After a weak first quarter, Plus500, an online service provider for contracts for difference (CFD) trading, has managed to report higher revenue for its second quarter in a trading update filed this Tuesday.
The update, which was published via the London Stock Exchange (LSE), showed that revenue increased to around $94 million in the second quarter of this year.
This is considerably higher (+74.4 percent) than the $53.9 million revenue noted in the first quarter of 2019 and brings the total first-half revenue for the firm to approximately $148 million.
Plus500 rises from Q1 ashes
During the first quarter of 2019, Plus500’s revenue declined to less than a fifth, after regulations implemented by the European Securities and Markets Authority (ESMA) and low volatility hit the trading provider hard.
As Finance Magnates reported, the London-listed company’s stock crashed on the back of the news, dropping by as much as 44 percent, before stabilizing around 550 pence per share, which was still down by 24 percent on the day.
When comparing the first quarter against the second, it is important to keep in mind that the cryptocurrency markets crash in 2018 widely distorted the company’s first quarter in 2019.
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Client spreads increase in Q2
The level of client spreads and overnight charges also increased on a quarter-on-quarter comparison. For Q2, Plus500 reported a level of around $93 million.
This represents an uptick of 13.4 percent from the $82 million achieved in the first quarter. For the first half of 2019, the total is around $175 million.
Breaking revenues down for the first half of the year, around 48 percent was generated outside of the European Economic Area (EEA), and around 23 percent was produced by Elective Professional Clients within the EEA.
“Of note, there were signs of reduced levels of marketing across the Company’s peer group which, along with continued strong and focused marketing investment by Plus500, led to an increase in the rate of new customer recruitment and a reduction in the average cost of acquisition,” the statement released today said.
The company will release its full operational and financial performance figures for the first half of 2019 later this year in August.