Plus500 improved EBITDA margin by 6% and lowered acquisition costs by 11%
Companies: Plus500 Ltd.
CFD trading platform Plus500 (LSE: PLUS) released a mixed trading update this morning reporting
in-line results for the quarter, a 6% EBITDA margin improvement, and posting
record revenues, up 14% in 2016.
The update highlighted
results for the 3 and 9 months to 30 September, and it revealed that the
company performed well over the full period, but had suffered in the last 3
months seeing Q3 revenue fall vs the previous year, and its ARPU - Average
revenue per user (a very significant metric) - fall considerably yoy down 28%.
"The Company has continued to experience strong growth in new and active customers and has generated record revenues year to date.
As anticipated, there was an improvement in the EBITDA margin from 37% in H1 2016 to 43% in Q3 2016, showing the strength of the Company's business model and its robust operating platform."
The fall in revenue per
user was offset slightly by falling acquisition costs (AUAC). It is worth
noting that its annual ARPU is up 2% and AUAC is also up 16% (costing more)
compared to last year.
Plus500 says this is due to
successfully acquiring greater new users who dilute ARPU by their initial
inactivity:
"In Q3 2016, ARPU stood at $1,107 compared to $1,037 in Q2 2016 and $1,534 in Q3 2015. This is due to a combination of a continuing increase in active and new customers (as new customers do not contribute significant revenue in the quarter they are recruited in) and a slight decrease in customer churn which is consistent with the previous quarter."
During the period, Plus500 increased its international
presence, acquiring licences in Israel and in New Zealand. It’s now regulated
by five regulators: FCA (UK), ASIC (AUS), CySEC (Cyprus), ISA (Israel) and FMA
(NZ).
"This emphasises the importance the Board puts on compliance best practice in the different jurisdictions the Company operates in and the steps the Company has taken in order to provide its customers with appropriately regulated services."
Western countries still account for 75% of total revenue, the same ratio as last year.
Stockbroker Liberum said Plus500 had continued to deliver on new customer acquisition, with Q3 delivering 47% Yoy growth, whilst Asaf Elimelech, Plus500 CEO, said:
"Our third quarter continued the strong progress of the first half, with a significant number of new customers being gained, and margins recovering. We remain on track to achieve our expectations for the year as a whole."
