CAB Payments Holdings PLC shares tumbled on Tuesday as the recent stock market listing warned on annual revenue amid difficult market conditions in key African ‘currency corridors’.

Shares in the company plunged 73% to 58.83 pence each in London on Tuesday morning, by far the worst FTSE 250 performer.

The cross-border payments and foreign exchange firm now expects annual revenue to be ‘at least’ 20% ahead of the £109.4 million achieved in 2022. This is about ‘17% below previously issued guidance’, however, CAB added.

It expects the ‘majority of any revenue impact’ will hit its bottom line, but will be seeking opportunities to lessen the hurt.

‘In recent weeks, the company has seen a number of changes to the market conditions in some of its key currency corridors, on top of the ongoing uncertainties surrounding the naira, which are impacting both volumes and margins; most notably, the Central African franc and West African franc. At the present time, these market conditions are compressing margins and reducing trading volume,’ CAB explained.

The naira is the currency of Nigeria. The Central African franc is used in Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon. The West African franc is used in Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo.

‘These challenges are recent but continuing, and coincide with the traditionally strong fourth quarter for both of these corridors; it is unclear when and to what extent conditions in these markets may improve,’ CAB warned.

‘To this point in 2023, the company has signed 74 new customers and is confident these customers will deliver good growth into the future. However, 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.’

CAB said that while ‘recent market volumes’ are disappointing, trends in the ‘business-to-business cross-border FX and payments market continue to be supportive’.

CAB added: ‘The company has a well-managed cost base and focused investment plans, remains highly profitable and continues to generate significant free cash flow, which will be used to invest in the business and reward shareholders going forward.’

The firm floated in July at 335p per share. The stock has slid 82% since then. It joined the FTSE 250 index during an index review that became effective in mid-September.

Copyright 2023 Alliance News Ltd. All Rights Reserved.