Publicly listed Plus500 Ltd has revealed details of their impressive performance during 2013, as the company unveiled the final version of their annual report for 2013. The main takeaway? Traders go mobile!
With the release of Plus500’s final annual report we are receiving some key details surrounding the company’s impressive post IPO performance. It seems that the concentrated efforts that the company has taken to in source a vast majority of its technological development, as well as the well-targeted marketing efforts in conjunction with a broad “Marketing Machine” strategy, are the main reasons behind the impressive post IPO drive of Plus500’s share prices, which have skyrocketed by 316% since July 24th 2013.
We have already reported on Plus500’s 2013 financial metrics in the preliminary report that accompanied a one-day 28% increase in the company’s float. With the final report providing some additional data, Forex Magnates elaborates on what can be extracted as additional value in case you own a forex/CFD brokerage.
Mobile Trading Accounted for 50% of Revenues and Traders
The first thing that one notices is the structure of the company’s deployment of trading solutions to its customers. It has taken the hard road to develop all front and back-end technology by itself, hence eliminating any costs related to licensing of third party software applications and systems. While it leads to an increase in salary spending, it is well justified, as the research and development team has been successful in implementing a straight forward and simple trading platform for customers of the company.
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As Plus500’s desktop proprietary platform has gained traction in 2012, 2013 was the year when mobile broke out. The app solutions for iOS and Android have both received outstanding ratings of above 4 stars in Apple’s AppStore and Google Play. The company’s IPO in itself has contributed to a positive brand image, but since the mobile products have been confirmed as providing good value by customers, it is not a big surprise that Plus500 claimed victory in the mobile trading space. According to the annual report, 50% of the company’s revenues in 2013 have come from smartphones and tablets.
The “Marketing Machine”
Another proprietary development is a solution dubbed within the company as the “Marketing Machine”. It permitted Plus500 to bid on over one million key words in the major search engines (Google, Bing, Yahoo). The resulting cost effective acquirement of new customers has attributed to the stunning amounts of client growth in the company. The firm did not spare any money on affiliate programs, but it managed to retain acceptable costs without spending an excessive amount of resources.
The company considers its marketing model as one of the key drivers going forward. While near term costs are likely to rise at it engages in some planned offline advertising and potential sponsorship deals, its main focus is on growth in new areas such as Asia-Pacific through its Australian subsidiary.
Additional value can be found in the company’s revelation of its risk management policies – while Plus500 mostly relies on internal risk management, it is hedging client positions after a predetermined amount of limits is hit. The first component of risk management comes from counter exposure by clients themselves to achieve “natural hedge” and the second element is tied to enforcing exposure limits once a certain amount is reached. Once the cap is hit, no new client positions would be allowed or exposures would be hedged outside of the company.