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Plus500 Ltd

Plus500 Ltd Subdued financial markets in the quarter weighed on the revenue

Plus500 Ltd (LON:PLUS), a leading online service provider for trading Contracts for Differences (“CFDs”) internationally, today provides a trading update for the three months ended 31 March 2019.

Summary

· Subdued financial markets in the quarter weighed on revenue for the period

· Continued strong New Customer1 acquisition, 21,306 (Q4 2018: 19,405)

· 54% of Group revenue from outside the EEA region (Q4 2018: 40%)

· 49% of Q1 EEA revenues from Elective Professional Clients (EPC) (Q4 2018: 49%)

Key customer and revenue metrics for the period ended 31 March 2019 were as follows:

Q1 2019*

Q4 2018*

% change 

Q1 2018*

Revenue

$53.9m

$154.8m

(65%)

$297.3m

Number of New Customers1

21,306

19,405

10%

72,960

Number of Active Customers2

97,921

101,634

(4%)

218,187

 

ARPU3

$550

$1,523

(64%)

$1,363

 

AUAC4

$1,230

$1,489

(17%)

$502

*Unaudited

[1] A customer who has deposited real money into their own account for the first time

[2] A customer who makes at least one trade using real money on the trading platform during the relevant period

[3] Average Revenue per User

[4] Average User Acquisition Cost

Overview of trading

Group revenue for the three months ended 31 March 2019 was $53.9 million (Q4 2018: $154.8 million). This was behind the recent historic run rate due to extremely subdued financial markets across most asset types. Revenue for the first quarter is stated after $28.1m of positive customer net trading performance (negative market P&L).

The low levels of volatility impacted Active Customer numbers and ARPU. There were 97,921 Active Customers in the period, down 4% on the previous quarter. Encouragingly New Customer acquisition held up well in the quarter, at 21,306, up 10% on the previous quarter.

The Company continued to diversify beyond its EEA retail customer base. In the period, EPCs accounted for 49% of EEA Revenue and ex-EEA revenue made up 54% of Group revenue, although the revenue from these groups typically varies more with market volatility due to the higher average levels of leverage employed. The Company received 915 new applications for EPC status in the EEA, of which 16% were approved.

Share Buy Back

The Company repurchased 410,500 shares in the quarter, for a total consideration of $5.5 million. At the end of March, the Company had completed $7.8 million of the previously announced $10 million buyback programme.

Outlook

Financial markets provided limited trading opportunities for current and new customers in the first quarter. It is impossible to predict market conditions for the rest of the year and therefore too early to draw conclusions about the full year outcome based on the Group’s performance over the first three months.

Underlying operational performance and new customer acquisition remain robust. Plus500 remains extremely agile and will seek to adjust its offering and marketing investment rapidly to exploit market opportunities as they appear, and the Company’s low-cost base will allow it to maximise returns from any incremental revenues. We are also working actively to extend our global footprint and to continue to diversify revenues through growth in current territories and the addition of new operating licences.

Asaf Elimelech, Chief Executive Officer of Plus500, commented:

“Given the level of global political and economic news, financial markets were surprisingly subdued in the period, which reduced the number of trading opportunities for customers. While revenue in the quarter was disappointing, we have much to be encouraged about. Plus500 continued to lead the industry in new customer acquisition, both in absolute numbers and in the efficiency of the marketing spend. Given recent regulatory changes, it is imperative to attract, engage and retain valuable customers and the Company is working on a number of initiatives to extend its reach and further improve the customer experience and the service offered.”