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Plus500 Ltd (PLUS)

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Wednesday 22 October, 2014

Plus500 Ltd

Trading Update

RNS Number : 9412U
Plus500 Limited
22 October 2014
 



22 October 2014

 

Plus500 Ltd.

("Plus500" or "the Company")

 

Business and Trading Update

 

Plus500, a leading online service provider for retail customers to trade CFDs internationally, provides a business and trading update for the three months ended 30 September 2014.

 

In the nine months to 30 September 2014, revenue was $162.4m, 151% higher than revenue for the comparative period of 2013 and surpassing the total revenue generated in the whole of 2013 by 41%, thereby positioning the Company for another year of strong growth. Key customer and revenue metrics for the nine and three month periods ended 30 September 2014 were as follows:

 


FY 2013

9 months to 30 Sept*

% Growth

3 months to 30 Sept*

% Growth



2013

2014


Q3 2013

Q3 2014


Revenue

$115.1m

$64.7m

$162.4m

151%

$20.0m

$56.2m

181%

Number of new customers1

56,819

37,284

47,523

27%

12,658

14,850

17%

Number of active customers2

85,795

62,984

85,101

35%

37,000

43,547

18%

 ARPU3

$1,325

$1,027

$1,908

86%

$541

$1,290

138%

 AUAC4

$632

$689

$826

20%

$632

$1,005

59%

*Unaudited

1 A customer who has deposited real money into their own account for the first time

2 A customer who makes at least one trade using real money on the trading platform during the relevant period

3 Average revenue per user

4 Average user acquisition cost 

 

Strong Growth as the Company's Numerous In-house Initiatives Drive Success

In Q3 2014, the Company continued to experience strong growth worldwide as revenue nearly tripled and the ARPU more than doubled in almost all countries compared with the equivalent period in 2013. Geographically, the vast majority of trading occurred in the UK and Western Europe. Revenue from the UK accounted for 15% of total revenue in the quarter (Q3 2013: 15%), and revenue from the UK combined with Western European countries such as France and Germany accounted for 70% of total revenue in the quarter (Q3 2013: 70%). Overall, in Q3 2014, 94% of total revenue was derived from regulated markets, with the remainder from countries where the Company operates under a legal opinion.  The Company expects the profile of revenues to be similar for full year 2014.

 

The strength of the Company's proprietary trading platform, supported by in-house technical expertise, has continued to allow Plus500 to react quickly to market conditions and offer customers the ability to trade CFDs immediately following events such as the initial public offerings of Alibaba and GoPro. Similarly, with the increased market volatility as a result of the geo-political situation in Europe as well as the changing global macro environment, the Company experienced particularly strong growth in trading in commodities as well as equities. In addition, the success of the Company's proprietary automated marketing platform in improving brand awareness across multiple advertising channels enabled Plus500 to attract a greater number of high value customers.

 

During the nine months to 30 September 2014, the Company added 300 new instruments and, during the third quarter, it reduced the spread of the most popular instruments to very competitive levels, such as FTSE100 (0.88pips), GBP/USD (1 pip), EUR/USD (1pip) and oil (3 pips). The same spreads are offered to the entire customer base. The Company also expanded its live chat feature, to offer more native language support worldwide.

 

As a result of the above, the Company was able to attract new customers and saw ARPU increase to $1,290, representing an increase of 10% on Q2 2014. AUAC was only 1% higher sequentially, however the Company is committed to maintaining its marketing spend and also creating a bespoke campaign to attract a greater number of higher value customers. The Company is comfortable with the increase in AUAC in order to gain higher value customers because the automated function of the marketing machine ensures that it will not, in aggregate, acquire customers that will not generate profits for the Company.

 

Additional Regulatory Approval

Plus500 views its ongoing FCA regulated status as one of its most important assets and the Company continues to invest in its operational and compliance infrastructure to maintain that status. To complement the Company's existing regulatory authorisations in the UK and Australia, post period end, Plus500 has been granted a CFD market maker licence from the Cyprus Securities and Exchange Commission (CySEC) to operate as a regulated investment firm. This brings the Company in line with other CFD providers that maintain multiple licences throughout Europe. The Company will continue to seek additional regulatory approvals in jurisdictions that represent attractive commercial opportunities.

 

Research and Development

The Company continues to invest in R&D in order to maintain its competitive advantage. Over the year, the Company has experienced an increased use of mobile and tablet devices to trade. As previously announced, the Company is working on a Windows phone app, which it now expects to launch within the next six months. This will enable the Company to reach a wider audience. The Company is also working on a next generation version of its web browser, which is also expected to be launched over the next six months.

 

Additionally, the iOS app has been updated to be fully compatible with iOS 8, which occurred on the same day that Apple rolled out the new operating system. The Android version has also been updated and has seen a step up in its usability. The Company believes that these updates also contributed to a higher ARPU.

 

Outlook

The Company entered Q4 2014 with greater momentum and stronger trading compared with Q3 2014. The continuing market volatility, focused marketing strategy and ongoing improvement in the brand's strength are expected to be significant contributors to the Company's ability to gain new customers at an attractive cost. The Company is also on target to add an extra 200 new instruments to its portfolio, which will contribute to the attraction and retention of customers. As a result, the Company now expects to exceed current market expectations for both revenue and profit for the year ending 31 December 2014.

 

Gal Haber, Chief Executive Officer of Plus500, said: "We are very happy to report another quarter of significant growth where we almost trebled our revenues and more than doubled our ARPU compared with last year, as we saw an increase in market activity globally. 

 

"Looking ahead, we entered Q4 with increased momentum as the initiatives we introduced in the previous quarter continue to bear fruit. Our intuitive marketing technology continues to attract and retain higher value customers, which gives us the confidence of exceeding market expectations for the full year 2014."

 

 

Enquiries

 

Plus500

Elad Even-Chen, VP Business Development and Head of Investor Relations

+972 4 8189503

[email protected]

Liberum

Chris Bowman, Thomas Bective

+44 20 3100 2222

Luther Pendragon

Harry Chathli, Claire Norbury, Alexis Gore, Nick Corrin

+44 20 7618 9100

 

 

Conference Call

 

Gal Haber, CEO, and Elad Even-Chen, VP Business Development & Head of Investor Relations, will be hosting a conference call to investors and analysts at 10.00am BST today. The dial-in details are as follows:

 

·   UK: 0808 237 0030

·   Israel: 037208677

·   US: 18669287517

·   International: +44 203 139 4830

·   Passcode: 45755301#

 

An audio webcast of the call can be heard live from 10.00am BST today via the investor section of the Plus500 website: http://www.plus500.com/Investors/Investors.aspx. A replay of the webcast will also be available. 

 

About Plus500

 

Plus500 has developed and operates an online trading platform for retail customers to trade CFDs internationally over more than 2,100 different underlying global financial instruments comprising equities, ETFs, foreign exchange, indices and commodities. The Company enables retail customers to trade CFDs in more than 50 countries. The trading platform is accessible from multiple operating systems (Window, smartphones (iOS and Android) and tablets (iOS and Android)) and the internet. The Directors believe that the success of the Company to date has been primarily due to the proprietary technology it has developed and continues to develop to support the trading platform. The trading platform has been designed to be as intuitive and easy to use as possible. The trading platform has been localised into over 31 languages. The Directors believe that this emphasis on technology, together with the Company's targeted online marketing strategy, has helped to differentiate the Company from its competitors.

 

www.plus500.com

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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