25 July 2024
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CAB
Payments Holdings plc and its subsidiaries
("CAB",
"CAB Payments", the "Group" or the "Company")
H1 2024 Pre-close Trading
Update and Outlook for FY 2024
Underlying income growth
across currency corridors, supported by continued investment.
Balance sheet remains robust with extended capacity to drive
further transactional growth
Note all figures are
approximate, rounded to the nearest million and subject to review,
and therefore should not be treated as final
CAB Payments, a B2B bank providing
FX and Payments transaction services to hard-to-reach markets,
today announces an update on its trading performance for the six
months ended 30 June 2024. The Group will issue its interim report
and corresponding investor presentation on 4 September 2024 and, in
light of new leadership, will also provide a strategic update
alongside revised operational KPIs.
Neeraj Kapur, CEO of CAB
Payments, commented:
"Our first-half performance was resilient, despite lacking
tailwinds from the Nigerian Naira, while also continuing to suffer
from the headwinds in XAF and XOF from the end of last year.
Market-wide global payment flows have shrunk approximately 10%
year-on-year and we do not expect to benefit from any positive
market dislocations in 2024. However, with the strategic
initiatives that we have implemented in Q2, we anticipate a
stronger second half and expect our overall full-year Gross Income
performance to be marginally down on last year.
Our fundamental business model is robust, and I firmly believe
in our purpose and the global market demand for our services. At
the interim results, I will outline the initiatives and actions we
are taking to build a more sustainable, diversified, and growing
business over the medium term. I look forward to updating you
then."
H1
performance:
·
Total Volume levels up 4% to £17.6bn (H1 2023:
£16.9bn) - market-wide payment flows are down approximately 5%
year-on-year in the Group's core Sub-Saharan Africa market and
approximately 10% globally, based on the Company's analysis of
market data
·
Underlying Gross Income growth of 11% - excluding
the impact of previously identified dislocations in Nigerian Naira
(NGN) and Central Bank interventions in Central African Franc (XAF)
and West African Franc (XOF)
o On a
reported basis, Gross Income declined 22% to £56 million (H1 2023:
£72 million) including the effects of the above
dislocations
·
Good performance across a broad range of emerging
and developed market corridors with resilient client activity among
Non-Bank Financial Institutions (NBFI), Emerging Market Financial
Institutions (EMFI) and Central Banks
·
The International Development Organisation (IDO)
customer segment is demonstrating below trend volumes owing to
changes in the political landscape among major donor
governments
·
Gross Income has diversified. Top 5 currency
corridors accounted for 32% of Gross Income in H1 2024 versus 49%
in H1 2023
·
Resilient Net Interest Income performance up 2%
reflecting continued growth in client balances coupled with
steadier interest rate curves. Overall balance sheet remains strong
with CAB expanding its liquidity and trade finance products to key
customers at the end of the period to drive better transaction flow
in H2 and beyond
·
Continued investment in the Group's EU and US
offices, new central London headquarters, expanded salesforce and
development of the network has resulted in an Adjusted EBITDA of
approximately £19 million (H1 2023: £40 million) and Adjusted
EBITDA margin of approximately 34% (H1 2023: 56%)
Outlook for 2024:
The business is now on a more
balanced trajectory with 2023 proving to be an exceptional year.
The Group also believes that in 2024 there are no significant
tailwinds in its major corridors.
As a result, the Group expects Total
Gross Income for 2024 to be marginally down compared to last year,
while continuing to demonstrate double-digit growth in its
underlying Transactions business (beyond the 2023 top 3
corridors).
It is anticipated that Gross Income
will continue to rise in the second half due to seasonal volume
uplifts, new products, and network and geographical expansion,
creating higher operating leverage in H2.
Gross Income and Volumes:
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Gross Income (£m) - all numbers are subject to
review and rounded to the nearest million
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Six months ended 30
June
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2024
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2023
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YoY(2)
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YoY
ex NGN, XOF, XAF (1)
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Wholesale FX
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23
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38
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(39%)
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24%
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Payments
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15
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17
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(15%)
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0%
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of
which
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Payments FX
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7
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10
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(30%)
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(9%)
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Other Payments
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7
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7
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8%
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8%
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Total transactional income
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37
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55
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(32%)
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13%
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Net Interest Income
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16
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16
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2%
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2%
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Other banking services
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2
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1
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98%
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100%
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Gross Income
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56
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72
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(22%)
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11%
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Memo:
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Wholesale FX & Payments FX
Income
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30
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48
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(37%)
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14%
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NGN, XAF, XOF Income
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8
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29
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(73%)
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-
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(1) NGN excluded from both periods as positive
effects felt in H1 2023 have now been unwound and have materially
diminished in H1 2024 figures. XAF and XOF also excluded due to
significant central bank intervention policies which have supressed
revenues in H1 2024 vs H1 2023. This is to aid year-on-year
comparison.
(2) Includes the effects of NGN, XAF, XOF
revenues
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Volumes & Take Rates - Wholesale FX & Payments
FX
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Six months ended 30
June
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Volume
(£bn)
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Take Rate
(%)
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2024
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2023
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2024
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2023
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Emerging Markets
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6.8
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7.0
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0.33%
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0.61%
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Developed Markets
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10.8
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10.0
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0.07%
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0.06%
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Total
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17.6
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16.9
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0.17%
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0.29%
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Memo: (ex NGN, XAF and XOF)
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Emerging Markets
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4.4
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4.0
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0.34%
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0.34%
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Note: Volume and Take Rates information is a driver of
Wholesale FX & Payments FX Income
Audit tender:
The Group has commenced a tender
process for the role of external auditor for the financial year
ending 31 December 2025. The audit tender process will be overseen
by the Group Audit Committee and is expected to conclude by the end
of the current financial year. A resolution proposing the
appointment of the selected firm will be put forward at the next
Annual General Meeting. The Group's current external auditor is
Forvis Mazars LLP who were originally appointed for the financial
year ended 31 December 2021.
About CAB Payments:
CAB Payments Holdings plc is the
holding company for Crown Agents Bank. Regulated in the UK, it
specialises in FX and cross-border payments for hard-to-reach
markets. Its strength of network and deep expertise means it can
move money into and out of the world's most complex financial
markets.
Trusted by a global ecosystem of
leading institutions across the public, private and development
sectors, Crown Agents Bank's strength lies in its network which
connects its clients to underserved geographies, giving them access
to 100+ currencies across 700+ currency pairs. The delivery of
fast, transparent and efficient transactions moves money where it's
needed. Crown Agents Bank's network offers multiple transaction
solutions, delivered via a single API, digital trading platforms or
through bespoke approaches developed by its specialist
teams.
Crown Agents Bank is one of the
first banks to achieve B Corporation™ status and was awarded the
Gold Sustainability Rating by EcoVadis in 2022 and 2023 - ranked
within the top 94% of 94,000 companies assessed across 160
countries and over 200+ industries.
For further information, please
contact:
CAB
Payments Holdings plc
Gaurav Patel, Head of Investor
Relations
ir@cabpayments.com
www.cabpayments.com
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FTI
Consulting
(Public Relations Adviser to CAB Payments)
Katie Bell -
Katherine.Bell@fticonsulting.com
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+44
(0) 7976 870 961
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