CAB Payments Reports Resilient H1 2024 Performance, Unveils Strategic Partnership with Visa and New Growth Initiatives

CAB Payments Holdings plc, a leading provider of cross-border payments and foreign exchange services in challenging markets, has announced its interim results for the six months ending June 30, 2024. The company reported a 4% increase in transaction volume, reaching £17.6 billion (H1 2023: £17.0 billion), despite challenging conditions, including elevated prior-year performance and reduced flows from International Development Organizations.

CEO Neeraj Kapur commented on the results: “Our first-half performance remained strong, even against the backdrop of an exceptional previous year. As highlighted in our July trading update, our outlook remains consistent, with promising trading activity at the start of the second half. While we anticipate gross income to be slightly below last year, we’re seeing robust growth across a broader range of currency corridors. I’m particularly excited about our recent strategic partnership with Visa, which will significantly enhance our payment reach and scalability.

“Over the past twelve months, we have successfully facilitated £3 billion in development aid and injected £8.5 billion in liquidity into low and middle-income countries, aligning with our mission to support global communities.

“Today, we’re unveiling an updated strategy with a sharper focus on execution, building on our solid foundation. We’ve brought on board top-tier talent within the industry to drive the next phase of growth. Our strategy will revolve around four key pillars: expanding our network, deepening client relationships, leveraging our platform, and disciplined investment and innovation. This approach will help us build a more diversified and sustainably growing business with strong operating leverage.”

Strategic Focus:

• Network: Expanding and deepening the company’s global network.
• Clients: Strengthening existing relationships and expanding the client base.
• Platform: Utilizing the banking license to accelerate growth in FX and payment volumes.
• Invest & Innovate: Allocating capital strategically to foster growth through technology and effective balance sheet management.

Leadership & Strategy: The updated strategy is spearheaded by new senior hires, including a Global Head of Sales, Head of Network, Head of Payments, Head of European Business Development, and Chief Operating Officer, all of whom bring extensive industry experience.

H1 2024 Financial Highlights:

• Volume: Total volumes increased by 4% to £17.6 billion (H1 2023: £17.0 billion).
• Gross Income: Decreased by 22% to £55.7 million (H1 2023: £71.8 million).
• Adjusted EBITDA: £18.7 million (H1 2023: £40.0 million) with a margin of 34% (H1 2023: 56%).
• Adjusted Profit After Tax: £11.0 million (H1 2023: £28.8 million).
• Core Capex: Increased to 12% of Total Gross Income (H1 2023: 3%).

Full-year Gross Income is expected to be marginally below the previous year.

The company anticipates approximately £15 million in Core Capital Expenditure for 2024.

Operational & Commercial Highlights:

• A new partnership with Visa to deliver lower-value, higher-volume payments to over 8.5 billion endpoints across 190+ countries.
• Authorization to open a representative office in the USA is on track for H2 2024.
• 35 new clients onboarded, bringing the total to 526 active clients.

Board Update:

• Mario Shiliashki, an independent non-executive director, has resigned to focus on his new role as CEO of myPOS. The company is actively seeking a replacement.

A webcast and live Q&A for analysts and institutional investors will be held on September 4, 2024, at 9:30 am UK time. A separate presentation for retail shareholders will take place on the same day at 2:00 pm UK time.