Fintech IPO darling CAB Payments tumbles 74% after profit warning

Shares in London listed payments firm CAB Payments have dropped by nearly three quarters (74 per cent) just days after the company issued a profit warning.

CAB Payments focuses on cross-border payments and FX in emerging markets, and on Monday warned that it had seen “a number of changes to the market conditions in some of its key currency corridors”.

The company pointed to the Nigerian Naira, which has fallen by nearly 40 per cent against the dollar this year, and recent turmoil in the value of the Central African franc and West African franc all having the impact of “compressing margins and reducing trading volume”.

Overall the company expects the market wobbles to reduce its revenue this year by 17 per cent, assuming no further changes in its core markets.

“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,” the company wrote in a trading update.

CAB Payments raised £335m in July during its initial public offering on the London Stock Exchange with shares offered at £3.35 and a valuation of over £850m.

This made it one of the London market’s biggest IPOs of 2023 and at the time was heralded as a shining example of a fintech float during an otherwise quiet period.

Today CAB is trading at just 55p, giving the company a market valuation of just £141m.

Despite the downturn, CAB also pointed to some of its successes in 2023, including the addition of 74 new customers and with overall revenue remaining on track to beat 2022’s results by 20 per cent.