Finseta Reports 16% Revenue Growth in H1 2025 Despite Strategic Investments Impacting EBITDA

Corporate card launched – a new, repeatable revenue stream

The Finseta Corporate Card, powered by Mastercard, is available as virtual or physical cards with multi-currency functionality across 210+ countries. Early revenue has started, with more product improvements before a wider roll-out. Cards tend to carry high-margin, recurring interchange and fee income, so if adoption scales, mix should help earnings quality.

Customer dynamics: more corporates, slower HNWI activity

Active customers rose to 1,101, with a sizeable cohort onboarded but yet to transact. The latter is important: once USD-related headwinds ease, conversion could unlock incremental volume without extra acquisition cost.

Revenue mix shifted towards corporates – 58% versus 38% last year – as HNWIs pulled back in tougher macro conditions. Corporate clients can be stickier and more repeatable, so the direction of travel looks sensible even if HNWI volumes rebound later.

Margins, costs and cash: what’s under the bonnet

Gross margin dipped to 62.7% from 65.7%, reflecting revenue mix. Despite that, gross profit rose to £3.7m on higher volumes. Operating expenses increased to £3.9m from £2.8m as Finseta invested behind the UAE and Canada build-out, agency banking and card launch.

The bottom line was a small loss – £0.2m from operations and £0.21m after tax. Cash and cash equivalents ended at £2.4m, with £0.4m net cash after deducting loan notes. Operations generated £0.4m of cash, while investing outflows of £0.4m largely reflect spend on agency banking and software development (£313,746 of internally generated software, plus £62,781 of PPE).

There is a £2.0m loan note outstanding to a major shareholder and executive, carrying 6% interest and due on 31 July 2026. That is a medium-term liability rather than an immediate squeeze, but it is one to keep on the radar.

Guidance: revenue growth trimmed to c. 11% for FY 2025

USD-related activity is improving in H2 but “to a lesser extent than initially anticipated”. The Board now expects around 11% revenue growth for the full year. Cost discipline is emphasised, with total operating costs expected to be slightly lower than initially planned. Strategically, management continues to point to materially faster growth and improved profitability in the medium term as the UAE, Canada, agency banking and cards scale.

My take: why this update matters

There is a clear trade-off here. Finseta is accepting lower near-term EBITDA to build a broader, higher-quality platform. The UAE licence and agency banking are meaningful capability upgrades that can expand the customer universe and improve service levels. The corporate card adds a sticky, high-margin stream that should smooth revenue seasonality.

The negatives are straightforward: macro hit USD flows, HNWIs were quieter, and margins softened as mix shifted. Guidance has been nudged down and there is not a lot of balance sheet slack, so execution needs to stay tight. That said, cash generation from operations remained positive and the loan note maturity is in 2026.

What could go right in H2 and beyond

• Conversion of the larger pool of onboarded-but-inactive customers as FX conditions stabilise.
• UAE growth accelerates post integration with local payment systems, lowering costs and boosting speed.
• Corporate card adoption ramps, adding high-margin, repeatable income.
• Agency banking unlocks bigger or more complex UK clients, deepening wallet share.

What to watch for risks

• Prolonged USD volatility from policy or tariff headlines delaying client activity.
• Slower-than-planned roll-out of the corporate card or delays integrating new payment rails.
• Gross margin pressure from mix as the company scales new corridors and sectors.
• Liquidity headroom – cash stood at £2.4m – so disciplined cost control and working capital management remain important.

Jargon buster

• Adjusted EBITDA – a profit measure before interest, tax, depreciation and amortisation, adjusted for items the company views as non-core or non-cash.
• Agency banking – partnering with a bank to issue your own client account numbers and access payment schemes (such as Faster Payments) without being a bank yourself.
• HNWIs – high net worth individuals.

Housekeeping and next steps

There is a minor inconsistency in the RNS: the financial review text cites H1 2024 adjusted EBITDA at £0.3m, while the statement of comprehensive income shows £0.8m. The detailed statement figure appears to be the correct comparator given the line-by-line reconciliation.

Management will present at 9.30am BST today via Investor Meet Company. If you want to hear the Q&A straight from the team, you can register here: https://www.investormeetcompany.com/finseta-plc/register-investor

Bottom line

Finseta grew briskly, invested heavily and took a temporary hit to profits. The strategic pieces – UAE, Canada, agency banking and cards – are the right levers to broaden the moat and reduce reliance on FX-only revenues. With guidance reset to c. 11% revenue growth for 2025 and costs kept in check, delivery in H2 will hinge on converting the enlarged pipeline and sustaining momentum in Dubai and Canada. If those engines fire, the medium-term earnings mix should look stronger than it does today.