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Plus500 Ltd Shares Hit Record High after Q1 Trading Update

The company's market capitalization reached as high as $1.29 billion after the record revenues the firm reported.

According to a trading update statement issued by Plus500, the company registered several records in the first quarter of 2015 ending on the 31st of March. The broker announced that revenues had increased 35% year-on-year to $82.1 million. When compared to the final quarter of 2014, the figure rose just over 23%.

The increase in Plus500’s revenues has been primarily driven by the record amount of new and active clients. New customers increased by 63% when compared to last year to 32,880. The number of active traders has risen by 34% for the same period coming in at 67,667.

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Both figures are new records for the firm by a huge margin, especially in the case of new clients. The previous record quarter for new clients was reported in the first quarter of 2014 when a total of 20,124 customers opened accounts with Plus500.

After the market open, the shares of Plus500 have marked a new all time high reaching 759.50 pence per share moments after the stock opened for trading.

The record comes after the firm survived rumors about a Financial Conduct Authority investigation about the firm’s client on-boarding process last year. At the time, Plus500’s stock dropped below 400 pence per share. After fully recovering last month and setting a new high in the aftermath of the firm’s full year results for 2014, the market corrected in the second half of March only to set the new record high today, valuing the company at just above $1.29 billion (£872.5 million).

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UK market growth

The average user acquisition cost (AUAC) mildly decreased when compared to the full year 2014. The figure was reported at 3% lower at $892. With alarm bells ringing about AUAC levels in previous quarters, this quarter’s earnings report puts some speculations at rest, at least for the time being

The other key metric catching the vigilant eye of investors is the average revenue per user (ARPU). Those figures have remained more or less flat when compared to a year ago, and to last quarter at $1,214.

The company explained in its announcement that the revenues of the firm were coming primarily from its core regulated markets, which are located in the U.K. and Western Europe. Just as some other companies in the industry reported the sudden Swiss franc move as one of the reasons behind trading becoming more popular amongst retail clients.

The CEO of Plus500 Ltd, Gal Haber, commented in the announcement, “We are pleased to announce a record quarter ahead of market expectations. Plus500’s worldwide brand coupled with our superior proprietary technology along with market volatility contributed to this strong performance.”

“We are also proud to be a new sponsor to Atlético Madrid Football Club, the defending La Liga champions and last year’s Champions League finalist. Atlético is one of the leading clubs in the world and a natural fit for Plus500. We believe the increased brand awareness resulting from this partnership will help strengthen our position as a leading CFD trading platform,” he explained.


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