Plus500 revenues surge on more volatile markets

Trading platform Plus500 saw third quarter revenues increase 23% on the previous quarter and 181% compared to the same period last year thanks to increased market volatility.

Revenues of $56m in the quarter were ahead of forecasts, reflecting an 18% increase in the number of new customers on the second quarter, a reduction in the churn rate to 26% from 48% and a 10% increase in average revenues per user.

In the nine months to 30 September, the AIM company's revenue was $162.4m, 41% higher than the total revenue generated in the whole of 2013.

An increase in market volatility and news flow from the Ukraine conflict, Alibaba IPO volatility and a 40% increase in the VIX volatility index in the quarter motivated existing clients to continue trading and new customers to begin trading.

Although advertising costs of $15m were higher than expected, they were offset by the increase in the ARPU.

Said broker Numis: "We believe this highlight's the group’s willingness to pay more for higher value customers which will help support future growth in the ARPU. We have not changed our full year earnings estimates, but note there is upside risk to our forecasts if the strong trading momentum from October is maintained throughout Q4."