Contracts for difference (CFDs) derivatives trading platform Plus500 (PLUS) confirmed record trading in the year to 31 December 2020 on Tuesday.
The company reported that revenues will come in ahead of the board’s expectations at around $872 million, with earnings before interest, tax, depreciation and amortisation (EBITDA) of $515 million likely.
At the third quarter trading update on 27 October the company said it expected full year revenues and EBITDA to be in-line with consensus market expectations. At the time consensus was pitched at $520 million EBITDA on $829.2 million revenue.
Today’s update implies a 5%-plus beat on the top line and EBITDA ‘broadly in-line’, said the company. That mild profit drift may explain today’s modest reaction, the shares gaining 1% to £14.35 in morning trading.
RECORD NEW CUSTOMERS
The ‘heightened investment’ made to exploit ‘substantial opportunities’ to onboard new customers in the final quarter paid off as new customers and client deposits more than doubled from the fourth quarter of 2019. The number of new customers was higher than that achieved in the third quarter.
The company said it remained confident about the future as it continued to seek growth through organic and acquisitive growth as well as expanding into new markets and new products.
Chief executive David Zruia said, ‘given our robust compliance systems and our regulatory know-how, we are well prepared for the regulatory changes being introduced in 2021, including those being adopted as a result of last month's Brexit agreement.’
LITTLE BREXIT IMPACT
Encouragingly, Plus500 is expected to avoid any major hangover from changes to equity trading of European stocks.
According to CBOE global markets, over $5 billion of trading in European shares left London for European venues on 4 January, following the rubber-stamping of the Brexit trade deal.
Platform Aquis Exchange (AQUIS:AIM) said 99.6% of its European stock trading had moved from London to its parallel trading venue in Paris, for example.
But with a focus on retail investors and zero institutional business, Plus500 appears likely to remain largely unaffected by the shift in the centre of gravity for European stock trading.
Plus500 also said that former chief executive and co-founder Gal Haber is stepping down from the board with immediate effect. Haber will, however, continue to provide consultancy services to the group.
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