Plus500 expects robust financial results despite lower client base
Israeli-based, but London-stock market listed Plus500 today said it expects annual revenue and earnings to be in line with analysts’ estimates.
In particular, the company expects to report full-year revenue at $832 million, up from $718 million in 2021. In a trading update, the online trading platform provider revealed on Tuesday that this performance is supported by a strong level of customer income, which hit $639 million during the year.
Meanwhile, Plus500’ customer trading performance for FY 2022 was approximately $193 million relative to just $15.9 million in the previous year. The broker expects the contribution of this key performance measure to be broadly neutral over time.
Overall, Plus500 said the board now expects FY 2022 EBITDA to grow by more than 17 percent to $454 million compared to $387.1 million in 2021.
Notably, the group continued to add fewer active accounts, saying that 106,000 new accounts were added during FY 2022. The figure was down by 46 percent from the 196,336 clients it onboarded the previous year. As a result, the group’s base of active clients was 280,000 during the year just ended, down by nearly a third from 407,000 in 2021.
Plus500, which recently ended its sponsorship deal with Atlético de Madrid, also saw its Average Revenue Per User (ARPU) improving to $2,817 on a year-to-date basis, up 86 percent from $1,517 in 2021. The figure also rose to $1,445 in the third quarter from $1,271 the year prior. Plus500 attributed the better AUAC result to the proportion of high value customers, which also provides potential for increased future revenues.
In terms of the Average User Acquisition Cost (AUAC), Plus500 reported a meaningful increase as the onboarding costs nearly doubled year-over-year to $1,487, which was well above $750 in 2021.
In its filing to the stock exchange, Plus500 highlighted the progress it made against the group’s strategic roadmap including obtaining a license in Estonia to operate as an investment firm under the brand ‘Plus500EE AS.’ It added that it continues to be debt-free since inception, with healthy cash balances of more than $900 million as of 31 December 2022 alongside high levels of cash generation.
Plus500 also acquired the Japanese FX firm, EZ Invest Securities, in a move that allows the multi-regulated brokerage firm to offer its service in the Asian country. Further roll-out of ‘Plus500 Invest’, the group’s proprietary share dealing platform, remains on track, it added.
Also in the Q4, Plus500 commenced a further share buyback program of $60.2 million, which was announced earlier in August. It follows a previous $50 million special buyback program announced in April.