CAB Payments has experienced a significant drop in profits due to adverse currency movements, impacting their first-half 2024 earnings.
- The company’s pretax profit for the first six months was reported at £13.7 million, marking a substantial 43% decline from the previous year.
- Earnings per share decreased from 6.1p to 4p, reflecting diminished profitability attributed to currency volatility.
- Despite an £800m IPO last summer, CAB’s share prices have plummeted by 64% due to various market adversities.
- In response to these challenges, CAB Payments has announced a strategic shift, focusing on execution and growth across key business areas.
CAB Payments, a fintech enterprise listed on the London Stock Exchange, specializes in foreign exchange and cross-border payments targeting challenging markets. Recent developments have cast a shadow on the firm’s financial health, highlighted by a pretax profit slump to £13.7 million for the first half of 2024, a stark drop of 43% compared to the prior year. The decline is largely attributed to significant currency market disruptions, particularly involving the Nigerian Naira.
The firm’s earnings per share mirrored this downturn, falling to 4p from last year’s 6.1p. The adjusted EBITDA saw a precipitous decrease from £40 million to £18.7 million, with the EBITDA margin dropping from 55.7% to 33.5%. This downturn has been partly due to external currency policy changes, notably by the Nigerian central bank, impacting revenue streams and resulting in a reduced confidence as reflected by share prices falling 64% from the IPO value.
Nevertheless, CAB Payments reports that the transactional volume increased by 4% to £17.6 billion, contrasting with a general 5% drop in market payment flows within Sub-Saharan Africa. This resilience, as noted by CEO Neeraj Kapur, suggests steadiness in CAB’s operations despite the existing challenges. Kapur noted, “Our H1 results were resilient despite the exceptional prior year,” while maintaining an optimistic forward-looking stance.
To navigate these turbulent times, CAB Payments has unveiled a refined strategy aimed at reinforcing their business core. This involves enhancing their platform and client services, expanding their network, and investing in innovation. The appointment of new senior executives is part of this strategy, designed to facilitate focused execution and sustainable growth.
Underpinning this strategic pivot is the goal of diversifying their business operations, focusing on sustainable expansion and adapting to evolving market conditions. This shift aims to stabilize CAB’s financial footprint and restore investor confidence as they move past the fluctuations that have characterized the past year.
CAB Payments is navigating through challenging economic conditions with strategic adjustments aimed at long-term growth and sustainability.
