Wise profits surge on higher interest rates

(Sharecast News) - Payments firm Wise posted a surge in first-half profits on Tuesday and upgraded its full-year EBITDA margin expectations, as it benefits from higher interest rates. In the half-year to 30 September, pre-tax profit jumped 280% to £194.3m, on revenue of £498.2m, up 25% on the same period a year earlier. Active customers rose by more than 30%.

The company said it continues to target an adjusted EBITDA margin at or above 20% over the medium term, and that as long as interest rates remain above 1%, its adjusted EBITDA margin will remain structurally higher than its targeted at or above 20% level.

However, Wise's adjusted EBITDA margin will be "considerably higher" than this in FY24, given higher interest rates "and the reality that we are unable to return interest to customers at the level we would like," it said.

Chief technology officer and interim chief executive officer Harsh Sinha said: "In the first six months of this year we continued to make progress against our mission of building the best way to move and manage the world's money.

"We continued to invest in making our account features available to more people and businesses, and we made great progress in building the network for the world's money - having completed our integration into NPP and announcing our collaboration with Swift. This has driven our growth and the fundamentals of our financial performance."

At 1140 GMT, the shares were up 1.6% at 699.80p.