EML Payments’ poor management of its acquisition program of recent years continues to haunt it, with write-downs to the value of two recent acquisitions, PFS Group and Sentenial Group, tipping the company into loss for the six months to December. EML has recognised an A$86.2 million impairment expense to the carrying value of PFS Group, which was acquired in 2020 for $252 million. It has recognised a $35.1 million impairment expense to the carrying value of Sentenial Group, which was acquired in 2021 for $109 million plus a potential earnout of $62 million. EML made a loss of $129.9 million in the December half, compared with a loss of $12.1 million in the previous corresponding period. While these impairments have no cash impact, they are reflective of a business that has been badly run. PFS Group has been the focus of attention of Irish and UK regulators over the past couple of years for shortcomings in risk management. EML said the impairment was in recognition of forecasts for PFS that are below previous expectations, “influenced by market conditions and impacts on timelines to program deliveries as a result of ongoing remediation”. In the case of Sentenial, “planned investment in the business to drive growth was delayed, resulting in business development delays relative to acquisition case.” EML chief executive Emma Shand told investors at a presentation last November that the company’s problems go back to a period of rapid growth between 2015 and 2021, when it made seven acquisitions. The acquired businesses were left to operate largely on their own, “missing an opportunity to integrate, extract synergies and align culturally”. Aside from these impairments, the December half financial report details falls in revenue and earnings.  Revenue from contracts with customer fell 4.4 per cent year-on-year to $107.2 million. Total revenue of $116 million was up 2 per cent, thanks to interest income. The company earns interest on funds in prepaid card accounts and this rose from $1.3 million to $8.9 million. The company’s preferred earnings metrics are underlying EBITDA, which fell 50 per cent to $13.4 million, and underlying NPATA, which fell 95 per cent to $700,000. The company said the result was impacted by higher costs, including investment in the business, the regulatory remediation program and higher wages. The company suffered fraud losses of $8.5 million. It provided no details about this loss, except that it was merchant fraud in respect of Sentenial Group and was non-recurring. On the positive side, gross debit volume (payments processed) increased by 55 per cent year-on-year to $49.4 billion. This was largely due to the Sentenial business being included in the results for the full period.  Excluding Sentenial, debit volume rose 6 per cent in the digital payments division, 4 per cent in the general purpose reloadables division and 16 per cent in the gift cards business. Shand said she is working towards completion of the Irish and UK remediation work by the end of this year. She said the company is three months into an 18-month implementation of a new strategic plan that was unveiled at the company’s annual