CAB Payments Holdings plc (LON:CABP) today announced a plan to streamline its operations during 2025.
This will deliver growth from a cost base that is more appropriately aligned to its stated strategic and operational priorities. The company is commencing a programme to reduce its head count by approximately 20% including a redundancy program subject to consultation, while also driving higher performance within the organisation.
This restructuring is expected to take place during the first quarter of 2025.
It is expected that the impact of headcount reduction savings will counteract the annualisation of strategic hires made throughout 2024, inflation and national insurance rises, resulting in broadly flat growth of staff costs in 2025. The Group will continue to focus on its investments in AI and automation to drive an increasing amount of automation throughout the business.
Since the trading update in October 2024, the company continued to be negatively impacted by a stronger dollar, reduction in aid flows and political uncertainty affecting the demand for cross-border payments, impacting both client volume and margin. This trend continued throughout Q4 and as indicated previously, the company did not benefit from a usual seasonal uplift in revenue in the second half of 2024.
Total Group volumes for 2024 grew approximately 7% to £37.2 billion, in the context of market-wide SWIFT payment flows around the world dropping 4% year-on-year and flows into its core Sub-Saharan Africa market dropping 2% as the Company continues to take market share and deliver for its clients.
The largest driver of softening performance was take-rates in emerging markets which compressed in 2024 in comparison with the previous year. This was due to dislocations and market volatility subsiding in 2024 across emerging currencies together with a lower demand for USD in certain markets.
The Company prudently forecasts these levels to continue into 2025, however CAB continues to drive strong win-rates among its clients.
Gross Income for the financial year-ended 31 December 2024 is expected to be approximately £105 million (2023: £137 million) with performance in the second half of 2024 marginally declining versus the first half. CAB continued to diversify its business with improving corridor concentration risk – approximately 29% of its 2024 revenue coming from top 5 currency corridors (H1 2024: 32%, 2023: 45%).
