Okay so I have some pointers from today’s conference call. Firstly I have to mention that in the backward looking results you must:
-recognise that the AU reloadable revenue did not include establishment fee’s – hence the decrease in revs
-There is $1m in receivables on balance sheet in receivables which has been converted into cash a few days after 31
st December.
To the conference call here are my brief notes:
Village roadshow have bought a UK business and in conjunction with Edge Loyalty will roll out EML non-reloadable cards. Currently in the UK, the current method of bank transfers is used for cash back promotions. This has $$ of card load in potential.
http://www.asx.com.au/asxpdf/20151221/pdf/433ymrqyxk0tkw.pdf
AU gambling
- Current annual run rate of 300-350m per annum. That is at this point in time, and does not take growth, new deals or Eachway into account.
- looking to evolve the r/s where cards are issues on account opening
- introduction of VIP programs etc on the cards
- the gambling companies are able to retain $$ in their ecosystem, meaning it’s a very good offering for these companies
- Possibility of new deals with pure online players. Multiple discussions happening right now
- Without the EML card this product would not exist for these new players!
- 3-4 month horizon
AU Reloadable
- Sportsbet is the biggest reload client
- Small growth in INGOGO
- Decline in payday lending caused by regulatory events – Cash Converters will be the ‘last man standing’ in this sector and currently is going better than expected
Long run average of dollars loaded to revenue
- AU reload: 1.5c per $ load
- AU Non-reload: 3-4% per $ load
- Eur is expected to be the same in both segments?
Overheads
- Increased by a lot due to investment in product development. ie. Eachway & EUR reloadable
- expected to be maintained over the next period
Depreciation & Amm
- $6m Amm to write off over 3 years
Cash balance
- breakage accrued can’t be grouped with cash b/c of accounting treatment – it is basically the same thing, EML earns interest on the breakage accrued
Receivables/Payables from financial institution – Someone else please elaborate?
- These are self-issued products via MasterCard
- No fees and increased margins on this
- included the shopping mall programs
- expected to grow a lot
- A + L will always offset?
EACHWAY
- $ load should equal 3% of total turnover of the gambling companies
- same 1.5% revenue conversion
- Majority/all overseas discussions include this product offering
- The technology build for this had increased costs in current half
Overseas deals
- “the timing is right” & “a land grab situation”
- Didn’t ask so not sure of the competition here????
- Discussing with number of operators about
- Very competitive landscape and no one wants to be the last to market with this new point of difference
- This is not a 1 country solution & working in other EUR markets. 1 customer relationship might equal multiple jurisdictions
- 1 UK customer has more users than the entire AU market
- UK deal will take 12-18 months to scale up and first figures of 350m run rate mentioned
LOI Paysafe
- they provide a pmt solution similar to Bankcorp
- Product could potentially be like an E-Wallet, pooling you cash balances at multiple websites?
- strong organisation push from both companies to come to an agreement
- Paysafe have a lot of regulatory expertise in many markets to assist with different jurisdiction requirements
(20min delay)
