CAB Payments shares jumped by more than 10 per cent on Thursday after the group achieved a new licence allowing it to operate across most of Europe.
The financial technology firm has obtained a payment service provider licence with DNB, the Dutch central bank, enabling it to offer services throughout the European Economic Area under the passporting regime.
It said the approval would create ‘significant opportunity’ for the company, which went public on the London Stock Exchange in July 2023, and the customers and markets it serves.
Expansion: CAB Payments has obtained a payment service provider licence with DNB, the Dutch central bank, enabling it to offer services throughout the European Economic Area
Following the announcement, shares in CAB Payments surged 11.4 per cent to 123.2p by late Thursday morning, bringing 2024 gains to around 50 per cent.
However, they remain far below their initial public offering price of £3.35, partly due to the group declaring a revenue warning shortly after listing.
Last October, the business said its full-year turnover would be 17 per cent lower than previously expected amid major currency volatility, including a steep depreciation in the Nigerian naira’s value.
While CAB told investors that revenue would still be at least a fifth higher than the prior year, its shares plummeted by 72 per cent in a single day.
Headquartered in Sutton, CAB specialises 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 arms of Crown Agents Bank, which was originally established in 1833 to procure goods and services for colonial administrators.
Bhairav Trivedi, chief executive of CAB, said the licence was ‘a significant step in the expansion of the business and presents a substantial growth opportunity.
‘We have long seen Europe as an important market for the group. We look forward to engaging with potential clients to move money where it’s needed.’
Trivedi announced in February that he would stand down after three years in charge following the publication of the company’s annual results on 26 March.
Last week, he told investors that Neeraj Kapur, the former finance boss at Bradford-based Vanquis Banking Group, would succeed him ‘over the next couple of months’.
In 2023, CAB reported gross income rose by a quarter to £137.1million on the back of greater interest income from cash management.
However, profits slumped by 29 per cent to £23.9million because of rising staff costs and professional fees incurred from the listing process.
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