The London-listed broker is committing another $50 million for stock buybacks
Plus500 published its interim results for the first half of 2019. Most notably, the firm is committing to a new stock buyback program amid harsh market conditions. The Israeli company is going to spend up to $50 million of its cash reserves to buy back its own stock. The company's stock rallied nearly 20 percent following the news, reaching 680 pence per share as of writing.
The news comes amid tough market conditions and a sharp decline in revenues in the first half of the year. According to the company’s statement, its revenues declined by 68 percent from a year ago to $148 million. The figure is also lower by 42 percent when compared to the second half of 2018.
Net profits of Plus500 declined 80 percent on a yearly basis and by 56 percent when compared to H2 2018 to $51.6 million. Despite the challenging market environment, the firm continues to generate cash. The company’s reserves increased by four percent when compared to the second half of last year to $327.3 million. The figure is nonetheless lower than the $511.9 million reported a year ago.
While the declines might look material, some extraordinary factors are in play. The base effects from increased revenues in the first half of 2018 during which the crypto bubble has burst are certainly affecting the company’s year-on-year figures.
KPIs
Overall the performance metrics of the company improved in the second half of H1 after the extremely low Volatility in Q1. Plus500’s management team also outlined that since the introduction of the ESMA’s product intervention measures in August 2018, Q2 has been new the best for the brokerage in terms of active and new customer metrics.
The number of new customers increased by 23 percent when compared to Q1 to a total of 21,306. During the same period, the number of active clients rose 11 percent to 97,921. For the first half of the year, Plus500 welcomed 47,540 new clients, a figure which is higher by almost 7,000 when compared to H2 2018.
The number of active clients during the first half remained more or less constant with a total of 141,692 placing at least one trade.
In the meantime, Average User Acquisition Costs (AUAC) dropped by 30 percent when compared to H2 2018 and stood at $1,079. Average Revenues Per User (ARPU) metrics also declined, reaching $1,044 - down 42 percent when compared to the second half of last year.
Revenue Diversification
During the first half of the year, a total of 48 percent of the firm’s revenues came in from non-EEA countries. This is an increase of eight percent when compared to the second half of 2018. Revenues from spreads and Swaps totaled about $175 million.
Client despots rose by 41 percent when compared to the second half of 2018. Plus500 also highlighted the decrease in the client churn rate, which reached 16 percent. This was the lowest figure since Plus500’s IPO in 2013.
Commenting on the company’s performance, the CEO of Plus500, Asaf Elimelech, outlined that the group performed very well during what was a difficult period for the entire industry.
“Our first half performance, and trading to date in the third quarter 2019, is consistent with current expectations for 2019. Underlying operational performance and new customer acquisition metrics remain robust,” Elimelech elaborated.
He also highlighted that the company’s board is optimistic about Plus500's future prospects.
Plus500 published its interim results for the first half of 2019. Most notably, the firm is committing to a new stock buyback program amid harsh market conditions. The Israeli company is going to spend up to $50 million of its cash reserves to buy back its own stock. The company's stock rallied nearly 20 percent following the news, reaching 680 pence per share as of writing.
The news comes amid tough market conditions and a sharp decline in revenues in the first half of the year. According to the company’s statement, its revenues declined by 68 percent from a year ago to $148 million. The figure is also lower by 42 percent when compared to the second half of 2018.
Net profits of Plus500 declined 80 percent on a yearly basis and by 56 percent when compared to H2 2018 to $51.6 million. Despite the challenging market environment, the firm continues to generate cash. The company’s reserves increased by four percent when compared to the second half of last year to $327.3 million. The figure is nonetheless lower than the $511.9 million reported a year ago.
While the declines might look material, some extraordinary factors are in play. The base effects from increased revenues in the first half of 2018 during which the crypto bubble has burst are certainly affecting the company’s year-on-year figures.
KPIs
Overall the performance metrics of the company improved in the second half of H1 after the extremely low Volatility in Q1. Plus500’s management team also outlined that since the introduction of the ESMA’s product intervention measures in August 2018, Q2 has been new the best for the brokerage in terms of active and new customer metrics.
The number of new customers increased by 23 percent when compared to Q1 to a total of 21,306. During the same period, the number of active clients rose 11 percent to 97,921. For the first half of the year, Plus500 welcomed 47,540 new clients, a figure which is higher by almost 7,000 when compared to H2 2018.
The number of active clients during the first half remained more or less constant with a total of 141,692 placing at least one trade.
In the meantime, Average User Acquisition Costs (AUAC) dropped by 30 percent when compared to H2 2018 and stood at $1,079. Average Revenues Per User (ARPU) metrics also declined, reaching $1,044 - down 42 percent when compared to the second half of last year.
Revenue Diversification
During the first half of the year, a total of 48 percent of the firm’s revenues came in from non-EEA countries. This is an increase of eight percent when compared to the second half of 2018. Revenues from spreads and Swaps totaled about $175 million.
Client despots rose by 41 percent when compared to the second half of 2018. Plus500 also highlighted the decrease in the client churn rate, which reached 16 percent. This was the lowest figure since Plus500’s IPO in 2013.
Commenting on the company’s performance, the CEO of Plus500, Asaf Elimelech, outlined that the group performed very well during what was a difficult period for the entire industry.
“Our first half performance, and trading to date in the third quarter 2019, is consistent with current expectations for 2019. Underlying operational performance and new customer acquisition metrics remain robust,” Elimelech elaborated.
He also highlighted that the company’s board is optimistic about Plus500's future prospects.
58% of UK Investors Choose Professional Guidance over 'Finfluencers’
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
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Looking to expand your network in #Africa?
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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