What significant factors led Plus500 to report record active customers during Q1FY21?

Source: TheCorgi, Shutterstock

Summary

  • Plus500 Ltd had reported revenue growth of around 121% during Q1 FY21 as compared to Q4 FY20.
  • PLUS had shown around 512% surge in EBITDA during Q1 FY21 as compared to the previous quarter.
  • PLUS had a cash balance of USD 675.6 million as of 31 March 2021.

Plus500 Ltd (LON: PLUS) is the LSE listed financials stock. PLUS’s shares have generated a return of approximately 34.39% in the last 12 months. It is listed on the FTSE 250 Index.

Business Model

Plus500 Ltd is the FTSE 250–listed provider of the online technology platform for trading CFDs (“Contracts for Difference”). Moreover, the Company offers more than 2,500 global financial instruments comprising equities, indices, commodities, currencies, options, and cryptocurrencies. The Customers can trade CFDs in over 50 countries worldwide.

(Source: Company presentation)

Q1 FY21 Trading Update (for the three months ended 31 March 2021, as of 13 April 2021)

(Source: Company result)

  • The Company had reported revenue of around USD 203.2 million during Q1 FY21, increased by 121% from the levels of USD 91.9 million delivered during Q4 FY20, driven by attractive trading conditions.
  • PLUS had shown around 512% surge in EBITDA during Q1 FY21 as compared to Q4 FY20. The EBITDA margin remained around 60%, driven by efficient cost management and a sound business model.
  • With respect to the R&D initiative, the Company had established a new R&D centre in Tel Aviv.
  • PLUS had reported a total of 89,406 new customers during Q1 FY21, which is around an 8% increase from the levels of Q1 FY20 and approximately 78% growth from Q4 FY20. The number of active customers had reached 269,743 during the period.
  • The client deposit stood around USD 673.8 million during Q1 FY21, illustrating increasing customers’ confidence in the Plus500 technology platform.
  • The customer churn stood at 16.2% during Q1 FY21, towards the lowest levels since the IPO in 2013.
  • Moreover, the customer income was USD 221.5 million during Q1 FY21.
  • The Company had a cash balance of USD 675.6 million as of 31 March 2021.
  • The Average Revenue Per User (“ARPU”) remained around USD 753 during Q1 FY21, while it was around USD 427 during Q4 FY20.
  • Furthermore, the Average User Acquisition Cost (“AUAC”) had witnessed a substantial reduction from USD 916 during Q4 FY20 to USD 473 during Q1 FY21, illustrating a significant increase in new customers.

Share Price Performance Analysis of Plus500 Ltd

(Source: Refinitiv, Thomson Reuters)

PLUS’s shares were trading at GBX 1,543.50 and were up by close to 1.35% as of 13 April 2021 at 01:31 PM GMT. PLUS's 52-week Low and High were GBX 1,009.80 and GBX 1,659.17, respectively. Plus500 Ltd had a market capitalization of around £1.55 billion.

Business Outlook

The Company had managed to deliver robust financial performance during Q1 FY21, carried the positive momentum built during FY20. The Board believed that revenue and EBITDA would remain ahead of the expectations during FY21. Moreover, the revenue would be strengthened by the customer income, and EBITDA would get the support of the efficient business model. PLUS would access multiple growth opportunities through accelerated investments in technology and making relevant acquisitions. It would also aim to expand CFD offerings and to launch new trading products. Overall, PLUS is well-positioned to accelerate the growth trajectory in the medium term, driven by a market-leading trading platform and scalable business model.

Comment


Disclaimer