Plus500 bumps up full-year expectations again

Online trading platform Plus500 said on Monday that it has "materially" increased its expectations for the year to the end of December 2018 following a strong performance in the second quarter.

The company - which already bumped up its annual expectations last month - said it benefited from higher-than-expected levels of market volatility on the back of geopolitical events, namely surrounding US import tariffs.

Plus500 also said it has begun evaluating its customer base regarding elective professional client (EPC) status following the recent regulatory changes announced by ESMA and reckons that 12% of its customers in the EEA may be eligible for EPC status.

"Given that this 12% generate in aggregate approximately 75% of the group's EEA revenue, the board believes that the group's EPC offering puts it in a strong position to maintain revenue from those customers following the implementation of the new ESMA rules.

"As previously disclosed, the group's performance could be impacted by the rate at which customers request to be reclassified, and are accepted, as elective professional clients."

Chief executive officer Asaf Elimelech said: "Plus500 has performed strongly in the half year period and we are pleased to announce a material increase in expectations for the full year. Despite more normal trading conditions, we continue to benefit from new customers acquired over recent periods trading a wide range of instruments."

"This is clearly encouraging and we have revised our assumptions," Liberum said following the update.

The brokerage upped its price target on the buy-rated stock to 2,491p from 1,994p and lifted its CY18 pre-tax profit estimate by 14% to $404m and its earnings per share estimate to 275.5 cents from 242.1 cents.

"Following Plus500's move to the main market, its continued strong operating performance coupled with its customer acquisition strategy and growth into new territories we would argue Plus should rerate," it said.

At 1320 BST, the shares were up 3.7% to 1,674.60p.