PLUS raises guidance after "very positive trading"

Plus 500 (LON: PLUS) has released a confident and upbeat Trading Update this morning that confirms current trading is "significantly ahead of market expectations".

To confirm, I hold shares in this company.

We will have to wait until 7th August for the full detail in the Interim Results, but Management confirms a very strong first two quarters:

"the Company now anticipates that revenues and profits for the year ending 31 December 2017 will be significantly ahead of current market expectations"

"Overall this has delivered a higher EBITDA margin than the same period last year."

Over the first six months of last year last year, PLUS delivered an EBITDA margin of 37%, based off an EBITDA of $59m and Revenue of $159m. Liberum published a report last month in which it expected H1 EBITDA to be closer to $92m from a similar Revenue base. Today's update implies full year expectations are significantly below new Management estimates.

Part of this looks to be strong trading conditions, and part may be the cut in forecasts many analysts had baked in for the second half of 2017, once regulatory changes kick in.

Recent announcements from the FCA were positive for the main CFD players like PLUS because it pushed any change out to H1 2018 and confirmed a joint approach across Europe.

"With regards to the announcements made by the FCA and ESMA on the 29 June, Plus500 welcomes a co-ordinated approach by regulators and consistent conduct rules across all European jurisdictions."

Group CEO Asaf Elimelech commented:

"We have had a very successful half year, significantly ahead of our expectations. This puts us in a strong position for the remainder of the year."

Shares jumped 10% in early trading before settling up 5% at 572p. The stock is up 72% from its December 2016 low.