CAB Payments still in talks with StoneX about possible takeover

30th Oct 2024 08:03

(Sharecast News) - Fintech firm CAB Payments said on Wednesday that it is still in talks with US payments firm StoneX about a possible takeover, as it updated on its third-quarter performance.

The company announced earlier this month that it had received an unsolicited non-binding proposal from StoneX at 145p per share.

It said on Wednesday: "Discussions with StoneX are continuing and StoneX and its advisers are undertaking due diligence.

"There can be no certainty that an offer will be made, nor as to the terms on which any offer may be made."

CAB Payments also said that its revenue performance was in line with management expectations for July and August, but marginally below those expectations by the end of September.

"Whilst the group continues to exhibit growth in volumes it has also experienced a dilution in overall take-rates," it said. "This has been a result of the mix of flows shifting towards lower-margin G10 currencies together with slower than usual economic trading activity in our core markets."

The company also said it had "extensive" discussions with its International Developmental Organisation (IDO) clients in October. It had previously noted that IDO budgets have reduced this year but it was still expected that volumes would increase in the fourth quarter due to usual seasonality.

However, CAB Payments now thinks this pick-up in volumes in Q4 is unlikely to materialise due to changing global macroeconomic and political factors. This is expected to reduce IDO volumes "significantly" in 2024, with an element of this likely to be deferred into next year.

Chief executive Neeraj Kapur said: "I am pleased with the progress that has been made since setting out our strategic framework in early September. We are continuing to diversify the business and enhance relationships with our clients at a senior level, including with key Central Banks. Our business model remains robust and we are still winning market share despite short-term market headwinds.

"In terms of performance, the encouraging trading we saw early in H2, has subsequently been impacted by slower than expected flows from International Development Organizations and macro headwinds which are largely out of our control. We are expecting some of this volume to be deferred into 2025.

"I previously flagged that 2024 will be a reset year. As a team we are working hard to ensure that our strategic initiatives are put in place to deliver maximum impact in 2025."