Plus500 sees 2018 results ahead of expectations
Plus500 racked up solid gains on Tuesday after the online trading platform said 2018 results are likely to exceed market expectations as the strong momentum from the third quarter has continued.
Financial Services
14,129.27
16:59 23/04/24
FTSE 250
19,799.72
16:59 23/04/24
FTSE 350
4,424.29
16:59 23/04/24
FTSE All-Share
4,378.75
17:14 23/04/24
Plus500 Ltd (DI)
2,158.00p
17:05 23/04/24
In a very brief trading update, chief executive officer Asaf Elimelech said: "We are delighted to report positive momentum for October and November as we move towards the end of the financial year. We believe we are in a good position for 2019 and continue to focus on acquiring high value customers as well as growing in existing and new jurisdictions."
Liberum said the statement means Plus500 has already hit the previous fourth-quarter expectation of $52m in EBIT.
"The quarterly run rate of Q4 profit, up till now, is therefore $52m/0.55=$95m. Our 2019 EBIT forecast is $384m. This business is already in mid Q4 2018 earning the profit run rate we expect for 2019."
Liberum said it was "conservatively" lifting its Q4 EBIT forecast to $67m, with the revenue forecast rising to $116m from $110m.
Canaccord Genuity said the update should come as no surprise to the market given recent elevated volatility, which is helpful for trading volumes.
"Unfortunately the statement does not provide an update on financial metrics, customer acquisition, active customer numbers or progress on conversion to elected professional status," the brokerage said, as it retained its 'sell' stance on the stock saying it anticipates a "significant" hit to customer acquisition and average revenue per user in CY19 and beyond.
At 0850 GMT, the shares were up 6.5% to 1,369p.