29th Oct 2019 08:39
(Alliance News) - Plus500 Ltd on Tuesday said its performance improved in the third quarter of 2019, including "good revenue growth" and a notable earnings increase.
Shares in Plus500 were up 8.0% at 851.60 pence in London in early morning trading.
For the three months ended September 30, the online contracts-for-difference trading service reported revenue of USD110.6 million, 10% higher than the USD100.1 million figure posted a year before and 18% higher than the second quarter revenue figure of USD94.1 million.
Average revenue per user rose 1.6% to USD997 from 2018's third quarter figure of USD981 and a sharper 15% from the second quarter's USD866. On top of this, sverage user acquisition cost fell 42% to USD921 from USD1,581 the year before and 3.7% from USD956 in the second quarter.
Earnings before interest, depreciation, taxation, and amortisation in the third quarter climbed an impressive 39% year-on-year to USD70.1 million and the Ebitda margin widened to 63% from 50% the year before and 57% in the second quarter.
According to Plus500, its trading in the nine months to September 30 was in line with expectations for 2019 as a whole.
The company reported an 18% jump in the number of new customers to 24,359 from 20,684 the year before, though this was down 7.1% from the second 2019 quarter's new customer figure of 26,234.
The number of active customers, however, rose 8.7% year-on-year to 110,939 from 102,043, and was up 2.0% from 108,724 in the second quarter.
During the quarter, Plus500 repurchased 1.6 million of shares for USD14.7 million under its USD50.0 million share buyback programme. As at September 30, the firm's cash stood at USD297.5 million, having been USD327.3 million a year before. This decrease includes both the buyback and a USD70.2 million dividend payment in July.
Plus500 commented on likely regulation in Australia, saying it is assessing the possible impact this could have on the approximately 15% of Plus500 revenue derived from Australian clients in the nine months to September 30. Ultimately, Plus500 expects to gain an increased market share from the regulatory measures taken as these are likely to reduce competition.
"Inevitably, the transition period after any new regulations is challenging, but as seen in Europe, client trading patterns subsequently have adjusted and stabilised and the board therefore expects to see a similar pattern evolve in Australia," said Plus 500.
Chief Executive Asaf Elimech commented on the third quarter, saying: "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.
"Like all operators in the sector, Plus500's performance for the remainder of the year is dependent, among other things, on financial market conditions providing sufficient trading opportunities for customers. However, we are encouraged by the continued improvement reported in Q3 and we remain on track to meet expectations for the year as a whole."
By Anna Farley; [email protected]
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