According to the latest research note from Shore Capital, Finseta Plc (LON:FIN), a UK-based provider of cross-border payment services, has taken a significant step to improve its financial flexibility and support future growth plans. The company has restructured a loan note held by its Chief Commercial Officer, Robert O’Brien, while also amending his compensation arrangements, resulting in an enhanced cash position and stronger balance sheet.
The revised agreement sees £0.2m of a £2m loan note converted into equity, which will increase the total shares in issue by approximately 2% to 59 million. The remaining £1.8m of the note will now be repayable at the end of 2028 instead of 2026, with the coupon increased to 8.5%. Additionally, O’Brien’s commission share from certain revenue streams will be reduced from February 2026, offering further support to Finseta’s cash flow.
Analyst Vivek Raja noted, “These actions alleviate FIN’s cash constraints, which should raise the company’s flexibility to pursue its growth plans.” This view is echoed in Shore Capital’s unchanged fair value estimate of 45p per share, which implies substantial upside from the current share price of 14p.
Despite a difficult H1 performance due to macroeconomic uncertainties, particularly those tied to US foreign policy, Finseta experienced strong growth in new customer origination. The analysts believe this lays the groundwork for a rebound in customer activity and financial performance in H2.
From a valuation standpoint, Shore Capital projects a dramatic improvement in metrics. While the forward P/E for FY26 stands at around 37x, this compresses sharply to 4x in FY27, driven by revenue growth, margin expansion, and operating leverage. Free cash flow yield is also forecast to jump from 7% in FY26 to 22% in FY27.
Highlights from the latest financials:
- Revenue: Forecast to grow from £12.6m in FY25 to £20.5m by FY27
- Adjusted EBITDA: Improving significantly from £0.4m in FY25 to £3.4m in FY27
- Net Cash: Expected to rise from £0.3m in FY25 to £2.9m in FY27
- Adjusted EPS: Anticipated to swing from -0.5p in FY25 to 3.2p in FY27
- Gross Margins: Stable in the 63–64% range over the forecast period
Finseta continues to expand internationally by securing local regulatory licences and diversifying its offerings. Its technology platform supports transactions in 150 currencies across 165 countries, reinforcing its long-term growth narrative.
On a Final Note, Shore Capital maintains its positive stance on Finseta Plc. The firm’s strategic financial moves enhance its ability to execute growth initiatives while supporting operational improvements. With the share price near a two-year low, Shore Capital views the current valuation as an attractive entry point for investors looking ahead to FY27 performance.
