Plus500 upbeat on outlook after decent third quarter

Online contracts-for-difference provider Plus500 updated the market on its trading for the three months ended 30 September on Tuesday, reporting a “strong improvement” in quarterly performance compared to the previous period, with good revenue growth and a strong increase in EBITDA.

The FTSE 250 company said its revenue for the quarter was up 10% year-on-year at $110.6m, while its EBITDA rose 39% to $70.1m as its EBITDA margin expanded to 63% in the third quarter, from 57% in the second quarter.

It reported 24,359 new customers for the period, up 18% on the same time last year, while the number of active customers was ahead 9% year-on-year at 110,939.

Plus500 said its average revenue per user was 2% higher at $997, while the average user acquisition cost fell 42% to $921.

The board said the “consistent” new customer numbers and customer activity over the last two quarters had been driven by macro and geopolitical events, adding that 45% of third quarter group revenues were derived from outside the EEA region, up from 44% in the second quarter.

It added that 40% of third quarter EEA revenues were from ‘Elective Professional Clients’, remaining stable over the second quarter.

Trading for the first nine months of 2019 remained in line with current expectations for the year, the board confirmed.

“During the period we continued to concentrate on delivering significant enhancements to the trading platform, with the addition of functionality which appeals to more sophisticated traders, and to customer service, which is an effective retention tool,” said chief executive officer Asaf Elimelech.

“Underlying operational performance and new customer acquisition metrics remain robust. We are confident we can continue to outperform our peer group in terms of customer acquisition, by maintaining the level of highly targeted marketing investment to exploit market opportunities as they appear, with these new customers expected to provide incremental revenues in due course.”

Elimelech said that, like all operators in the sector, Plus500's performance for the remainder of the year remained dependent, among other things, on financial market conditions providing sufficient trading opportunities for customers.

“However, we are encouraged by the continued improvement reported in the third quarter, and we remain on track to meet expectations for the year as a whole.”

As at 0952 GMT shares in Plus500 were up 5.91% at 835.2p.