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Plus500 Ltd

Plus500 Ltd Interim Results for the six months ended 30 June 2019

Plus500 Ltd (LON:PLUS), a leading online service provider for trading Contracts for Difference internationally, today announced its interim results for the six months ended 30 June 2019.

Financial Highlights:

 H1 2019*H2 2018*ChangeH1 2019H2 2018H1 2018*ChangeH1 2019H1 2018
Revenues$148.0m$254.9m(42%)$465.5m(68%)
EBITDA1$65.6m$157.0m(58%)$349.0m(81%)
Net profit$51.6m$117.3m(56%)$261.7m(80%)
Earnings per share2$0.45$1.03(56%)$2.30(80%)
ARPU3$1,044$1,785(42%)$1,873(44%)
AUAC4$1,079$1,537(30%)$67759%
Cash$327.3m$315.3m4%$511.9m(36%)
Cash generated from operations$44.4m$161.0m(72%)$334.0m(87%)
Operating cash conversion568%103%(34%)96%(29%)
Dividend Per Share$0.2734$0.6191(56%)$1.3786(80%)

*Unaudited

Note: The prior period used for comparison is H2 2018, as all other previous periods were prior to the introduction of the European Securities and Markets Authority’s (ESMA) product intervention measures on 1 August 2018

·   Company trading in line with expectations; performance improved in Q2 2019, following low levels of volatility in the financial markets in Q1 2019

·   Q2 2019 was the Company’s strongest quarter for new and active customer metrics since the introduction of ESMA’s product intervention measures in August 2018:

o New Customers6 numbers in Q2 2019 were 23% ahead of Q1 2019 (Q1 2019: 21,306)

o Active Customers7 numbers in Q2 2019 were 11% ahead of Q1 2019 (Q1 2019: 97,921)

o 47,540 New Customers in H1 2019 (H2 2018: 40,089)

o 141,692 Active Customers in H1 2019 (H2 2018: 142,804)

o AUAC for H1 2019 was $1,079, a reduction of 30% from H2 2018 (H2 2018: $1,537)

·   Revenue from non-EEA countries represented approximately 48% of the Group’s revenues in the period (H2 2018: 40%)

·   Revenue from customer spreads and overnight charges (“customer income”) totalled approximately $175 million (H2 2018: approximately $193 million)

Operational Highlights:

·   For the second consecutive year, Plus500 has been rated the No.1 CFD provider in the UK8, Germany9 and Spain10 by number of client relationships, and Australia’s best CFD mobile platform11

·   Attracting a growing number of higher value customers, through the introduction of sophisticated trading tools and broadening of the product offering:

o  Over 100 new CFDs introduced to the trading platform during H1 2019, including EUA commodity, Lithium and Battery and Thematic indices and Uber, following its IPO

o  Leading charting functionality launched on WebTrader and iOS platforms (Android following soon), including volume indicators, drawing tools and an extensive range of technical indicators   

·   Customers deposits, net at 30 June 2019 up 41% to $151.1 million (31 December 2018: $107.2 million)

·   Continued decrease in customer churn – Q2 2019 churn rate at 16% is the lowest since the Company’s 2013 IPO

·   First major CFD provider to add WhatsApp to its range of customer support channels, in line with Plus500’s commitment to excellence in customer service

Shareholders’ returns:

·   The Board is pleased to announce an interim ordinary dividend per share of $0.2734 (total payout of $31.0 million), representing 60% of net profit

·   The Board has also decided to commence a share buyback programme, to purchase up to $50.0 million of the Company’s shares

·   Revised distribution policy introduced from next reporting date (H2 2019), to return 60% of net profit to shareholders, with at least 50% of this core distribution being through dividends 

Advisers:

·   Plus500 is pleased to announce the appointment of Credit Suisse as its joint corporate broker, alongside Liberum, with effect from 13 August 2019

Outlook:

·   Overall, the Group remains on track to meet current expectations for 2019

Asaf Elimelech, Chief Executive Officer of Plus500, commented:

The Group performed well during what was a difficult period for the entire industry. Financial markets from February 2019 to April 2019 were very stable, providing a limited number of trading opportunities for customers. Against this backdrop, the Company continued to invest in focussed marketing, with sequential increases in the number of New and Active Customers and in customer retention levels, as well as lower customer acquisition costs.

“Given the market backdrop, we continued to concentrate on delivering significant enhancements to the trading platform, with the addition of functionality which appeals to more sophisticated traders, and to the level of customer service, with Plus500 becoming the first major CFD trading provider to integrate WhatsApp as an additional customer communication channel.

“We are pleased to announce the appointment of Credit Suisse as our joint corporate broker, alongside Liberum, effective as of today. We are confident that this addition will be productive and beneficial to the Group and its stakeholders.

Our first half performance, and trading to date in the third quarter 2019, is consistent with current expectations for 2019. Underlying operational performance and new customer acquisition metrics remain robust. We are confident we can continue to outperform our peer group in terms of customer acquisition, by maintaining the level of highly targeted marketing investment to exploit market opportunities as they appear, with these new customers expected to provide incremental revenues in due course.

“Overall, the Board remains optimistic about Plus500’s future prospects and its potential to create value for all stakeholders.”

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (“MAR”). Upon the publication of this announcement via Regulatory Information Service (“RIS”), this inside information is now considered to be in the public domain.

1 EBITDA – Earnings before interest, taxes, depreciation and amortisation

2 Earnings per share – Calculated based on weighted average number of Ordinary Shares in issue as of 30 June 2019

ARPU – Average Revenue Per User

4 AUAC – Average User Acquisition Cost

Operating cash conversion – Cash generated from operations / EBITDA

New Customers – Customers depositing for the first time during the period

7 Active Customers – Customers who made at least one real money trade during the period  

By total number of relationships with UK CFD traders. Investment Trends 2019 UK Leverage Trading Report

9 By total number of client relationships. Investment Trends 2019 Germany Leverage Trading Report

10 By total number of client relationships. Investment Trends 2019 Spain Leverage Trading Report

11 By own client rating. Investment Trends 2018 Australia Leveraged Trading Report

Plus500 will host an analyst presentation at 9.30 a.m. today at the offices of Liberum, 25 Ropemaker

St, London, EC2Y 9LY.

There is an audio conference call for those who would like to dial in:

Dial in number+44 20 3655 9561
Participant PIN1299000

The presentation materials will be available at https://www.plus500.co.uk/Investors/CompanyReports 

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