Plus500 Share Discussion Threads

[chucko1] 28/4/2020 16:05

Djokovic, I do agree. The stock, yet again, traded today as though that information was largely in the price. It was not. To the extent that there were no misstatements, it appears that:

1. They are attracting significantly MORE new customers since April 7th. So that would be on top of those attracted in Q1, which was huge. Also, they were attracted inexpensively.

2. Group showed FURTHER momentum in financial performance following exceptional first quarter.

3. Significantly INCREASED level of customer activity.


Now, all this seems to imply that the RATE of earnings will have increased. Why?

Momentum implies continuity if interpreted literally - so not an increase of pace. Further just means “in time”, so that is continuity, not rate. But MORE customers is likely to be an amount in excess of those who leave, so that is an increase of pace. Increased level of activity may merely incorporate the higher number of customers, rather than the activity per customer, so that may not be an increase of overall pace.

But taking the three items in aggregate, all you need is for one of them to be an increase in pace and the other two to be a continuation and voilà - you should get higher Q2 revenue than Q1.

Especially as there were no clauses in the ts that could imply any slowing down of any factor, and therefore contradict my previous conclusion.

It may still fall today! But like I’ve said before, bring it on. I welcome stupidity.

[djokovic1] 28/4/2020 15:41

Well, Im surprised that Plus hasnt gone lower today, given that how the market generally reacts to Plus's positive trading updates :)

Every sentence of that trading statement was extremely bullish,we just have to wait for the market to catch up.

[psychochopper] 28/4/2020 14:05

Ya - if this ends over 1300 tonight, wear diamonds next week.

[the white house] 28/4/2020 14:04

29k trade just gone though @ 12.95

[psychochopper] 28/4/2020 13:53

If there's a seller in size, they need therapy.

[the white house] 28/4/2020 13:44

Just those round number devotees ; bounced off year high 1300ish 3 or 4 times today. Will be out of the way given time

[sailing john] 28/4/2020 13:37

"jw33028 Apr '20 - 13:25 - 22507 of 22509

Is there a bit seller offloading atm? Price action suggests the market is not bothered about this result..."

The Market doesn't understand the result!
All PLUS are saying is ahead of expectations so unless you have broken down the likely monthly income for Q1 you won't be aware that Q2 likely to be significantly better than Q1 which basically comprised two normal months and one exceptional month and a chunk of Customer P&L

As I said before, unless PLUS spell out actual Revenue and perhaps even PAT/eps in the post 1H TS in July we will have to wait until 1H results in August to get the full Share price impact of an exceptional and record 1H. Mr M never manages to keep up with events here!

Edit - sif12 - typing whilst you posted but we are on the same page!

[sif12] 28/4/2020 13:32

JW no big sellor i dont think, but no big numbers in the trading statement so the casual investor reader isnt going to get excited unless they do a bit of digging which lets be honest most wont do.

hence why i do think its helpful to have a bit of analysis on numbers whether lightweight like mine or more substantial like SailingJohn :)

[fxprotrader] 28/4/2020 13:27

If there was a seller in size the trades wouldn't show yet

[galileo8] 28/4/2020 13:26

Volume says not

[jw330] 28/4/2020 13:25

Is there a bit seller offloading atm? Price action suggests the market is not bothered about this result...

[galileo8] 28/4/2020 12:49

Price target upped to 16,80 at Liberum

[aleman] 28/4/2020 10:48

Stop being so pessimistic, sj. ;-)

People suggest Brexit will be nothing after the virus but all the central banks and government treasuries departments weighed in quickly to support markets after virus effects hit home. Don't expect coordinated support for Brexit.

[sif12] 28/4/2020 10:47

Any other shares you're all buying right now?

[sailing john] 28/4/2020 10:31

Aleman - You might not be aware that they have committed in writing to return 60% of earnings immediately at 1H and FY. At least half of this ie min 30% of earnings will be by divi and the balance via buybacks. They have in the past always returned further surplus cash to shareholders - often 100% of earnings via specials keeping the bank balance at around $300m.

Actual wording from results
"The Company's dividend policy is to return at least 60% of net profits to shareholders. This will be distributed through a combination of dividends and share buybacks, with at least 50% of this distribution being made by way of dividends. This policy applies to net profits on a half-yearly basis. The Board will continue to assess the availability of any excess capital and prioritise its use, as it has always done, and carefully evaluate any identified opportunities against the long term benefit of organic investment or additional returns to shareholders."

Edit - Chucko - I agree with your logic

[chucko1] 28/4/2020 10:24

SJ, it’s worth pointing out that 1700p (lets say in a years time) would reflect “normal” earnings of 170p. But 450p of earnings until then needs to be either paid out or left on the balance sheet. So in today’s money, that’s like 2150p, a return of over 60%.

I’m not sure we do see a multiple of 10x, but then I’m not sure we go as low as 170p next year. 200p is 8.5x and about 7.5x ex-cash. The calculations are tricky owing to such rapid cash accumulation, but that’s ok!

[markbelluk] 28/4/2020 10:24

SJ thanks for the analysis

I have a MINIMUM dividend for the year of £1.34 as "minimum return to shareholders of 60% via divis and buybacks, with at least 50% of this distribution being made by way of dividends" so its 30%

I also expect a special dividend and more directors buying very soon

[aleman] 28/4/2020 10:22

Thanks, sailing john. I suppose 150p interim dividend and another 150p final would do. ;-) How much they want to declare as regular and special is up to them!

[sailing john] 28/4/2020 10:11

Apologies for the long post but in case anyone missed my previous forecast and workings I have copied below.

I calculated Q2 Revenue at $320m +/-? for Customer P&L - giving a 1H eps of 313p

Today's TS supports my calculations and following the further oil price crash this month it looks like significantly positive Customer P&L in Q2 is nailed on

So my initial estimate likely to be beaten and Q2 may come in at up to $400m giving a 1H eps of circa 350p
They have committed to a minimum return to shareholders of 60% via divis and buybacks (60% likely to be over 200p for 1H) but often add specials where cash surplus to requirements

So I agree with djokovic's possible 200p interim dividend (plus further buyback commitment?)

I think we will see a further ahead TS either before of immediately after 1H end taking us North of 1500p. But as Mr M doesn't appear capable of converting TS's to Revenue or eps we might have to wait until actual 1H results in August to see price push on to £17+ which is not out of line with my cautious forecast for 2021 of eps 170p and a PE of 10 (and that takes no account of the cash in bank likely to be $300-500m)

Previous workings
sailing john - 17 Apr 2020 -
My forecast for Q2 is $320m - detail below - comments welcome

As several people have said over recent days and weeks it is obvious that most of the Revenue in Q1 came in the last 5 weeks of Q1

Volatility didn't start to kick in until Monday 26th Feb
FTSE close Friday Feb 23rd at 7360 little change from Jan/Feb
VIX CoP 22nd Feb was 16 - again little change from Jan/Feb

So looking at likely individual month revenues for Q1
Jan $35m - unchanged from 2H 19 where run rate about $100m/Quarter
Feb $50m - 3 weeks low volatility and 1 week ramp up to high volatility
Mar $150m - Being Q1 Rev $317m*74% less Jan and Feb (ie excluding customer P&L)

Also worth noting that the ramp up of new customers won't have been instant and is likely to have increased throughout March. So opening active customers in April likely to be higher than the average for March.

So my forecast for Q2 - and I view these as cautious but don't include any +/- for Customer P&L
Apr $150m - Assumes similar Rev to March with high active customers and volatility
May $100m - Assumes reduction of volatility and some decrease in active customers
Jun $70m - Further reduction in volatility and active customers
Total for Q2 $320m (+/- $50m customer P&L?)

This gives 1H Rev of $637m and my model PAT £334m EPS 313p just for half year
I have assumed a tail off of Rev in 2H - Q3 $180m and Q4 $150m

So for full year I have the following
Rev $967m
PAT £478m eps 450p
I leave you to work out your own PE and Yield!!!!

In 2021 I have assumed a glide path reduction with Quarterly income of $130/120/110/100m
Giving 2021 Rev of $460m and an eps of around 170p

Diary of TSs Director buys below - given current market forecasts I'm expecing a mid Q2 TS followed by a Q2 end TS before 1H results and a move up on each TS of 100-200p taking us well North of 1500p post results which is reasonable even for 2021 eps not just the 2020 windfall - if that is what it is!

28th Feb - TS ahead for quarter
3rd-9th March - Directors buy 0.75m
16th March - TS ahead for quarter and full year
17th - 20th March - Directors buy 2.3m

[sif12] 28/4/2020 10:06

USO started selling off their june contracts hence the fall in oil yesterday today.. they will maintain a similar position going forward as will some of the other big buyers, meanining Contango will stick around for Q2 and into Q3.. so volatility for PLUS

[markbelluk] 28/4/2020 10:03

LIBERUM RAISES PLUS500 PRICE TARGET TO 1680 (1500) PENCE - 'BUY'