After just nine months in her role as CEO, Emma Shand has handed in her resignation from the deeply troubled digital payments company EML Payments (ASX: EML). Kevin Murphy has been appointed interim CEO till the Company finds a more permanent replacement.
EML Payments has been battling one problem after the next—ranging from losses and fraud to the Central Bank of Ireland being dissatisfied with the progress of one of its acquisitions: PFS Card Services Ireland Limited (PCSIL).
Shand’s tenure was rife with problems, having to kick off her role by explaining why the Company was accumulating losses. But as EML’s operational priorities changed, Shand realised that she could no longer continue her job, passing the baton to Murphy. The appointment of Murphy as interim Group CEO is one of several new initiatives designed to reposition the EML business.
Other initiatives include the confirmation of immediate operational priorities and the appointment of Barrenjoey—an Aussie strategic partner of Barclays—to conduct a strategic review of the EML business. Since the Board of EML payments was reconstituted in February 2023, it has undertaken an internal review of the business and believes that these initiatives are an important first step towards solving the challenges impacting EML today.
Luke Bortoli, chairman of EML, said, “We are pleased to welcome Kevin Murphy as interim Group CEO and are excited to have an executive of Kevin’s calibre join EML. His understanding of the Irish and broader European regulatory environments, previous interactions with the Central Bank of Ireland and deep experience in the payments sector are perfectly aligned to addressing the needs of our business today.”
Murphy is a former Managing Director of the Bank of Ireland (cards business) and has a deep understanding of the global payments industry. He has significant regulatory experience (including with the Central Bank of Ireland) and has been involved in several successful business turnaround scenarios for private equity funds. He resides between London and Dublin.
EML has decided to let go of its future business plans to focus on the problems ailing the business right now. That includes remediation, especially with the Central Bank of Ireland. It is also committed to engaging with the Financial Conduct Authority in the UK and all other regulatory stakeholders. For that, it has established a dedicated Board Sub-Committee to oversee the remediation program. It has also established comprehensive reporting on remediation progress and timetable adherence and started a global search for a new appointment to the EML Board Sub-Committee with experience in remediation processes in Ireland and the UK.
Last year, the Company lost about $8 million to fraud. Plus, in H1 FY23, its underlying EBITDA fell by 50% to $13.4 million due to continued investment in the business to support future growth initiatives, employee cost increases related to the regulatory remediation program, cost inflation and the need to pay higher wages to attract and retain the best talent in competitive markets.
In light of that, EML has embarked on an enterprise-wide cost optimisation program that will streamline its operating model.
Bortoli added, “The renewed Board has spoken with internal and external stakeholders and formed a view on the urgent priorities for the business. We are focused on doing the right thing by our people, customers, regulators and shareholders and we are committed to taking actions that will help the business move through its immediate challenges, deliver sustainable growth in the medium to long term and maximise value for shareholders.”
Under the renewed board, EML will focus on unlocking growth in its most profitable business lines, such as the Gift and Incentive business. Plus, taking note of recent departures, the Company will prioritise retaining team members – particularly those with roles, skills and relationships that are critical to EML’s current business and future growth plans.
News of the restructuring shot the Company’s share price up by 16.5% to 95¢ per share.
Alinda is a Business Reporter for The Sentiment
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