Wise shares slide 20% after UK payments firm flags weaker outlook

LONDON (Reuters) -British money transfer company Wise forecast a weaker than expected outlook for profits on Thursday, sending its shares down more than 20%.

The company also reported underlying pretax profit of 242 million pounds ($309 million) for its 2024 financial year, beating expectations, on income of 1.2 billion pounds.

But it forecast 15% to 20% growth in underlying income for this year, a slowdown on the 31% seen in the year to end-March, when it was boosted by customer growth and higher interest rates.

Wise chief financial officer, Kingley Kemish, said last year's earnings benefited from efficiency gains that enabled it to cut prices. Without that, expected growth for this year would have been higher, at 20% to 25%, Kemish noted.

"While the announced guidance is disappointing at first glance given the price reduction, however, we think the cuts boost confidence in medium-term growth," Jefferies analysts said.

Wise's underlying pretax profit margins are forecast to come in at 13%-16%, which Jefferies analysts said was 19% below the consensus forecast.

Shares in Wise fell as much as 23% to their lowest since late October, before recovering by 1045 GMT to trade down 15% at 715 pence.

Wise listed on London's stock exchange in 2021. Shares opened at 800 pence when it went public.

The company said it moved 118.5 billion pounds around the world for 12.8 million customers last year.

($1 = 0.7827 pounds)

(Reporting by Paul Sandle and Tommy Reggiori Wilkes; Editing by James Davey and Mark Potter)