Foreign exchange and CFDs brokerage Plus500 has just reported its full 2016 earnings results. The company has posted a record year with growth in revenues totalling almost 20 percent and the number of new and active accounts rising substantially.
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Revenues for the full year totalled
$327.9 million with Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) reaching $151 million, which is higher by 14 percent when compared to last year.
Plus500 recorded a profit of $117.2 million, which is higher by 21 percent when compared to 2015. The total number of new accounts increased by 23 percent to 104,432, while the number of active clients increased by 14 percent to a total of 155,956.
The volatile end of last year greatly facilitated client on-boarding for Plus500 with the Q4 number of new clients increasing 44 percent when compared to last year. Not only that, but the Average User Acquisition Cost (AUAC) declined to $742, which is a whopping 53 percent decline when compared to the final quarter of 2015.
In 2016, as in 2015, there were no net revenues from market P&L
The Average Revenue Per User (ARPU) which Plus500 captures declined somewhat by 8 percent, but was largely offset by the increasing number of new and active clients. The new customers during the final quarter of the year amounted to 15,594. At the same time the number of active clients increased by 46 percent year-on-year to 71,721.
During the fourth quarter Plus500 revenues increased 35 percent to $91.6 million.
The margin in the final quarter of the year has been a whopping 64 percent, reflecting the favorable market conditions and capitalizing on the strong customer acquisition earlier in the year. With the market providing plenty of headlines, the cost of acquisition decreased dramatically as the marketing machine of Plus500 managed to efficiently allocate resources.
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The company has committed to paying shareholders a $101.7 million dividend, which includes an interim dividend of $26.7 million, a final dividend of $43.6 million and a special dividend of $31.4 million. The figure represents an 87 percent pay-out for the year.
Shares of the broker traded over 10 percent higher at the market open in London and are currently changing hands at 460 pence per share.
The company highlighted in its earnings results that the bulk of revenues and signups come from mobile devices. Overall, for the full year 2016, over 70 percent of revenues and signups originated from mobile devices.
The company has committed to paying shareholders a $101.7 million dividend
Commenting on the recent regulatory announcements in Europe, the CEO of Plus500, Asaf Elimelech, said: “Our safe and secure trading account already incorporates a number of the trading controls that regulators are seeking to introduce: we were among the first to offer a trading platform where customers cannot lose more than they invest, and in 2016, as in 2015, there were no net revenues from market P&L.”
“The latter reflects the efficiency of our internal risk management systems and meets the expectations of the regulators that aim to prevent industry participants from being dependent on client losses,” Elimelech elaborates.
The CEO of the company explained that the firm is taking steps to introduce all the necessary changes to comply with the regulatory updates that were announced during 2016.
“Proposals to reduce leverage are expected to have the greatest financial effect. UK regulatory proposals have the most material impact and we note that approximately 20% of our revenues currently go through the UK regulated subsidiary,” Elimelech said.
“Overall, we anticipate that the industry will consolidate around a smaller number of larger participants, of which we believe Plus500 will be amongst the leaders,” the CEO of Plus500 concluded.