CAB Payments Holdings PLC Update on Q3 Trading and Outlook (0877R)
24 Octubre 2023 - 1:05AM
UK Regulatory
TIDMCABP
RNS Number : 0877R
CAB Payments Holdings PLC
24 October 2023
CAB Payments Holdings PLC
24 October 2023
CAB Payments Holdings plc
("CAB Payments", the "Company" or the "Group")
Update on Q3 Trading and Outlook
CAB Payments, a market leader in business-to-business
cross-border payments and foreign exchange, specialising in
hard-to-reach markets, provides the following update on performance
since June 2023, current trading, and the outlook for the rest of
2023.
As detailed at the first half results on 13 September 2023, the
business saw a sequential third quarter (Q3) improvement, including
an acceleration in the core business, following specific headwinds
faced in the second quarter (Q2). Total Group revenue in Q3 was 10%
above that in Q2, and at the end of September 2023 was GBP105.5
million year-to-date (2022: GBP67.4 million). Core FX and Payments
revenue excluding contribution from the Naira was 45% ahead of the
same nine-month period in 2022.
In recent weeks, the Company has seen a number of changes to the
market conditions in some of its key currency corridors, on top of
the ongoing uncertainties surrounding the Naira, which are
impacting both volumes and margins; most notably, the Central
African franc (XAF) and West African franc (XOF). At the present
time, these market conditions are compressing margins and reducing
trading volume. 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 to this point in Q4, the Company now expects Group revenue for
2023 to be at least 20% ahead of the prior year (2022: GBP109.4
million); this is around 17% below previously issued guidance. This
assumes no further changes to these core markets, and any material
improvements here could result in a higher Group outturn.
The Company will be seeking opportunities to lessen the impact
on Group profitability in 2023 through cost reduction measures and
efficiencies, but any actions will be tempered by its ongoing
confidence in the medium-term potential of the business. Therefore,
the Company anticipates that the majority of any revenue impact
will flow through to the bottom line.
Medium-Term Outlook
To this point in 2023, the Company has signed 74 new customers
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.
The Company remains confident in its ability to continue to
deliver strong growth over the medium-to-long-term by executing on
the strategy it has outlined. The market in which the Company
operates is undergoing a structural shift from incumbent providers
to specialists such as CAB Payments. The Company is executing on
its plans to take advantage of this shift by investing in and
expanding its already strong network of partners, liquidity
providers and nostro accounts across a range of markets. This
includes further developing its technology solution, expanding its
product offering and extending its geographic reach in order to
broaden and grow its customer base. As previously detailed, the
Company is working on a range of initiatives which should provide
significant growth opportunities in the coming years.
Initiatives include:
- a regulatory licence application in The Netherlands, which
will open up a substantial new sales channel across the EU;
- a US representative office licence, which will enable sales to
the very deep national and regional bank market;
- significant technology upgrades, which would enable an
expansion of the Company's capabilities and product set,
substantially increasing commercial opportunities;
- the longer-term potential to become a US Dollar clearing
institution, which could greatly increase volumes into emerging
markets.
While the Company is disappointed with recent market volumes,
CAB Payments remains confident that the trends within the
business-to-business cross-border FX and Payments market continue
to be supportive. The Company has a well-managed cost base and
focused investment plans, remains highly profitable and continues
to generate significant free cash flow, which will be used to
invest in the business and reward shareholders going forward.
The Company will provide another update at the time of its 2023
Full Year results in 2024.
The Company will host a Call for Investors and Analysts this
morning (24 October 2023) at 8.30am UK Time. Please pre-register
for conference call here.
Upon registering, you will receive a calendar booking by email
with dial-in details and your unique PIN. This process will bypass
the operator and avoid the queue. Registration will remain open
until the end of the conference call.
This announcement contains inside information for the purposes of article 7 of the Market
Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment)
(EU Exit) Regulations 2019/310. With the publication of this announcement, this information
is now considered to be in the public domain.
For further information, please contact:
CAB Payments Holdings plc
Michael Goldfarb
Kieran McKinney
investorrelations@cabpayments.com
www.cabpayments.com
J.P. Morgan Cazenove +44 (0) 207 742 4000
(Joint Corporate Broker to CAB Payments)
Alia Malik
James Summer
Barclays Bank PLC
(Joint Corporate Broker to CAB Payments) +44 (0) 207 623 2323
Stuart Jempson
James Woolf
Canaccord Genuity Limited +44 (0) 207 523 8000
(Joint Corporate Broker to CAB Payments)
Emma Gabriel
Harry Rees
FTI Consulting
(Public Relations Adviser to CAB Payments)
Ed Bridges - Edward.Bridges@fticonsulting.com +44 (0) 7768 216 607
Katie Bell - Katherine.Bell@fticonsulting.com +44 (0) 7976 870 961
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