Slowing revenue growth for CAB Payments in 2023 due to foreign exchange influences
CAB Payments Faces Challenges but Remains Optimistic for Future Growth
London-based B2B payments provider, CAB Payments, is currently navigating through a period of financial turbulence, marked by higher operating costs and a strategic focus on expanding into hard-to-reach currency markets.
In the first half of 2025, the company reported a 78% drop in pretax profit, down to £3.1 million from £13.7 million in the same period last year. Despite this significant decline, CAB Payments remains hopeful about its future growth prospects.
The company's net interest income increased by 42% to £13.2 million, but operating expenses rose 13% to £48.1 million, with non-underlying costs notably increasing from £1 million to £4.2 million. However, CAB Payments is confident about its future, citing an increase in active clients (up by 52 to 573 in H1 2025) and diversification of revenue streams. The top five corridors now account for only 27% of income, down from 32% last year.
The company is expanding globally with new offices in Europe and New York, and plans for Abu Dhabi. CAB Payments added 83 new clients in 2023, with 41 expected to trade in 2024. The company's total active clients grew 12% to 509. Moreover, CAB Payments increased its number of banking partners by 16% to 331.
The company's adjusted EBITDA was up 17% to £64.6m, with an adjusted EBITDA margin of 47%. CAB Payments' share price, however, has been impacted by the latest earnings announcement, falling by around 7% to approximately 46.35 pence, reflecting market reaction to the profit decline despite the positive outlook statements.
The decline in CAB Payments' share price can be attributed to policy shifts across some of its major currency corridors in H2 2023. The company's CEO, Bhairav Trivedi, is stepping down this month, with Neeraj Kapur, former Vanquis Banking Group CFO, set to replace him. The specific date of Neeraj Kapur's start as CAB Payments' CEO was not mentioned.
Despite the challenges, CAB Payments' client base includes remittance companies, international development organizations, and financial institutions in emerging and major markets. The company's diverse range of banking partners, totaling 331, further strengthens its position in the market.
In summary, while rising costs and a sharp profit reduction have pressured CAB Payments’ financial results and share price in the near term, the company emphasizes solid strategic foundations and expects income growth for the full year 2025 and beyond into 2026.
Business growth may prove challenging for CAB Payments due to the increased operating costs, but the company is optimistic about its future, given the increase in active clients and diversification of revenue streams. This optimism is further bolstered by the potential for investments in new markets through global expansion.
