Troubled ASX-listed company EML Payments is banking on deep cost reductions and higher interest-related revenue to drive a turnaround in the company’s financial performance in 2024. EML posted a bottom line loss of A$284.8 million in the 12 months to the end of June as the negative fallout from governance failures afflicting the group’s Irish subsidiaries swamped solid profit contributions from the Australian operations. The group booked an impairment charge of $258.9 million on the carrying value of the Dublin-based Prepaid Financial Services Group and Sentenial Ltd, another Irish acquisition. The Central Bank of Ireland raised concerns in 2021 about the adequacy of anti-money laundering controls in PFS’ Dublin operations and since then the company has been unable to remediate the deficiencies. The PFS business, which now has a carrying value of zero on the balance sheet, continues to trade under heavy regulatory constraints imposed by the Irish regulator. A recovery in the operating performance of PFS is unlikely in 2024 because the business is subject to a zero growth cap until at least the end of March. PFS’s UK arm has also been instructed by the Financial Conduct Authority not to onboard new customers until its risk, control and governance framework is remediated. EML’s interim chief executive Kevin Murphy said significant work had been undertaken to improve the governance of the European PFS businesses but did not provide any specific guidance on when regulators were likely to remove constraints on their growth. “Whilst we have already made progress on our operational priorities, I acknowledge there is more work to do in addressing the value drag on the business and strengthening our profitable core business,” Murphy said. “Together with the board, the leadership team will remain focused on creating a simpler, stronger EML in the near term.” Despite the ugly bottom line result, EML shares rallied after the release of the annual accounts that showed company revenue and pre-tax cash earnings had exceeded guidance by 4 per cent and 9 per cent, respectively. The growth was mostly attributable to volume and margin improvements in Australian core businesses. EML is the largest issuer of store gift cards in Australia and grew revenue from this business by 9 per cent to $74.6 million. While gift cards account for a comparatively small piece of the national payments market, it is an extremely lucrative activity. EML’s gross profit from gift cards and loyalty program subscriptions was $60.5 million which means the gross margin exceeded 80 per cent. The group’s local prepaid and reloadable cards business also thrived throughout the year. EML is a significant processor behind many of the country’s largest reloadable payments platforms, including the NSW Government’s public transport card, Opal. The reloadable cards business is the company’s largest division.  It generated an 8 per cent lift in revenue last year to almost $158 million. Earlier this year EML hired advisers from Barrenjoey to conduct a strategic review of the group’s operations with a view to a potential sale of the group’s businesses. In a presentation to investors, Murphy said the review was continuing and that EML’s board was interested in offloading all