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Shares in CAB Payments plunged more than 74 per cent on Tuesday after the fintech warned on profits a little less than four months after listing in London.
The company, which specialises in foreign exchange and payment services for businesses that send money to emerging markets, slashed its revenue forecast for the year by 17 per cent.
The warning alarmed investors and comes six weeks after the group reported that revenues for the third quarter rose 10 per cent. On Tuesday, CAB Payments blamed changes to market conditions in some of its key currency markets, including the Nigerian naira, for hitting its margins and denting volumes.
CAB Payments’ July float was a rare bright spot for the London stock market, which has struggled to attract initial public offerings. Excluding those for blank cheque vehicles, that IPO was London’s largest this year.
The offering consisted entirely of a secondary selldown of existing shares held by Africa-focused private equity group Helios Investment Partners and other investors.
Shares in CAB Payments were down 74.2 per cent at 55.6p in late morning trading on Tuesday. They are down 84 per cent from their IPO price, giving the group a market capitalisation of £160mn.
Faced with a sharp deterioration in trading conditions, CAB Payments said it would implement unspecified “cost reduction measures and efficiencies” to cushion the impact on profits.
The company said it expected revenue in 2023 to be “at least 20 per cent” ahead of 2022’s levels, but that forecast was 17 per cent below its previous guidance.
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