TOP NEWS: Plus500 Shares Drop On 2019 Profit Warning After Record 2018

LONDON (Alliance News) - Plus500 Ltd on Tuesday reported a record year, with a sharp rise in ...

Alliance News 12 February, 2019 | 8:36AM
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LONDON (Alliance News) - Plus500 Ltd on Tuesday reported a record year, with a sharp rise in profit and revenue ahead of expectations, but warned its profit in 2019 will be "materially lower" due to increased spending and new EU regulations.

Shares in the contracts-for-difference trading provider were down 37% in early morning trade at 1,035.00 pence each, the worst performer in the FTSE250 Index.

For 2018, Plus500 nearly doubled its pretax profit to USD503.0 million from USD253.4 million in 2017. The company's revenue jumped 65% to USD720.4 million from USD437.2 million.

Plus500 declared a final dividend of USD0.6191, down 24% on the year before, but the firm's total dividend is up 18% to USD1.9977 from USD1.6867.

"We are pleased to report a year of record numbers and performance, well ahead of our original expectations. These results demonstrate both our strong operational performance and differentiation from our industry peers," said Chief Executive Asaf Elimelech.

The total number of transactions in 2018 increased 6% year-on-year but the firm saw a 46% decrease in new customers during the year following the record levels in 2017.

Plus500 now has 304,616 active customers, down 4.0% on 2017, the average revenue per active user is up 72%, however, to USD2,365 from USD1,379.

Plus500 made a positive operational start to 2019 in terms of customer numbers and trading volumes.

However, Plus500 said 2019 revenue is expected to be lower than current market expectations following its latest assessment of European Securities & Markets Authority regulatory measures.

The company also lowered its profit guidance due to the lower revenue and planned higher marketing spend, saying 2019 profit will be "materially lower than current market expectations".

"Following our latest assessment of the ESMA regulatory measures of August 2018, 2019 revenues are now expected to be lower than current market expectations. However, we have seen positive operational metrics since the start of this year, with new and active customer numbers and trading volumes currently above the levels seen at the end of 2018. The longer-term impact of the ESMA measures is being partially mitigated by increased deposit levels across this customer segment and falling churn rates," the company said.

Plus500 said it has "fully adjusted" to the new industry regulations and welcomes the "significant" measures introduced by the European regulators.

In addition, Plus500 said it is prepared for "various scenarios" regarding the UK's departure from the European Union due to its separate EU licence in Cyprus, through which it can operate in other European jurisdictions.

By Paul McGowan; paulmcgowan@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Plus500 Ltd 856.00 GBX -7.11 -
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