Plus500 earnings fall offset by growing customer numbers

Contracts-for-difference trading platform Plus500 reported a drop in earnings for 2015, although the decline was less steep than it had expected as additional marketing and regulatory costs were partly mitigated by customer growth.

In its preliminary unaudited results for the year ended 31 December, the company said earnings before interest, taxes, depreciation and amortisation slipped to $132.9m (£93.3m) from $145.4m.

Meanwhile, revenue rose to $275.6m from $228.9m as the number of active customers grew 29% from 2014 to 136,540.

Chief executive Gal Haber said: “Plus500 had a record number of both new customers and active customers in 2015. Whilst marketing expenses are recognised and paid for when incurred, these new customers are expected to contribute to significant revenue growth and a higher EBITDA margin in 2016.

“We made significant progress enhancing our regulatory compliance and onboarding processes. We were pleased that Plus500UK began accepting new UK customers again in January 2016 and we are not subject to any regulatory restrictions in each of our regulated entities.”

Haber said the company was entering 2016 with more high value customers, an enhanced trading platform and a strong balance sheet, adding that the first quarter should be active, given strong customer additions.

Plus500 was forced to stop taking on new UK clients in May last year and freeze existing trade accounts due to an investigation by the Financial Conduct Authority into its client data verification and anti-money laundering procedures.

Gaming industry software supplier Playtech had announced in June 2015 that it inked a deal to buy Plus500 for around £459.6m.

However, the agreement was terminated in November due to regulatory woes, with Playtech saying it could not fully allay the concerns of the FCA.

The company declared a final dividend of $0.2922 per share, down a touch from the previous year’s $0.3001 per share, but the total dividend will be $0.8405, up from $0.8008.

The board also declared a special dividend of $0.3362 per share, up from 2014’s $0.2657, amounting to a total payout of $38.6m.

Also on Wednesday, Plus500 said Asaf Elimelech will be promoted to joint chief executive officer on 28 February, while Gal Haber will be promoted to managing director.

Haber will then work with Elimelech, who will be promoted to chief executive officer, freeing up Haber to focus all his time on continuing the growth of the business.

Whitman Howard said the numbers look pretty good given the regulatory hiatus in the UK during the year and higher client acquisition costs.

At 1254 GMT, shares were up 4.8% to 534.50p.