Plus500 Share Discussion Threads

[base7] 12/7/2022 13:22

Surely for Plus to emphasize again that trading for FY22 will be well ahead of previous expectations with almost 6 months to go is an expression of great confidence in our business model & expected continued growth & may particularly reflect increased traction in our new US business.Companies rarely disclose annual expectations barely halfway through the year & this was originally announced barely 4 months into FY22.On this trajectory we will soon have over $1bill in cash-also an appreciating asset ( currently) V £

[riverman77] 12/7/2022 12:49

Thanks, if it wasn't included last year then at least they are being consistent.

[simplethesis] 12/7/2022 12:37

It's smart to pick up on changes of disclosure, but it you look at the H1 2021 update, dated 17 July 2021, you will see that the format is the same and AUAC is also not given, even though then it was a very low number.

[riverman77] 12/7/2022 12:23

I am aware of the difference - have invested in this on and off for several years so feel I know the company pretty well. The fact is AUAC has been rising strongly - if this continues then it will start to have an impact on profits, unless there is a similar increase in average customer revenues. I guess this is possible if they are targeting higher value customers. Still not clear why they have not included this information in today's udpate though.

[simplethesis] 12/7/2022 12:08

riverman77

You're confusing AUAC, which is a one-time cost per customer, with quarterly ARPU. You haven't done any lifetime analysis of customer cohorts.

[riverman77] 12/7/2022 11:53

Sold out of these a couple of weeks ago and not tempted to get back in. Undeniably a strong set of results and very cheap. However, I have a suspicion that we are well past the peak of retail trading activity (boosted by the pandemic and cash handouts). Volatility is good for PLUS in the short term, but feel if we have a prolonged bear market then many punters will lose interest.

As others have pointed out, underlying client income is falling and expect it will continue to do so. Client losses are also a double edged sword - they may nicely boost earnings in short term but many of those punters will have lost their shirt and won't be returning.

Most importantly, I couldn't see reference to AUAC in this udpate. The previous update showed that this had been shooting up and was actually exceeding average customer revenues! Now this won't have an immediate major effect on earnings, since only a small proportion of customers will leave each year and need to be replaced. However, over time as customers leave and have to be replaced with more expensive cohort of new customers then this will have a big impact. Slightly worried and suspicious why AUAC was not shown in this udpate, when it was always shown on previous udpates. It is a very important metric in my view and we need this information.

[djokovic1] 12/7/2022 11:11

I don’t think comparing to 2021 is useful as it’s was an outlier year. As mentioned on a forward looking basis trades at 5x normalized earnings (ex excess cash). Also there is no reason CTP has to revert to 0. In fact CTP should intuitively be positive. 80% of customers lose money when trading on leverage (not 50%)

[simplethesis] 12/7/2022 11:08

Tourist2020

It doesn't matter what happened relative to history. It's the expectations which are in the share price that matter. If the company can do $152m of customer income in a quarter in which customers are doing so abnormally badly, straight after a quarter in which they also did abnormally badly, then the customer income run rate is considerably above $150m a quarter. Customers cannot generate spread income from money which they have just lost when they were long various markets, just as those markets tanked. In time, however, those same customers reload and trade again. 2023 revenue expectations are $600m. Fine.

Not in current expectations, at all:
US retail
US clearing business
Company buying back 10% p.a. (run-rate)

[tourist2020] 12/7/2022 10:44

Looking at PLUS500 results in a bit more detail reveals them to be not as positive as the headline suggests:
1) Their Active Customers in H2 2022 are 65% of H2 2021
2) New Customer Acquisition in H1 2022 is half the rate of H2 2021
3) Customer Income in H1 2022 is 10% lower than H1 2021, BUT
4) Income per Active Customer in H1 2022 was $1.566 compared to $1.136 in H1 2021
4) All of the supposed revenue growth is from Customer Trading Positions which will trend to zero over time (one mans loss is another mans gain).

And for the CFD/Options regulators, a bit worrying that 1/3 of the declared income is down to customer losses!

[base7] 12/7/2022 07:35

Strong statement,as expected & will result in continued buy backs & an increased dividend per share.Growth & potential in the US is particularly pleasing & planned entry into new high growth markets ,eg Japan, is exciting & will add further to our becoming a truly global Fintech

[simplethesis] 12/7/2022 07:09

Noticeably more detail on the US opportunity in the Liberum note.

In my opinion the key thing not to miss is that the quarterly revenue run rate of Customer Income is higher than you've seen in this quarter. Customers have had two successive quarters of negative Customer Trading Performance. Basically they've lost money much more quickly than normal, and that affects their level of trading, hence suppresses CI.

[rhatton] 12/7/2022 06:48

So despite lower volumes across the industry they still smashed it out of the park and anticipate ahead of expectations again for the year. Let’s see how the market reacts

[barryharmer] 11/7/2022 20:16

Give it a few days for the brokers to transfer from USD to GBP and reconcile. Plus will have paid it, but your broker may not have credited it to your account.

[ramellous] 11/7/2022 12:12

Anyone been paid today yet?

[rhatton] 11/7/2022 11:36

Anyone expecting Pre close update tomorrow?

[djokovic1] 11/7/2022 06:42

As expected Odey had to sell due to external factors (AO World)

[oi_oi_savaloy] 08/7/2022 09:05

Isn't it a bit early in the cycle to say that there will be anything derived from the US market? They've only recently got the access right? Perhaps they're still in the pre-US launch phase, despite having the established access. Just a thought. Might be massively wrong. To my mind you'd want to get on and see it as each day lost if you're not live there but that's just me.

[rhatton] 08/7/2022 08:59

Maybe the capital markets day will reveal more?

[simplethesis] 08/7/2022 08:49

rHatton- no, that's the whole point. It's a major strategic move, with no targets given, yet. if anyone were writing independent research on them and bothered to do the work, there might at least be an estimate out there, but to the best of my knowledge there is not.

[rhatton] 08/7/2022 08:32

Anyone know what contribution the US side of things makes or is forecast to make?

[sailing john] 07/7/2022 18:54

ST I agree however I'm taking the ahead for FY TS and former company founder's massive buy as a big hint that things are going well in Q2. Agree that CTP should average to zero but Q1 very positive and a hint that Q2 similar from last TS. And of course tossing two heads doesn't change the 50/50 odds in Q3 and 4, although might take a few punters out of the game. I'm of course ignoring brokers although I accept some/most will follow.
I plan to reduce position after 1H but trying to avoid cash in the bank earning -10% currently!

[simplethesis] 07/7/2022 18:01

Sailing John- you know this well so forgive me stating what may be obvious, but don’t forget that probably a third of H1 revenues are CTP, so the underlying run rate expectation of H2 is not as wrong as you might think. That’s said, it’s still too low.

Don’t forget also that last time there was a lot of CTP in H1, the CFO had the broker put in equal and opposite CTP in H2 estimates. This was preposterous and illogical, but nicely held down consensus. We will see if the newish joint broker also follows this instruction. In one case the CFO did also build in a buffer by doing this, i.e. when CTP went the other way, this was already in the numbers.

[oi_oi_savaloy] 07/7/2022 17:58

I added some last week too - I'm in agreement with everyone - right now things are going well, and I feel the direction the Board are taking Plus is correct.

[sailing john] 07/7/2022 16:57

I've added again today in the expectation of a very positive 1H TS next week although I can't see a date on the Plus Investor calendar. Consensus forecasts have been updated in late June but are still miles behind likely outturn. Nothing out of the normal there then!
GL SJ