Online financial trading platform Plus500 (PLUS) beat analyst expectations for the third quarter with revenues up 10% to $110.6m.
The headline growth was driven by a 9% increase in active customers to 110,939, while the company added 18% more new customers for the three months to 30 September.
Even better, the cost of acquiring those new customers fell sharply, down 42% to $921. Average revenue per customer rose 2% year-on-year. On earnings before interest, tax, depreciation and amortisation (EBITDA) margins of 63% (up from 50% year-on-year) it means EBITDA jumped 39% to $70.1m.
Shares in the FTSE 250 business rallied strongly on the update, leaping nearly 6% to 833.8p, valuing the business at nearly £924m. That put the stock at the top of the FTSE All-Share leader board on Tuesday.
Chief executive Asaf Elimelech commented, ‘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.’
CONTINUED SHARE BUYBACKS
The company repurchased 1.6m shares in the quarter for $14.7m as part of its $50m programme, leaving cash balances of $297.5m ($327.3m).
Corporate broker Liberum commented that the quarter was a ‘significant’ 11% above their expectation, but it is ‘taking a more cautious view of 2020’ due to the regulatory impact in Australia and slower organic growth of 4%, leading it to trim its revenue forecast by 16% to $364m.
The Australian securities and investments commission has produced a consultation paper and is looking to intervene and put in place tighter protections for retail customers.
Plus500 earns approximately 15% of its revenues from the region, but the board ‘believes that the introduction of the measures will, over time, reduce the number of its competitors, enabling it to gain increased market share at lower customer acquisition cost.’
