CAB Payments (CABP) H1 2024 earnings summary

Executive summary

• New CEO and senior leadership hires outlined a four-pillar strategy focused on network, clients, platform, and innovation/investment for sustainable, diversified growth and operational leverage.

• Achieved resilient H1 2024 performance despite lower global market volumes and a strong prior year, with double-digit growth in core transactions and 35 new clients onboarded, totaling 526 active clients.

• Maintained focus on cross-border FX and payments, especially in sub-Saharan Africa, while expanding into Europe and the U.S. and supporting financial inclusion.

• Announced a global partnership with Visa to enhance payment capabilities and network reach, and secured EU payment licence and US office authorization.

• Emphasis on decentralizing operations, building local teams, and strengthening relationships with central banks and local partners.

Financial highlights

• H1 2024 gross income was £55.7m/GBP 56m, down 22-23% year-over-year due to normalization in NGN, XAF, and XOF corridors; excluding these, underlying gross income grew 11%.

• Adjusted EBITDA fell 53% to £18.7m, with margin compressed to 33-34% from 56% prior year, reflecting lower revenue and higher costs.

• Operating free cash flow dropped 75% to £9.4m, with cash conversion at 50% due to higher capex.

• Adjusted PAT declined 62% year-over-year to £11.0m.

• Customer deposits reached £1.5bn, with over 80% in high-quality liquid assets; net interest margin at 2.4% for 2023.

Outlook and guidance

• Gross income for 2024 expected to be marginally below 2023, with H2 typically stronger due to seasonality and strategic initiatives.

• Adjusted EBITDA margin anticipated to improve in H2, bringing full-year margin into the high 30s.

• Core capital expenditure for 2024 anticipated at approximately £15m, with capex at 8-10% of revenue to support technology and growth.