- First half trading beats expectations
- US futures business drives growth
- Consensus earnings estimates to be revised upwards
Shares in FTSE 250 financial trading platform Plus500 (PLUS) jumped as much as 5% to £16.50 in early trading after a first half update which was significantly better than the market was expecting.
Management also said it saw full year revenue and earnings beating current market forecasts.
For the six months to June 30, revenue was $511.4 million, an increase of 48% from $346.2 million last year.
EBITDA (earnings before interest, tax, depreciation and amortisation) soared to $305.3 million, up 63% from $187.6 million.
The EBITDA margin was 60% in the first half, well above last year's 54% margin.
The group onboarded 57,275 new customers during the first half, less than half the 136,980 new customers it signed up in the first half of last year.
Meanwhile, the number of active customers declined from 333,940 to 216,928, but the average margin per customer was much higher.
REAPING THE GAINS OF US EXPANSION
Following its acquisition of Cunningham Commodities LLC (a regulated Futures Commission Merchant, and its tech arm CTS, a futures and options trading platform provider) in April 2021, Plus 500 became a full clearing firm member of the CME (Chicago Mercantile Exchange), the world’s largest financial derivatives exchange.
The market in futures and options on futures in the US represents a major growth opportunity for Plus500 as financial exchanges have increased their efforts to cater for retail investors in recent years.
Since 2017, retail trading volumes in US futures and options on futures market have grown 84%, with the retail market now estimated to be worth around $2 billion.
In today’s announcement, management acknowledged that its strong revenue growth was in part attributable to the ‘substantial progress in the significant and fast-growing US futures market’.
EXPERT VIEW
Peel Hunt analyst Stuart Duncan notes Plus 500 has a very healthy balance sheet and $950 million of cash so he is expecting more share buybacks over the course of this year.
Duncan also said he expected to see ‘significant upgrades' to the consensus EBITDA forecast of $318 million.
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