- Fourth-quarter and full-year income tops guidance
- Market spooked by lower per-customer volumes
- Almost £1 billion wiped off market cap
Investors in UK fintech Wise (WISE), formerly known as Transferwise, must be wondering what the firm has to do to please the market after its shares were smashed down as much as 16% despite revenue growth beating forecasts in the latest quarter.
The firm, whose market cap as of last night’s close was almost £6 billion, saw £960 million wiped off its value with today’s move, which took the shares from 585p to 490p in the space of a couple of hours.
WORRIES SURFACE OVER VOLUMES
The global money-transfer group posted total income of around £280 million in the fourth quarter to March, up 83% on the same quarter last year, helped by a swing to positive net interest income on customer balances and higher overall transaction volumes.
The fourth quarter result boosted full-year group income to £964 million, a jump of 73% or just above the latest guidance of a 68% to 72% increase.
However, while overall volumes rose 25% to £26.7 billion in the final quarter, average volume per customer fell 7% due to a lower level of activity among higher-volume customers (those who move over £10,000 in a typical transaction).
‘We believe payments amongst these cohorts, such as for property purchases and investments, to be more discretionary in nature and influenced by macroeconomic conditions to a greater extent’, the firm commented.
DISCRETIONARY HAZARD
The suggestion the firm was more exposed to discretionary, large-ticket deals seems to have been the catalyst for the de-rating of the shares.
‘The second consecutive quarter of declines in personal volumes per customer is likely to be viewed negatively by the market, and we believe volume per customer is likely to remain subdued given the current macro environment’, said analysts at Peel Hunt.
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