23rd Oct 2018 09:04
LONDON (Alliance News) - Contracts-for-difference platform provider Plus500 Ltd said Tuesday it expects full-year trading to be ahead of expectations despite a weaker third-quarter performance, as it also initiated a share buyback programme.
For the nine months ended September, revenue rose 86% to USD565.6 million from USD304.9 million the year prior.
This was after the number of active customers rose 74% to 278,529 from 160,090 the year before. This was helped by a jump in new customers to 114,832 over the first nine months compared to 96,373 new adds the period prior.
Third quarter performance, however, was weaker with revenue falling 14% to USD100.1 million from USD116.5 million the year prior. Similarly, new customer numbers in the quarter slowed to 20,684 from 42,492 the year before. However, the number of active customers was up 8% to 102,043.
"Volatility for significant periods of third quarter was very low by historical standards, but has increased since the period end, leading to the opportunities that our clients seek," Plus500 explained in a statement.
"As we look forward to 2019, the company remains highly operationally geared with a low-cost base allowing it to maximise profits from incremental revenues," Plus500 added. "We expect revenues to benefit from recent customer acquisition, continued investment in marketing, retention initiatives and new licences."
On Tuesday, FTSE 250-listed Plus500 approved a USD10 million share buyback programme to be started immediately. The programme is irrevocable and non-discretionary. It will be conducted by brokers Liberum Capital Ltd.
"Our results for the third quarter continued to show satisfactory levels of trading activity of our active customers in comparison to previous years, despite regulatory changes and low market volatility," Plus500 Chief Executive Officer Asaf Elimelech said.
During the period, after regulatory changes related to MIFID II rules, Plus500 said it saw a number of customers voluntarily shift to "professional" investor status. This regulatory designation now is 8% of total European Economic Area customer numbers, up from 5% at the end of the second quarter. In total, these customers amount to around 38% of EEA revenue, up from 20% the quarter prior, the company said.
"We continue to focus on our core markets and acquiring high-value customers supported by our innovative technological edge and the prospect of potential new licences outside the EEA. We now expect to be ahead of current market expectations for 2018."
Shares in Plus500 were 1.0% higher at 1,261.00 pence on Tuesday.
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