Tuesday saw early day trading in Cab Payments’ shares plummet by 72 per cent after the company issued a profit warning and announced challenges in some of its key markets.

The British foreign exchange company, which went live with its initial public offering on the London Stock Exchange in July, said it had seen a number of changes to market conditions in some of its key currency corridors, and highlighted uncertainties surrounding the Nigerian naira. It added that these factors were impacting both volumes and margins – most notably with the Central African franc and West African franc.

The company went on to explain that current market conditions are “compressing margins and reducing trading volume”, noting that the challenges are “recent but continuing” and coincide with what is traditionally a strong fourth quarter for both of these corridors.

“It is unclear when and to what extent conditions in these markets may improve,” the company said. “Based on the revenue run rate to this point in Q4, the company now expects group revenue for 2023 to be at least 20 per cent ahead of the prior year (2022: £109.4 million); this is around 17 per cent below previously issued guidance."

While highlighting it had onboarded 74 new customers and was confident these customers would deliver good growth into the future, Cab Payments concluded by conceding that “should the current market conditions persist in some of our key currency corridors, as described above, the softer exit rate from 2023 could result in 2024 revenue growth falling below the medium-term potential.”

Share Story: