Plus500 Limited Q3 Trading Update (2330N)

TIDMPLUS

RNS Number : 2330N

Plus500 Limited

24 October 2016

24 October 2016

Plus500 Ltd.

("Plus500" or "the Company")

Q3 Trading Update

Plus500, a leading online service provider for retail customers to trade CFDs internationally, provides a trading update for the three and nine months ended 30 September 2016.

In the nine months ended 30 September 2016, revenue was $236.3m an increase of 14% compared to the same period last year. Key customer and revenue metrics for the three and nine month periods ended 30 September 2016 were as follows:

 
                             3 months to 30               9 months to 
                    FY2015        Sept*       %Growth       30 Sept*       %Growth 
---------------  ---------  ----------------  -------  ------------------  ------- 
                             2015     2016                  2015     2016 
---------------  ---------  -------  -------  -------  ---------  -------  ------- 
 
Revenue            $275.6m   $80.9m   $77.5m    -4%      $207.9m  $236.3m      14% 
---------------  ---------  -------  -------  -------  ---------  -------  ------- 
Number 
 of new 
 customers(1)       84,858   17,047   25,083    47%       69,333   82,012      18% 
---------------  ---------  -------  -------  -------  ---------  -------  ------- 
 
  Number 
  of active 
  customers(2)     136,540   52,727   69,989    33%      117,569  131,346      12% 
---------------  ---------  -------  -------  -------  ---------  -------  ------- 
 
  ARPU(3)           $2,019   $1,534   $1,107   -28%       $1,769   $1,799       2% 
---------------  ---------  -------  -------  -------  ---------  -------  ------- 
 
  AUAC(4)           $1,227   $1,468   $1,300   -11%       $1,142   $1,320      16% 
---------------  ---------  -------  -------  -------  ---------  -------  ------- 
 

*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

Overview

Plus500 has reported another consistent quarter's trading, in line with trading reported at the time of the half year results. The Company has continued to experience strong growth in new and active customers and has generated record revenues year to date.

As anticipated, there was an improvement in the EBITDA margin from 37% in H1 2016 to 43% in Q3 2016, showing the strength of the Company's business model and its robust operating platform.

Plus500 also increased its global presence during the period. It announced new licences in Israel (on 30 September 2016) and in New Zealand (on 3 October 2016).

The Company is now regulated by five different regulators: FCA in the United Kingdom, ASIC in Australia, CySEC in Cyprus, ISA in Israel and FMA in New Zealand. This emphasises the importance the Board puts on compliance best practice in the different jurisdictions the Company operates in and the steps the Company has taken in order to provide its customers with appropriately regulated services.

Results

The Company is focused on adding high value customers, and its marketing activity has resulted in revenue from Western European countries being stable and accounting for 75% of total revenue in the third quarter 2016 (Q3 2015: 75%).

In Q3 2016, ARPU stood at $1,107 compared to $1,037 in Q2 2016 and $1,534 in Q3 2015. This is due to a combination of a continuing increase in active and new customers (as new customers do not contribute significant revenue in the quarter they are recruited in) and a slight decrease in customer churn which is consistent with the previous quarter.

The Board believes that the continued growth in new customers, reduction in churn and an increase in the life time value of customers will have a beneficial long term effect on the Company's income and a short term impact on ARPU. In addition, the lifetime value of the Group's customers is increasing, as a greater proportion of higher value customers are being added, as well as the loyalty of customers, measured by their longevity on the platform, is growing.

The Company's AUAC for Q3 2016 was $1,300 compared to $1,347 in Q2 2016 and $1,468 in Q3 2015, and stands at $1,320 for the nine months ended 30 September 2016. The Company continues to make efforts to improve the efficiency of the Company's marketing strategies for acquiring new customers.

Outlook

Having attracted a record number of new customers so far this year through its investment in marketing, the Company intends to focus on profitability for the remainder of the year and consolidate the benefits of this expenditure. The Company has entered Q4 2016 with positive momentum and the Board believes the Company is on track to meet market expectations.

Asaf Elimelech, Chief Executive Officer of Plus500, commented:

"Our third quarter continued the strong progress of the first half, with a significant number of new customers being gained, and margins recovering. We remain on track to achieve our expectations for the year as a whole."

Enquiries

 
 Plus500 
--------------------------------------------------- 
 Elad Even-Chen, Chief Financial     [phone] 
  Officer                            [e-mail] 
---------------------------------  ---------------- 
 Liberum - Nomad and Broker 
--------------------------------------------------- 
                                        [phone] 
 Clayton Bush, Josh Hughes                     2222 
---------------------------------  ---------------- 
 Berenberg (Joint Broker) 
--------------------------------------------------- 
 Chris Bowman, Amritha Murali,          [phone] 
  Marie Stolberg                               7800 
---------------------------------  ---------------- 
 MHP Communications 
--------------------------------------------------- 
 Reg Hoare, Tim Rowntree, Kelsey        [phone] 
  Traynor                                      8100 
---------------------------------  ---------------- 
 

About Plus500

Plus500 has developed and operates an online trading platform for retail customers to trade CFDs internationally over more than 2,250 different underlying global financial instruments comprising equities, indices, commodities, options, ETFs and foreign exchange. The Company enables retail customers to trade CFDs in more than 50 countries. The trading platform is accessible from multiple operating systems (Windows, smartphones (iOS, Android and Windows Phone) and tablets (iOS, Android and Surface), Apple Watch and web browsers). 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 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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October 24, 2016 02:00 ET (06:00 GMT)