means for Investors

With Microsoft’s Azure cloud computing platform steadily on the rise, the company became the foundational architect that lays digital setups…

paypal Stock Down

PayPal Stock Down 73%: Opportunity Knocking for Value Investors?

PayPal, a well known name in the digital payments domain, experienced a major drop in their stock valuation. Since reaching…