Plus500 reports improvement in second quarter
Second quarter revenue at online trading platform Plus500 rose to $94m after a first quarter that was hit by lower volatility and EU rules on leveraged betting.
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The company said it continues to perform in line with current expectations, adding there were signs of reduced levels of marketing across its peer group, which in part led to a rise in customers numbers at Plus500 and lower cost of acquisition.
First half revenue came in at $148m, down from $465m a year earlier, with around 48% of revenue generated outside the European Economic Area, whilst approximately 23% of revenue was generated by elective professional clients within the EEA. First quarter revenue was $53.9m.
The level of client spreads and overnight charges rose to about $93m.
European regulators last year imposed restrictions on the sale of contracts for difference (CFDs), which allow traders to bet on financial asset prices without holding the asset.
In February, Plus500 warned current year profits would be “materially lower” than market expectations due to the new regulations, with the news wiping more than a third off the share price.
Chief executive Asaf Elimech said at the time the new rules introduced by the European Securities and Markets Authority in August 2018 were welcome despite a “marked reduction” in current group revenue, adding that they would ensure a “level playing field across industry providers and increased transparency and fairer outcomes for customers”.
“This creates a backdrop against which we expect Plus500 to excel over the medium to longer term.”