CAB Payments recently published a new revenue prediction which had a rather negative impact on the company’s shares, resulting in their price being more than halved due to a single update.

The company blames market uncertainty for lower revenue expectations

The British B2B cross-border payments company’s performance was excellent until this update. Only three months earlier, the firm managed to raise around 335 million GBP through a listing on the London Stock Exchange.

However, the situation seemingly changed with the firm’s new trading update. In the update, the company shared that its business felt a strong impact caused by the sharp changes to the market conditions. CAB Payments felt the impact in some of its key currency corridors, which came in addition to massive existing uncertainties that surround the Naira.

These uncertainties have already impacted both the margins and volumes, putting the company in an unfavorable position. As a consequence, the firm had to update its expected group revenue for 2023, and the market did not like the change. According to the update, the company now expects the revenue to be at least 20% ahead of the previous year but also around 17% lower than previously issued guidance.

Commenting on the change, the company said that it will try to do everything in its power to lessen the impact on profitability. Its plan is to push through the cost reduction measures while improving efficiency as much as possible.

The future is uncertain for CAB Payments

Throughout 2023, CAB Payments managed to sign 74 new customers, and for the time being, it says that it feels confident that these customers will significantly contribute to delivering good growth moving forward.

However, the firm also warned that the market conditions will continue to play a major role in what will happen next. If the current market conditions persist in some of its key currency corridors in a similar way as previously described, the company said that the softer exit rate from 023 could result in an even further revenue growth drop in 2024. It warned that the revenue growth figures might fall below the medium-term potential.

As mentioned, the market took the news rather badly, and the company’s shares plummeted by 60% in early morning trading. For now, it remains unknown whether this was simply the initial reaction, and if the share price might bounce back up, or if the price might remain where it is, or potentially even drop further down.