Steady As She Goes: CAB Payments Navigates Transformation with Measured Growth
CAB Payments’ latest interim results paint a picture of a business executing its transformation playbook with disciplined precision. For the six months ended 30 June 2025, the specialist in hard-to-reach cross-border payments delivered modest but meaningful progress—a welcome sight after last year’s strategic reset. While macroeconomic headwinds linger, the foundations laid here suggest CAB is quietly building something resilient.
Financial Footing: Stability First, Growth Next
Let’s cut straight to the numbers—they tell a story of consolidation:
- Total Income: £51.8m (up 3% half-on-half, though down 8% year-on-year). The HoH growth signals a return to momentum post-restructuring.
- Adjusted EBITDA: £13.1m (up 8% HoH), reflecting early operational leverage.
- Active Clients: 573 (up from 546 in FY24), with 52 new clients onboarded in H1—21 already transacting.
- Capital Strength: CET1 ratio of 19.5% and robust liquidity (LCR: 138.8%, NSFR: 134.4%).
The year-on-year dip? Primarily down to two factors: the non-repeat of a favourable currency dislocation in H1 2024, and ongoing pressure in the IDO (International Development Organisation) sector. CEO Neeraj Kapur’s “modest half-on-half revenue growth” framing feels apt—this is about rebuilding from a stable base.
Strategic Leaps: Beyond the Spreadsheet
Where CAB really shines in this update is strategic execution. They’re not just counting pennies; they’re expanding their universe:
- Global Rails: New York sales licence secured, Abu Dhabi office pending approval, and boots-on-the-ground growth in Africa. Europe’s already contributing revenue.
- Network Density: Added 46 counterparties (total: 436), deepening liquidity pools for those tricky corridors.
- Product Innovation: First payments processed via Visa partnership, CNY pairing capability launched, and FX derivatives piloting. Trade finance balances surged to £199m (H1 2024: £105m).
- Efficiency Drive: Restructuring complete (~100 roles cut), shifting focus toward client-facing growth. Headcount now 345.
This isn’t scattergun expansion. Each move targets CAB’s sweet spot: solving complex payment puzzles in markets others find “too difficult.”
Challenges & Nuances: Reading Between the Lines
No transformation is frictionless. Two wrinkles stand out:
- Emerging FX Volumes: Down 6% HoH, reflecting IDO budget constraints. CAB’s reliance on this sector remains a sensitivity.
- Take Rate Pressure: Blended FX take rate stable HoH at 0.12%, but down from 0.17% YoY. The shift toward lower-margin developed FX volumes (up 26% YoY) is a deliberate diversification play but squeezes margins near-term.
Yet Kapur’s confidence in the “multi-product, fee-based solutions model” hints at the long game—reducing dependency on volatile FX spreads.
Leadership’s Lens: “Foundations Built”
Kapur’s commentary underscores the operational grind behind the headlines:
“We have built a strong pipeline of client activity, leveraging the strength of our integrated FX and Payments business, enhanced by our banking licence… The foundations we have built in the first half give us confidence to continue growing.”
Translation: The heavy lifting—licences, restructuring, platform enhancements—is yielding tangible client momentum.
Outlook: The Inflection Point Ahead?
Management’s guidance is notably forward-leaning:
- Expects improved H2 performance and full-year YoY income growth for 2025.
- Points to “more meaningful growth in 2026”.
- Capex remains controlled (~£8m for 2025), prioritising client-facing tech.
This isn’t exuberance—it’s a statement backed by client onboarding momentum and new market entries going live.
The Investor Takeaway: Patience, Poise & Pipelines
CAB Payments in H1 2025 feels like a ship that’s retrimmed its sails. The numbers aren’t explosive, but the direction is clear: disciplined geographic expansion, product diversification, and client growth. For investors, the thesis hinges on three questions:
- Can they scale higher-margin banking services (trade finance, deposits) fast enough to offset FX spread pressure?
- Will the New York/Abu Dhabi footprints unlock higher-value institutional flows?
- Is the IDO volume slump a blip or a structural drag?
For now, Kapur & Co. have earned the benefit of the doubt. Their strategy is coherent, their capital fortress-like, and their niche as relevant as ever. As one City wit might say: they’re not just moving money; they’re moving the goalposts.
