CAB Payments (LON:CABP) used its 2025 results presentation to outline what management described as a structurally improved, more diversified FX and payments business, highlighting a sharp acceleration in performance in the second half of the year and reiterating medium-term growth targets.
Group CEO Neeraj Kapur opened by noting the ongoing situation in the Middle East and said the company’s team in Abu Dhabi was “all fine,” adding that he remained in frequent contact with employees, regulators and clients while actively monitoring developments. The company did not hold a live Q&A because it is in an offer period and said written responses to pre-submitted questions would be posted on its website.
Management points to a “reshaped” business and reduced concentration risk
He emphasized that the company has returned to “peak income levels” excluding what he called the “concentrated naira revenues of prior years,” arguing that the improvement is “structural and strategic” rather than driven by volatility.
Kapur also highlighted changes in client and currency concentration:
- Almost 600 active clients
- Client retention exceeding 90%
- Top five currency concentration reduced to 32% from 45%
Operationally, he said the group reduced roles by about 20% during the reset phase, while adjusted EBITDA rose 14%. He also cited straight-through processing of 94% and a 40% improvement in onboarding times. Kapur said cost growth has remained controlled as volumes scale, and he referenced expanding use of AI as part of improving operating leverage.
2025 results: income up 12% and profitability accelerated in the second half
Group CFO James Hopkinson said the team was pleased with 2025 performance, describing “double-digit broad-based growth” across key metrics. He reported income of GBP 119 million, up 12% year-over-year and up 30% half-on-half.
Hopkinson said the company remains an FX and payments business, with income representing around 70% of revenue and growing 15% year-over-year. He added that income excluding net interest income increased 17% year-over-year and nearly 50% half-on-half.
Operating costs increased 10% as the group invested in client-facing teams, expanded products and network reach, and faced inflation. Hopkinson reported adjusted EBITDA of GBP 35 million (30% margin) and adjusted profit before tax of GBP 23 million, up 9% year-over-year and more than doubling half-on-half as operational leverage improved.
Discussing the second-half step-up, Hopkinson said total income rose 30% half-on-half even as net interest income fell 9% due to U.S. dollar rate cuts late in the year and the group’s interest rate risk management actions taken in the second half. He attributed the second-half income growth largely to strategic drivers including more clients transacting across more markets and products, along with widening FX margins.
Adjusted EBITDA increased 69% half-on-half to GBP 22 million, and the adjusted EBITDA margin improved to 33% in the second half from 25% in the first half. Hopkinson also pointed to consecutive volume increases over the last four halves and said emerging market volumes began rising again after several halves of declines.
Take rates, one-off items, and the “central bank strategy”
Hopkinson said blended take rates rose by 6 basis points in the second half, largely due to an uptick in emerging market spreads from cyclical lows seen in the second half of 2024 and first half of 2025. He presented emerging market take rates as having recent norms around 30 to 33 basis points, with a move to 38 basis points in the second half of 2025.
He broke down the factors behind that increase, including 6 to 7 basis points related to the company’s “central bank strategy,” around 2 basis points from time-bound dislocations in a small number of markets, and about 1 basis point from mix shift as payments FX volumes grew 35% half-on-half compared to 15% growth in wholesale FX volumes. He said this implied a “core margin” of around 27 basis points, which he described as in line or slightly below recent norms.
Hopkinson also identified approximately GBP 2.5 million of “one-off or more episodic income” in the second half, including a GBP 700,000 gain on the sale of a bond portfolio and just under GBP 2 million tied to limited time-bound currency dislocations. Excluding these items, he said the second-half baseline income was closer to GBP 65 million.
Client mix, expenses, and investment plans
Hopkinson said the bank segment remained the largest client group at around 60% of total income and delivered growth of 15% year-over-year and 16% half-on-half despite net interest income pressure in the second half. Fintech and corporate clients represented around 30% of income and grew 15% year-over-year, including 66% growth in the second half, which he attributed to new client wins, expanded currency coverage and margin normalization. International development organization clients accounted for just over 10% of income, and Hopkinson said it was positive that these clients were significantly more active in the second half.
On costs, headline operating costs excluding depreciation rose 10% to GBP 83.9 million. Hopkinson said that after adjusting for a one-off VAT refund of around GBP 0.5 million, the year-over-year increase was closer to 9%. Staff costs excluding variable compensation were broadly flat year-over-year following the Q1 2025 restructure. Cost of sales rose 16% while transaction volumes increased 19% year-over-year, and other operating expenses increased 6% year-over-year (adjusted for the VAT item), driven by professional fees, software costs related to the expanded footprint and broader capabilities, and inflation. The group also incurred GBP 4.7 million of non-underlying costs during the year, in line with prior guidance.
Platform investment was just under GBP 9 million in 2025, down from around GBP 15 million in 2024, with much of the spending directed toward product developments described as in early stages of monetization. For 2026, Hopkinson said investment is expected to step up to between 2025 and 2024 levels.
Outlook: income growth target reaffirmed; capital return options to be considered from end-2026
Management said 2026 started strongly, with Hopkinson citing strong results in January and February. Kapur said the company’s model remains capital-light, noting that less than 8% of income comes from lending and that the profile is expected to remain stable.
Both executives reiterated a medium-term framework targeting compounded annual growth in total income excluding net interest income in the “high teens to low 20s” over the next three years, alongside continued operating leverage and improving capital generation. Hopkinson cautioned that 2026 is expected to face a year-over-year drag on net interest income compared with 2025 levels, and said expenses are expected to increase ahead of inflation in 2026 as the company invests in client teams, while aiming to improve productivity through efficiency initiatives including increased use of AI.
Hopkinson said the group is operating near the upper end of its lending appetite and, starting at the end of 2026, expects to be in a position to consider capital return options alongside other investment opportunities. He said the company plans to provide a formal capital allocation framework “this time next year.”
Kapur also discussed the group’s expansion, noting offices in New York and Abu Dhabi alongside London and Amsterdam, and said expansion into New York in December 2025 and Abu Dhabi in January 2026 would “start delivering revenues this year.” He also said the company continued investment in stablecoin capability and described a “demand-led stablecoin proposition” that would be launched this year, emphasizing the importance of regulated off-ramps, local liquidity, and central bank relationships.
About CAB Payments (LON:CABP)
CAB Payments Holdings plc and its subsidiaries (CAB Payments) is a market leader in business-to-business cross-border payments and foreign exchange, specialising in hard-to-reach markets. CAB Payments uses its strength of network, technology, and expertise to seamlessly move money where it’s needed and is the holding company for Crown Agents Bank, a UK-regulated bank.
