10th Jan 2023 15:17
(Alliance News) - Contracts-for-difference trading provider Plus500 Ltd fared better than many of the punters using its platform in 2022.
Plus500 on Tuesday said that results for the year will be in line with expectations, partly thanks to a jump in takings from "customer trading performance".
The Haifa, Israel-based firm said trading volumes were hurt late in the year by the football World Cup, as sports betting lured customers away from CFDs.
Still, annual revenue grew 16% to about USD832 million from USD718.7 million in 2021. Customer income, a key tracker of Plus500's underlying performance, fell 9.1% to USD639 million in 2022, from USD702.8 million in 2021.
But punters lost more money last year, meaning customer trading performance contributed USD193 million in revenue to Plus500, surging from just USD15.9 million in 2021. Plus500 said it expects customer trading performance to be "broadly neutral over time".
Plus500 took on 106,000 new customers during 2022, a lower intake than the 196,336 in 2021. Similarly, active customers fell to 280,000 from 407,374. However, Plus500 said the lower total includes higher-value, long-term customers.
Earnings before interest, tax, depreciation and amortisation rose 17% to about USD454 million from USD387.1 million.
The revenue and Ebitda estimates were 2% and 1% ahead of company collected market consensus, respectively.
Analysts at Jefferies were positive about the Plus500 trading update, saying 106,000 new customers in 2022 was exactly in line with its own forecast, and the proportion of revenue from customer trading performance was less than expected.
"The revenue mix included less customer trading performance and more customer income (so higher quality) than we had forecast," Jefferies explained.
Plus500 said it had cash of USD900 million at the end of 2022, up 20% from USD749.5 million a year earlier, and no debt.
Looking ahead, Chief Executive Officer David Zruia said: "We continue to diversify and develop our business as a global multi-asset fintech group, supported by on-going growth investments in a number of areas, ensuring Plus500 remains well-positioned to deliver sustainable growth over the medium to long-term."
Plus500 will release its full 2022 results on February 14.
"This is a strong showing and bodes well for 2023," commented Jefferies.
Plus500 shares were 4.6% higher at 1,789.00 pence each in London on Tuesday afternoon.
By Tom Budszus, Alliance News reporter, and Tom Waite, Alliance News editor
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