In May, EML revealed that the regulator had expressed significant concerns about aspects of its PFS Card Services Ireland Ltd (PCSIL) business, including around anti-money laundering and counter terrorism financing, risk and control frameworks and governance.

Releasing its annual reports this morning, EML said it has been working constructively with the Central Bank in relation to the matters.

“The CBI has investigated various aspects of PCSIL business from a governance, resourcing, reporting, risk methodologies, controls and risk frameworks, capital adequacy, safeguarding and transaction monitoring perspective,” the company told investors in the report.

“EML has responded in significant detail to the CBI on all matters and has provided the CBI with a detailed remediation plan, and is actively engaged with the CBI in the implementation of this plan.”

EML added that it has engaged specialist advice in relation to the remediation plan and stated that it intends to complete a substantive part of the remediation by the end of this year, with the remaining elements to be completed by the end of March 2022.

Established in 2008 by husband and wife team, Noel and Valerie Moran, PFS was sold to EML last year for AUS$252.3m.

The deal included a performance based earnout of up to AUS$110m over three years to 2023.

However, documents published this morning show because the PFS Group did not meet earnings targets for this year, “no contingent consideration is payable for this period”.

The documents also state that the acquisition earnout was restated due to the impact of the “regulatory error in prior periods to de-recognise the liability owed to cardholders.”

As a result, EML said this adjustment meant no contingent consideration was included in the accounts for the acquisition in March or June of last year, and forward projections of earnings for next year and 2023 now mean expected earnout payments have been reduced to AUS$14.3m.

In July EML said it had identified what it considered to be “historical deficiencies” relating to periods prior to EML’s acquisition of PFS in the UK in relation to the accelerated conversion into cash of funds in dormant and expired e-money accounts, which are supposed to be held until six years after the accounts expire.

It said it expected that the issue would require the injection of up to approximately AUS$26.2m into safeguarded funds held by PFS in the UK, money which may be released back to it over an extended period.

It added that as the issues related wholly to the period prior to its acquisition, any and all financial consequences were the responsibility of the previous owners of the PFS group.

EML’s annual report published today shows that the company recorded net profit after tax with adjustments for acquisition costs of AUS$32.4m for the year ended June 30, up 54% compared to its full year 2020 results.

This was on the back of record revenue of AUS$194.2m, up AUS$72.5m, with earnings before interest, tax, depreciation and amortisation growing by 65% to AUS$53.5m.