EML Payments has announced a change of leadership, as it tries to shake off the lingering effects of the regulatory intervention of the Central Bank of Ireland in its overseas operations last year.
Chief executive Tom Cregan has resigned and will be replaced by Emma Shand, who joined the company’s board as a non-executive director last September.
Shand’s career includes 16 years with securities exchange Nasdaq, where her roles included global head of advisory services. She is a non-executive director of global cyber security company XM Cyber.
When the company announced her appointment to the board it highlighted her work with “highly regulated capital market infrastructure operators” and the fact she had done “governance studies” at Harvard.
In May last year, the Central Bank of Ireland wrote to EML’s Irish-based European subsidiary, PFS Card Services, to raise concerns about the risk of money laundering and terrorism financing within the business, as well as concerns about the company’s risk management framework and governance.
PFS, which EML acquired in 2019, is a provider of white label payments and banking-as-a-service technology, The CBI imposed “material growth restrictions” on the company as part of its regulatory intervention.
Despite assurances from management that the matter would be dealt with quickly, costs of A$12.6 million relating to the CBI matter contributed to EML reporting a net loss of $12.1 million in the December half-year.
EML faces higher ongoing expenses, as it has had to beef up its compliance and governance teams in Ireland.
In December, Shine Lawyers filed group proceedings in the Supreme Court of Victoria, alleging that EML did not comply with its disclosure obligations and engaged in misleading and deceptive conduct regarding disclosure.
In April, EML reduced its full year earnings guidance. Having previously said it expected to report “underlying EBITDA” of $58 to $65 million for the year to June, it revised that to be between $52 and $55 million. Its underlying EBITDA in 2020/21 was $53.5 million.
It also said it expected gross debit volume and revenue for the year to be lower than previously forecast. While its Australian and North American business are performing in line with expectations, business growth in Europe slowed as a result of having to take “a more risk-averse approach to new programs.”
“We now anticipate continued challenges through Q4,” the company said.