Plus500 Q3 hit by new regulations but FY seen ahead of expectations
Online trading platform Plus500 said on Tuesday that trading for 2018 is now expected to be ahead of expectations, as things start to perk up after third-quarter revenue was hit by new regulations.
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Plus500 Ltd (DI)
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For the nine months to 30 September, revenue rose 86% from the same period a year ago to $565.6m. For the three-month period including two months of trading post the newly-implemented ESMA regulations, however, revenue was down 14% to $100.1m, with the company also pointing to low volatility.
Still, Plus 500 said it has seen the return of higher volatility across asset classes and as a result stronger trading since the end of the quarter.
Active customers for the nine-month and three-month periods increased 74% to 278,529 and 8% to 102,043, respectively. Meanwhile, new customer numbers for the nine months were up 19% to 114,832 but down 51% for the three-month period to 20,684.
The company said cash balances rose to $371.1m at 30 September 2018 from the same time a year ago, but were down from $511.9m at 30 June 2018, since which date it has paid $164.9m in final and special dividends for the year ended 2017.
Chief executive officer Asaf Elimelech said: "Our results for the third quarter continued to show satisfactory levels of trading activity of our active customers in comparison to previous years, despite regulatory changes and low market volatility.
"We continue to focus on our core markets and acquiring high value customers supported by our innovative technological edge and the prospect of potential new licences outside the EEA. We now expect to be ahead of current market expectations for 2018."
Canaccord Genuity, which reiterated its 'sell' recommendation on Plus500, said: "Progress in Q3 was worse than we had expected in terms of new customer acquisition at 20,684 (CGf: 25,000). In our view, this does not bode well for forecasts into 2019 and 2020 (we expect 125k new customers in each year, which is materially below consensus)."
At 1012 BST, the shares were up 0.8% to 1,258p.