Result, page-9

For those who missed the conference call:

* Need to add back D&A from NPAT figure, still another 30m to be amortised through P&L over the next few years. Allow for 1.3m maintenance capex
* Large chunk of share based payments for FY17 was for earn out related to NA acquisition. (4m of the 5m+). Arguably can add this back.
* As reloadables & VP grow, expect breakage revenue to fall to 40% of group in FY18. Represents increasingly diversified revenue stream.
* TC very confident of $7B+ GDV for FY18. Reaffirmed analyst consensus of $7-8B GDV with 100BPS revenue earn "directionally right"
* Overheads primarily driven by increased staff which they onboarded from NA acquisition. Headcount has remained static (ie. have not hired more staff). Management stated they do not expect to be hiring more & for overheads to be moving up primarily with inflation.
* Management have stated explicitly they will not need increased staff/costs for increase in GDV from current $4B+ to $7B.
* Have commenced self issued cards ie. Sportsbet Aus has launched. More control & higher margin (I think 10 BPS increase)
Expect this to be a focus for FY18
* Europe gaming uptake has been slow, but expect to see FY18 more deals/contracts sign with other operators. Bet365 UK soft launch in April. Delay attributed to failure of competitive products on market which have made gambling operators more cautious about rolling out EML's product???
* 33m in cash (got to subtract 7m from 39m as timing issue). One of questions asked was what was the plan for the cash? TC mentioned that investors previously advised him they would prefer not to have dividends especially as they would be unfranked. However he said this would be something to be re-assessed in FY18. Has stated a large cash balance of 33m is not efficient capital management especially for a firm like EML which is capital light, and of their size.

Thoughts?