CAB Payments shares surge as Footsie newbie gains new European operating licence

CAB Payments shares rose more than 10 percent on Thursday after the group secured a new license allowing it to operate in most of Europe.

The financial technology company has obtained a payment services license from DNB, the Dutch central bank, allowing it to offer services throughout the European Economic Area under the passport regime.

It said the approval would create “significant opportunities” for the company, which floated on the London Stock Exchange in July 2023, and the customers and markets it serves.

Following the announcement, shares in CAB Payments rose 11.4 per cent to 123.2p late on Thursday morning, taking 2024 gains to around 50 per cent.

However, they remain well below their initial public offer price of £3.35, partly because the group issued a turnover warning shortly after listing.

Last October, the company said annual revenue would be 17 percent lower than previously expected, amid high currency volatility, including a sharp depreciation of the Nigerian naira.

While CAB told investors that sales would still be at least a fifth higher than the year before, shares plunged 72 percent in one day.

CAB, headquartered in Sutton, specializes in providing foreign exchange services and processing payments between developing countries.

It started in 2016 when private equity investor Helios Investment Partners acquired the financial services arm of Crown Agents Bank, which was originally founded in 1833 to procure goods and services for colonial administrators.

Bhairav ​​​​Trivedi, CEO of CAB, said the license was “an important step in the expansion of the company and provides a substantial growth opportunity.

‘We have long seen Europe as an important market for the group. We look forward to engaging with potential customers to move money to where it is needed.”

Trivedi announced in February that he would step down after three years at the helm following the release of the company’s annual results on March 26.

Last week he told investors that Neeraj Kapur, the former finance boss of Bradford-based Vanquis Banking Group, would succeed him ‘in the coming months’.

In 2023, CAB reported that gross income rose by a quarter to £137.1 million thanks to higher interest income from cash management.

However, profits fell 29 per cent to £23.9 million due to rising staff costs and professional fees arising from the listing process.