Fading Covid-19 trading boom sends Plus500’s Q3 revenue down

abdelaziz Fathi

Plus500 Ltd (LON:PLUS) said its revenues and profits fell slightly in the third quarter compared to the three months through September 2020 – but key financial metrics were well above pre-pandemic levels.

Revenues at the Israeli-based, but London-stock market listed platform during the Jul-Sep quarter were $211.4 million, down two percent from $216.4 million in the same period in 2020. However, the figure nearly doubled from $110.6 million in Q3 2019.

Third-quarter EBITDA were $128 million, down four percent from $134.2 million in the comparable three months, which the company described as a period of record performance.

Plus500 added it had still seen healthy numbers of new customers sign up with 26,169 joining in the third quarter, but this was well below the Q3 2020’s figure of 46,238 clients.

The group also saw its Average Revenue Per User (ARPU) improving to $1,271 in Q3 2021 against $1,093 the previous year, or 16 percent higher year-over-year. Plus500 attributed the better AUAC result to the proportion of high value customers, which also provides potential for increased future revenues.

Furthermore, the contribution from trading new instruments and exchanges was also higher, showing notable optimisation of the company’s marketing activity

Plus500 said last month that its board expects FY 2021 revenue and EBITDA to be ahead of current compiled analysts’ consensus forecasts, which were recently upgraded following the company’s H1 2021 results.

In August, the group reported that its revenue increased from where it was in the second half of 2020, though it had fallen from $564 million to $308.3 million over the course of 2020, but has since rebounded in the H1 to $346 million.

The pattern was much the same for the EBITDA. The key metric recovered somewhat from $154.1 million in the prior half year to $187.6 million in the same period of the ongoing year, but nearly halved from $361.8 million a year earlier.

The company attributes its optimistic forecasts to a growing customer base, which is beginning to increase again after the Covid-19 had a mixed impact on its onboarding levels throughout the year.

Notably, the group continued to add more active accounts, saying that they had seen increased levels of trading activity in the third quarter, and that revenue from customer income had been strong.

The CFDs broker was also encouraged by its entry into the futures and trading markets following acquisitions of Cunningham Commodities, a futures commission merchant, and CTS, a technology trading platform partner.

“Going forward, the Company is now making additional substantial investments to develop Plus500’s market position in the significantly growing US retail trading market in futures and options on futures and to support further launches of ‘Plus500 Invest’ in key strategic European countries over the coming quarters,” Plus500 added in a regulatory filing.

 

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