CAB Payments, listed in London, faces a challenging start to 2024 with a significant profit decline.
- The firm’s pretax profit dropped 43% to £13.7m for the first half of the year due to adverse currency movements.
- Earnings per share fell from 6.1p to 4p, reflecting tougher market conditions.
- Despite challenges, transaction volumes increased by 4%, highlighting some operational resilience.
- CAB Payments is focusing on a revised strategy to navigate current market volatility and enhance growth.
CAB Payments, a London-listed firm specialising in foreign exchange and cross-border payments for ‘hard-to-reach markets’, reported a substantial decline in profits for the first half of 2024. The pretax profit plummeted by 43%, reaching £13.7 million, impacted heavily by unfavourable currency shifts. Earnings per share mirrored this downturn, slipping from 6.1p to 4p.
The company has also experienced a significant reduction in adjusted EBITDA, falling to £18.7 million from £40 million the previous year. The adjusted EBITDA margin also saw a decrease, now at 33.5%, compared to the prior year’s 55.7%. These financial figures paint a challenging picture for the firm, particularly in the volatile foreign exchange market.
Notably, CAB Payments has been affected by foreign currency policy changes, especially the Nigerian central bank’s adjustments, contributing to reduced revenues and a considerable drop in share prices. The shares have tumbled 64% since their IPO valuation.
Despite these financial challenges, CAB Payments observed a 4% rise in the volume of transactions, totalling £17.6 billion. This comes even as the broader Sub-Saharan Africa payment market, where CAB predominantly operates, reportedly experienced a 5% decline in payment flows.
CEO Neeraj Kapur commented on the company’s performance by acknowledging the resilient results despite challenging conditions. He noted that the trading outlook remains consistent with previous forecasts, expecting gross income to slightly lag behind the previous year while achieving growth across various currency corridors.
To address these challenges, CAB Payments announced a strategy revision, focusing on execution with new key appointments in global sales and operations. This new strategy aims to build a diversified business model poised for sustainable growth through concentrated efforts on network expansion, client engagement, platform development, and innovation. Neeraj Kapur leads these efforts following his recent appointment as CEO.
CAB Payments remains committed to overcoming current challenges through strategic adaptation and operational resilience.
