CAB Payments ($CABP): The Board Said It Was Worth More Than 95p. The Results Are Starting to Prove It.

CAB Payments ($CABP) just delivered a H1 2026 results package that makes the market's current pricing look backwards. The board spent the first half of the year rejecting two takeover offers — Helios at roughly 85 pence per share and StoneX at 95 pence — telling investors those bids "significantly undervalued" the business. The stock is now trading at about 80 pence.

The board said the company was worth more than 95 pence. The market is pricing it at 80. Meanwhile, the business posted 31% income growth, 82% adjusted EBITDA growth, and expanded margins to 35%. The narrative the market has latched onto — takeover disappointment, advisory cost drag, emerging-market uncertainty — is treating a temporary capital-structure distraction as a structural business problem.

1. The margin expansion is the story, not the takeover noise.

Adjusted EBITDA grew 82% year-over-year to £23.8 million in the first half. EBITDA — earnings before interest, taxes, depreciation, and amortization, a proxy for operating cash generation — jumped from a 25% margin in H1 2025 to 35% in H1 2026. That's a 10-point margin expansion in six months.

The mechanism is clear. Total costs rose 13%, well below the 31% income growth. About £2 million of the cost increase went to fixed staff costs for international office and sales-team expansion, £1.5 million to variable performance-linked pay, and £1.3 million to cost of sales from higher transaction volume. That's not bloat — it's revenue-generating investment. The operational leverage was intentional and executed.

2. Core revenue growth is running well above the guidance range.

Income excluding deposit net interest income rose 48% year-over-year to £52.3 million. Management's medium-term guidance calls for high-teens to low-20s% compound annual growth in this metric. The company is running at more than double the upper end of that range.

The composition supports durability. Wholesale FX income — the highest-margin segment — grew 75% to £31.0 million, driven by 21% growth in emerging-market volumes and higher take rates. Payments income rose 19%, including record correspondent banking revenue of £17 million with 77 live clients and approximately 30 commercial relationships with central banks. Fintech and corporate client income surged 69%, with first corporate transactions from names like Emirates and TotalEnergies.

The one drag was deposit net interest income, down 7% year-over-year as interest rates declined. Management flagged this at the time and it was expected. It's a macro headwind, not a business-model problem.

3. The rejected bids create a valuation floor, not a ceiling.

Helios offered roughly 85 pence per share ($1.15 USD). StoneX offered 95 pence. Both were unanimously rejected by the independent board on the grounds that they undervalued the business. The current price of approximately 80 pence sits below both.

In a normal market, a board that rejects a bid at price X and then trades below X is sending a signal. The gap exists because investors are pricing in Helios-related advisory costs (£3.6 million in H1, with more expected in H2 and potentially into 2027), the lingering takeover uncertainty — the company remains "under offer" per the UK Takeover Code — and a general skepticism about a London-listed emerging-market fintech that most global funds don't cover.

The advisory costs are real but finite. They don't change the revenue trajectory, the margin expansion, or the medium-term growth profile. A £3.6 million one-off cost on a business generating annualized adjusted EBITDA of roughly £47 million is a rounding error once the deal process concludes.

4. The capital position sets up surplus returns.

The CET1 ratio — a bank's core equity capital as a percentage of risk-weighted assets, the key regulatory solvency metric — stood at 21.7% after the dividend declaration. Management's target range is 16.5% to 17.5%. That's a surplus of 4 to 5 percentage points.

The framework is explicit: progressive ordinary dividends growing at a mid-single-digit rate from 2027, with surplus capital above the target range returned via buybacks or special dividends. The inaugural interim dividend of 2.1 pence per share was announced this week, ex-dividend August 13, payable September 10. It represents roughly 40% of H1 adjusted profit after tax.

The CET1 surplus is the structural proof that the growth is capital-efficient. The company is adding clients, expanding into new geographies (Nigeria, Côte d'Ivoire, Guyana, Latin America), building a stablecoin product, and investing £7 million in capex — all while holding well above its own capital target. That doesn't happen if the business is marginally profitable or burning through reserves.

5. The forward multiple doesn't match the growth rate.

This is where the disconnect becomes arithmetic. H1 adjusted EPS was 5.4 pence. Annualizing that gives roughly 10.8 pence per share. At 80 pence per share, the stock trades at approximately 7.4x annualized earnings.

The company guides for high-teens to low-20s% revenue CAGR. A business growing core revenue at 20%+ and expanding margins toward the upper-30s EBITDA range, trading at roughly 7.4x annualized earnings, is priced as if the growth is aspirational rather than booked. The 601 active clients, the 77 correspondent banking relationships, the first syndicated trade finance facility (£110 million for Vista Bank Group), and the stablecoin product in late-stage partner selection aren't aspirations. They're operating metrics.

The risk to the thesis is clear.

Emerging-market take rates declined somewhat in Q2 relative to Q1. Management didn't clarify whether that's a one-quarter normalization or a trend. If EM take rates continue compressing, the margin trajectory slows. The Helios advisory costs will press on H2 and possibly 2027 statutory results. The stablecoin launch, planned for H1 2027, depends on ADGM regulatory approval expected in Q3. Any delay pushes the timeline out. And a meaningful emerging-market economic contraction — the kind that drives currency crises or capital controls — would hit volumes directly.

The break condition.

The gap closes if H2 delivery holds near H1's pace, the advisory cost tail comes to an end, and the market recognizes that a stock trading below two rejected bid prices is reflecting a takeover process rather than business deterioration. The stablecoin product launch in H1 2027 is a potential catalyst that would mark the company's first regulated digital-asset offering — a differentiated product in a space most cross-border competitors haven't entered.

The stock may need to find a bottom before an investor dives in. The takeover overhang and the Helios cost drag create near-term noise. But at roughly 7.4x annualized adjusted earnings, with margins at 35% and revenue growth running at more than double the guidance range, the forward math is already far more attractive than the panic narrative suggests. The board said the company was worth more than 95 pence. The results are starting to prove it.