CAB Payments warns on FY revenues, shares slide

CAB Payments tumbled on Tuesday after the payment processing company warned on full-year revenues, pointing to changes in market conditions in some of its key currency corridors, as well as ongoing uncertainties surrounding the Naira.

The company, which only debuted on the London Stock Exchange a few months ago, said total group revenue rose 10% on the quarter in Q3 to £105.5m. However, in recent weeks there have been a number of changes to the market conditions in some key currency corridors, on top of the ongoing uncertainties surrounding the Naira, which are impacting both volumes and margins.

In particular, CAB highlighted the Central African franc (XAF) and West African franc (XOF).

"At the present time, these market conditions are compressing margins and reducing trading volume." It said. "These challenges are recent but continuing, and coincide with the traditionally strong fourth quarter (Q4) for both of these corridors; it is unclear when and to what extent conditions in these markets may improve."

Based on the revenue run rate up to now in the fourth quarter, CAB Payments expects group revenue for 2023 to be at least 20% ahead of the prior year, which would mean it was down 17% on previous guidance.

The company said it has signed 74 new customers so far this year and is confident these customers will deliver good growth into the future.

"However, should the current market conditions persist in some of our key currency corridors, as described above, the softer exit rate from 2023 could result in 2024 revenue growth falling below the medium-term potential," it said.

At 0830 BST, the shares were down 60% at 86.00p.