Wise's Wall Street ambitions hit by profit miss: Shares in the UK fintech firm tank after trading update
The stock fell as much as 11 per cent when it reported that earnings came in at £362million in the three months to June – an 11 per cent increase on the previous year but below analyst expectations of £372million.
The London firm last month dealt the UK tech sector a major blow when it revealed plans to move its primary stock market listing from London to Wall Street in search of a higher valuation.
Chief executive Kristo Kaarmann yesterday said that the proposed move had been 'positively received' by shareholders.
But the trading update and share price decline raised questions about Wise's ability to attract a higher price in the US.
Dan Coatsworth, an investment analyst at AJ Bell, said: 'It's a myth that switching a main stock listing from the UK to the US will automatically result in a higher valuation.
'There are plenty of examples where this hasn't happened. Wise's earnings miss is the last thing it needs ahead of a listing transition.
'It hurts the company's reputation and makes prospective investors more cautious and potentially less willing to pay a high multiple of earnings for the stock, even though it is still delivering high levels of customer and earnings growth.
'It's like asking a driver if they want to buy a sports car with a dent in it.' Shares recovered some losses and ended down 5.7 per cent or 65p, at 1067p.
It is the latest setback for the fintech darling after Kaarmann was last year fined £350,000 by the City watchdog over 'significant tax issues' for his failure to pay £720,425 in capital gains tax after selling £10million worth of shares in 2017.
The New York move has been described as a 'hammer blow' to the City which has suffered a mass exodus.
Last month Kaarmann acknowledged efforts to reform Britain's listing rules but he said the switch was due to the US having the world's biggest capital markets which will allow more investors to buy shares.
The money transfer company insisted it was not turning its back on the UK, where a fifth of staff are based, and would continue hiring and investing in the country.
It will also maintain a secondary listing in London.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
13 minutes ago
- The Sun
Keir Starmer's end-of-term report card is in and it makes for grim reading – he has three big problems
IT is the end of the school year and Parliament is shutting down for the summer holidays. But if Sir Keir Starmer is hoping to spend August in his swimming trunks larking about by the pool, he should think again. 1 The PM's end-of-term report card is in — and it makes for grim reading. The economy is shrinking, his popularity is plummeting and his pesky backbenchers are busy rebelling. The only thing on the up in Britain is illegal immigration and crime. Across the board, Sir Keir and his chums in Labour's class of 2024 are at risk of scoring straight Fs — and failing the British public. In Opposition, Keir Starmer campaigned like a swotty prefect. Dull, yes, but a safe pair of hands who promised to fix broken Britain and restore integrity in politics. But in No10 he has been more Dunce than headboy. The PM has a big problem with his three Rs: Reeves, recession and rebellions. He must master each of these to turn things around. Let's start with Rachel Reeves. On the campaign trail she promised the most 'pro-business' government in British history, and cosplayed Margaret Thatcher by declaring herself the 'Iron Chancellor'. PM vows to drastically increase the numbers of channel migrants sent back to France But once safely tucked up in the Treasury, she dropped a £40billion tax bomb on us — clobbering businesses with that crippling NICs hike. The results were predictable. Britain's economy has gone from the fastest-growing in the G7 to one that is SHRINKING after the tax rises kicked in. Unemployment numbers are up and struggling businesses are thinking twice before hiring because of the eye- watering costs. You don't have to be a maths whizz to work out the numbers don't add up. If Keir Starmer is not careful he could end up with another big problem — a recession. Labour has always had a bad reputation with money. The problem is simple: They love spending money but are rubbish at making it. Now, Labour MPs are busy clamouring for a new wealth tax. ('What wealth?', I hear you cry.) This would be a grave mistake. Eye-watering costs If you squeeze people and businesses with higher and higher taxes they will stop spending, stop hiring, and stop investing. That is how we have ended up in this doom-loop where people feel poorer and cut back on treats like holidays and dinners out. It hacks away at people's happiness and optimism. If you work hard but life isn't getting better, your local pub or shop is closing down, and your kids have fewer opportunities than you had, then what's the point of the Government? If the Starmer regime plunges Britain into recession within its first 18 months in power then it is hard to see how Labour recovers. Which brings me to the third R — rebellions. Labour MPs won by a landslide a year ago, but they have already got a taste for mutiny. The recent welfare rebellion forced No10 into yet another humiliating U-turn and left a £5billion hole in the Budget. Last week Starmer hit back — suspending four rebel MPs for what one insider called 'persistent knobheadery'. I've seen the past four PMs torn down by bitter party feuding. Voters handed Labour a giant majority for a reason: They want change. If the Government fails to deliver it, voters will flock elsewhere. And Nigel Farage's Reform UK party is lurking on the horizon. But Keir Starmer CAN turn things around — it is not too late to turn those Fs into As. First he must stand by Rachel Reeves as Chancellor. Yes, she has made big mistakes, but she knows the importance of providing certainty and stability for the market. Another Labour Chancellor might bring in a wealth tax and go on an even bigger spending splurge. That would be a terrible mistake. Next, he must stop punishing businesses. No more big tax hikes. No more suffocating red tape. Having a wobble Restrictive licensing laws should be torn up. Incentives to take over empty shops should be brought in. Third, he must take on the rebels. No PM can be a hostage to his backbenchers. He must be free to lead. But, to do this, Keir must be braver and make the big arguments. He must stop trying to sneak in piecemeal reform by the back door. On welfare, he should come back with a package of measures that ends the scandal of teenagers and young adults being signed off work for anxiety, depression and bad nerves. It is killing their life chances with misplaced kindness. It is not too late for the Government to turn things around. As any parent of a spotty teenager will tell Keir, lots of people have a wobble in their first year. But the PM must pull his socks up, hit the books this summer and come back next term with bigger and better ideas. Otherwise, as one of my old teachers once told me, he risks slipping into obscurity. And he will have failed Britain. THERE is a long hot summer ahead of us and that can only mean one thing – more crime. Shoplifting, phone snatching, stabbings. Brits are sick to the back teeth with it all. A shocking poll in yesterday's Sun on Sunday revealed that half of voters think the country is becoming lawless. That is a stat to keep politicians and police chiefs awake at night. Nigel Farage and Reform UK will spend the summer shining a light on our crime-blighted streets and promising to restore law and order. Keir Starmer should be worried. People want their neighbourhoods cleaned up. If Labour can't do it, they will vote for a party that can.
Telegraph
13 minutes ago
- Telegraph
There must be a way forward for our water industry
On one thing everyone is agreed: the water industry is in a mess. The finances are shot to pieces, charges to consumers have risen rapidly and the record on pollution is a disgrace. A review to be published today will try to chart a way forward for the country's water companies though without any great expectations that it will bring about the fundamental reforms that are needed. The political parties are unable to agree about what should happen next. With businesses like Thames Water heavily in debt, is renationalisation the answer? Labour ministers, who are not normally shy about praising state ownership, are not keen since the costs would be enormous, probably around £100 billion. Moreover, since the industry struggled to raise money for investment when it was run by the state, why would reverting to the days before privatisation make any difference? The Water Commission chaired by Sir Jon Cunliffe, former deputy governor of the Bank of England, was specifically told not to consider renationalisation as an option in its review. Nonetheless, it has been looking at alternative models such as mixed public-private arrangements. The Government would retain a golden share and control while the private sector would still be expected to drum up the investment rather than the taxpayer. Nigel Farage, the leader of Reform UK, says this is an approach he would favour if in office and it may be something the review recommends. On the other hand, in his preliminary findings Sir Jon said it was by means clear that any particular model equated to better outcomes. 'The Commission's Call for Evidence set out preliminary analysis that suggested no clear, consistent causal link between ownership models and water company performance on a range of metrics and called, specifically, for more evidence on this issue'. There is one thing that unites everyone and that is the uselessness of Ofwat as a regulator and the need to replace it with something that works. On its watch the industry has come close to bankruptcy and vast sums have been paid out in dividends while pollution of rivers, lakes and seas has risen dramatically. Serious incidents have risen 60 per cent in a year, according to the Environment Agency. Will today's review usher in the fundamental changes that are needed or merely see the mess continue? It would help if the politicians could agree on a way forward for dealing with our most precious commodity.
Daily Mail
13 minutes ago
- Daily Mail
Labour levies push consumer confidence to year-long low
Consumer confidence is at its lowest for more than a year after Labour's tax hikes pushed up prices and cost jobs. Deloitte's index of confidence among households hit its lowest since early 2024 as figures last week showed unemployment at a four-year high of 4.7 per cent while inflation has surged to 3.6 per cent. Celine Fenech, a consumer insight expert at Deloitte, said: 'Concerns of a slowing labour market have left consumers worried about job security and income growth prospects, while persistent inflation and a high cost of living have negatively impacted sentiment towards personal debt.' Ian Stewart, chief economist at Deloitte, added: 'Higher inflation – well above levels in the US and EU – coupled with a weaker jobs market is weighing on consumer sentiment. 'The UK is unlikely to see inflation returning to the 2 per cent rate that prevailed last summer until well into 2026.'
