FCA-regulated brokerage firm Plus500 (LON:PLUS) has reported its Q1 2017 financial metrics for the period ending 31 March 2017– the latest figures show a mixed bag in terms of key metrics relative to the year prior, overall trending negative given notable decreases across revenues and new clients figures.
For Q1 2017, Plus500 yielded a revenue of $77.5 million – this correlated to $85.2 million in Q1 2016, or -9 percent YoY. Moreover, the group’s client on-boarding activity slowed in the last quarter with the number of new customers dropping -23 percent year-on-year to 22,210 compared to 28,792 reported back in the same period a year ago. However, the number of active clients reversed the narrative, coming in at 71,827, up from 67,821 over the same period in 2016, which was reflective of a gain of 6 percent YoY.
The group also saw its Average Revenue Per User (ARPU) declining to $1,080 in Q1 2017, down from $1,256 in Q1 2016, or -14 percent YoY. Plus500 attributed the diminishing AUAC metric to the higher number of new customers and reduced market volatility in the quarter.
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In terms of the Average User Acquisition Cost (AUAC), Plus500 reported a better performance as the onboarding costs declined by -31 percent year-over-year to $907 relative to $1,316 in Q1 2016.
At the bottom line, Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) was reported at $45.8 million in the three months through March 2017, an increase of 25 percent compared to Q1 2016. Excluding the additional acquisition and onboarding costs, EBITDA margins were ahead of market expectations at 59%.
Plus500 is retaining its guidance that it will achieve a strong EBITDA margin in the months ahead as it enters Q2 2017 with positive momentum. The firm reaffirms its base 60% pay-out ratio dividend policy, while it also retains the flexibility to pay special dividends or buy back shares when it generates surplus cash.
Finance Magnates reported on Plus500 earlier this morning after the UK-listed firm promoted compliance veteran Penelope Ruth Judd as the group’s new Chairman of the Board of Directors.
Asaf Elimelech, the Chief Executive Officer of Plus500, commented on the Q1 results: “Plus500 is pleased to announce a strong quarterly performance, with a significant improvement in its profitability and quality of earnings. We have reported a record increase in Active Customers, which shows the strength of and satisfaction with our trading platform. The strong quarterly EBITDA margin and significant decrease in AUAC reflect improved efficiency and targeted marketing activity and spending.
We have started 2017 positively; we are confident we can continue to expand and enhance our competitive position whilst successfully incorporating regulatory changes with the minimum of disruption. Our strategy is supported by our strong financial position and cash generative business model, enabling us to deliver good shareholder returns despite short term regulatory uncertainty.”