Shares in CAB Payments plunge 70 per cent as bosses issue profit warning and launch cost-cutting plans
Shares in newly listed fintech firm CAB Payments cratered by more than half this morning, after the firm issued a profit warning on the back of a slowdown in some of its key markets.
In a trading update on Tuesday, the money transfer outfit said it had seen a “number of changes to the market conditions” in some of its key currency corridors as well as “uncertainties surrounding the Naira” which had impacted both volumes and margins.
“At the present time, these market conditions are compressing margins and reducing trading volume,” the firm said.
“These challenges are recent but continuing, and coincide with the traditionally strong fourth quarter) for both of these corridors; it is unclear when and to what extent conditions in these markets may improve.”
Bosses said they will now look to slash costs and introduce “efficiencies” but any actions will be “tempered by its ongoing confidence in the medium-term potential of the business”.
“The company anticipates that the majority of any revenue impact will flow through to the bottom line,” the firm added.
The update sent shares plunging more than 70 per cent in early trading.
CAB Payments floated in July to much fanfare, after a drought in listings in London, becoming the biggest IPO of the year so far.
However, its shares are now trading a 70 per cent discount to their IPO price.
CAB Payments said it had notched total group revenue growth 10 per cent above the second quarter, and at the end of September 2023 had taken £105.5m across the year, up from £67.4m across the same period in 2022.
CAB Payments grew out of the colonial era Crown Agents Bank and spun out its money transfer arm after a private equity cash injection. Boss Bhairev Trivedi told City A.M. in June he was bullish on London as a listing venue.
“I’m very bullish on the geography, on the market, on the investors. We’ve got very, very favourable reactions from the investors. That’s what we’re looking forward to,” he said prior to the float.