CAB Payments is going ahead with its flotation, and it has announced the offer price of 335p. This offer is one of the few that has happened this summer. The shares should be eligible for inclusion in the FTSE 250 index.
The flotation was expected to value the payments company at up to £1bn and the valuation at the offer price is £851.4m. That is after raising up to £333m in the offer and it assumes no exercising of the over-allotment option, which could be up to an additional 15% of the offer shares. Existing investors are selling all the shares on offer.
CAB Payments has developed technology and global networks for foreign exchange and cross-border payments. This means that there are high barriers to entry. The underlying business is Crown Agents Bank, which has a UK banking licence. There is a capital-light and scalable business model.
Market share is less than 1% of a global payments sector worth $2.3 trillion. The market is growing at 4%/year.
Last year, revenues jumped from £53.1m to £109.9m with pre-tax profit jumping from £9.5m to £43.5m. NAV was £114.2m at the end of 2022.
