Plus500 registers 60% drop in net profit in 2019

Maria Nikolova

The broker reported net profits of $151.7 million for 2019, down 60% from a year earlier.

Online trading company Plus500 Ltd (LON:PLUS) has just reported its preliminary results for 2019, with revenues and profits sliding from 2018 levels.

Total revenues for 2019 amounted to $354.5 million, down 51% from $720.4 million registered a year earlier.

EBITDA for 2019 was $192.3 million (FY 2018: $506.0 million), with an EBITDA margin of 54% (FY 2018: 70%). Net profit for 2019 was $151.7 million, down 60% from $379 million registered a yea earlier. Earnings per share were $1.35 (FY 2018: $3.33).

Average User Acquisition Cost failed to deliver any positive news either, as it increased 12% on 2018 levels and reached $1,046 in 2019. Plus500 said this reflected its investment in marketing to recruit new higher value customers.

In terms of global regulatory environment, Plus500 noted that, in August 2019, the Australian Securities and Investments Commission (ASIC) released a consultation paper which sets out its proposals to exercise its power to make certain market-wide product intervention orders and imposing certain restrictions on the sale and marketing of CFDs to retail customers. This is anticipated to take place during 2020. Plus500 expects these changes to result in a similar impact on the industry as ESMA’s intervention measures had in Europe during 2018-2019. Plus500’s 2019 revenues for Australian residents represented a total of approximately 14% of Group revenues.

Regarding Brexit, Plus500 says it is well prepared for various scenarios for the UK’s exit from the EU, supported by the Group’s separate EU licence in Cyprus which enables it to operate in EU regulated jurisdictions, in line with applicable regulatory requirements.

Following the year end, in January 2020, a new licence was granted to Plus500 by the Financial Services Authority in the Seychelles.

Let’s note that, in a separate announcement issued today, Plus500 said it intends to conduct a further share buyback program in 2020 to purchase up to $30 million of its shares.

Read this next

Executive Moves

XS.com hires Ahmed Negm, a popular market analyst on CNBC, Sky News, Bloomberg’s Asharq

“Ahmed’s expertise and passion for understanding the intricacies of the financial markets will be invaluable as we continue to grow our client base and expand into new jurisdictions.”

Institutional FX

ATFX uses blockchain to help clients verify IBs and vice versa

ATFX said it has been working on the IB verification project for a few months.

Industry News

Research market in dire straits as SEC’s ‘no-action’ letter on MiFID II lapses in June – survey

“Of all the regulatory news that has hit the research market in the last few months, this is the one change that will fundamentally impact what fund managers can access and pay for in future.”

Executive Moves

Wombat appoints ex-abrdn Richard Charnock as UK platform turns to Europe

Launched in 2019, Wombat provides a dedicated mobile investing platform – available on both iOS and Android – offering users both range and choice.

Institutional FX

Broadridge integrates Point Focal’s pre and post-market reports

“Point Focal provides a unique lens on the market which will help add alpha to the trading process and these new insights will rapidly improve performance while mitigating execution risk and simplify trading.”

Technology

XCritical integrates with Brokeree Solutions, allowing its clients to launch copy trading 

The forex software provider – XCritical, has integrated Social Trading by Brokeree Solutions into their CRM system.

Industry News

HKEX partners with Saudi exchange for cross listings, ESG, Fintech

“The Kingdom of Saudi Arabia, and the broader Middle Eastern region, are one of the world’s most dynamic and exciting economic and innovation hubs and also home to some of the fastest growing investor groups in the world. Hong Kong and HKEX’s markets offer significant opportunities for international investors and corporates, including unrivalled connectivity to the Mainland Chinese markets through our unique Connect programmes. This agreement signals the beginning of even greater collaboration between our companies and our home markets, and we look forward to exploring many future areas of cooperation.”

Executive Moves

CMC Markets Connect relocates APAC team led by Peter Foster to Singapore

“Singapore is a vibrant city and is now undoubtedly seen as Asia’s leading financial hub. The decision to bolster the CMC Markets Connect team here will help us cement the company’s position as a leading provider of multi asset liquidity and comprehensive trading solutions across the region.”

Retail FX

Italian watchdog red flags Olympus Brokers, UnicoFX and Allfina Group

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

<