13th Aug 2018 11:08
LONDON (Alliance News) - Online trading platform Plus500 Ltd said Monday it experienced a "record first half" as revenue and profit more than doubled, but warned the stellar performance is unlikely to continue at the same level.
For the six months to June 30, the contracts-for-difference provider, posted revenue up to USD465.5 million from USD188.4 million the prior year, on the back of an "exceptional first quarter" combined with good second quarter performance, Plus500 said.
Pretax profit nearly tripled to USD346.4 million from USD116.3 million in the comparative year ago period.
On an operational level, the company said its active customers more than doubled reaching 248,564 from 112,317 last year, with new customers up 75% to 94,148.
Plus500 said total number of transactions in the first half increased by 51% compared to the prior year.
"Geopolitical events resulted in higher than expected market volatility with new and existing customers trading a diverse range of instruments," the company added.
To reflect its "outstanding performance", the company said it increased its interim dividend to USD1.38 per share compared to USD0.24 the year prior.
Current trading in the third quarter is in line with market expectations, the company said, however, it added that it is "unlikely that the exceptional performance of the first half will be repeated".
In a conference call discussing the results, Chief Executive Officer Asaf Elimelech and Chief Financial Officer Elad Even-Chen said that the earnings before interest, taxes, depreciation and amortisation margin of 75% achieved in the first half of the year, is "not sustainable".
Instead the company is targeting a margin of around 65%.
"75% is something doable but not sustainable, let's be frank about it, if you would like to see an increased level of operations going forward we are targeting more the 65% something like that," the pair said.
The company said it is aligned with the regulatory changes implemented since the beginning of August by the European Securities and Markets Authority and "believes these changes will enhance the contract for difference trading landscape and create a more level competitive playing field".
However, Plus500 added that the change in regulation could "potentially affect less than half of European Economic Area revenues in the short term".
"Overall, our expectations are that Plus500's outstanding momentum will deliver strong year-on-year growth in 2018, in line with the market expectations," CEO Elimelech said.
In June, Plus500 transitioned to trading on London's Main Market and said the move will "provide a more appropriate platform for continued growth" and help to attract new customers.
Plus500 shares were trading down 8.3% at 1,841.44 pence each.
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