Plus500 Share Discussion Threads

[simplethesis] 12/7/2022 12:08

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 11:44

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 08:35

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 08:09

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 07:48

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 21:16

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 13:12

Anyone been paid today yet?

[rhatton] 11/7/2022 12:36

Anyone expecting Pre close update tomorrow?

[djokovic1] 11/7/2022 07:42

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

[oi_oi_savaloy] 08/7/2022 10:05

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 09:59

Maybe the capital markets day will reveal more?

[simplethesis] 08/7/2022 09:49

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 09:32

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

[sailing john] 07/7/2022 19:54

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 19:01

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 18:58

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 17:57

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

[base7] 07/7/2022 17:39

The update 2 months will hopefully be confirmed by the forthcoming H1 update & also hopefully we will reiterate that we continue to expect trading to remain strong & perhaps our US acquisition is gaining traction.With view to our increasing cash pile we will probably extend the buy backs further once the current $50mill has been invested & our dividends will increase further due to strong trading & less shares in issue.

[simplethesis] 07/7/2022 16:25

I second what the great djokovic1 says, and agree with the numbers, particularly the assessment of the earnings run-rate in H2.

Always remember that the lifetime earnings from each cohort of new customers is remarkably knowable and consistent. CTP will go up and down from quarter to quarter but it's irrelevant in the long run. The fact that the company seldom hedges externally means that reported revenues are more volatile, yes, but also that they don't have to tie up a load of capital on their balance sheet to deal with hedging counterpart risk.

While the cashflows from customers losing money in a somewhat accelerated fashion, as happened in Q1 and is very likely to have happened also in Q2, while they are effectively put on a P/E of zero by the market, since they are non-recurring and in the past, they come to shareholders in two ways: [1] excess capital is used to buy back again and again and [2] they are being used to back a lucrative clearing business in the US.

[djokovic1] 07/7/2022 15:23

Yes but the price is where it was before the 2 announcements were made about trading being significantly ahead (and I think the two months post announcement will also be great)..so one could argue it really isn't in the price

And the other lens to look at it is what P/E is it trading at ex-cash on the balance sheet. At a normalised earnings run rate of ~£2.1 with cash on balance sheet of ~£800m by end of the quarter (lets say excess cash is ~£400m). Thats an ex-Cash multiple of 5.1x

And they are buying back shares at a run-rate of 10% / Annum, so EPS grows 10% while standing still and you get it at ~5x

[rhatton] 07/7/2022 14:48

Of course, just thinking in terms of markets being forward looking, H1 is over now and we know it will be good. H2 remains to be seen

[oi_oi_savaloy] 07/7/2022 14:44

Potentially rHatton but wouldn't they have to rns a material change to their recent (and reiterated) update in that respect (May or June update)?

[rhatton] 07/7/2022 14:33

I wonder if Plus500 could experience a slow down due cost of living crisis?
I know not necessarily evident with last trading statement but Entains results got me thinking this morn

[oi_oi_savaloy] 07/7/2022 13:02

Thanks Djok - appreciate the info :)