Plus500 reports Preliminary Results for the Year 2016
International online trading platform provider, Plus500, reports record preliminary unaudited results for the year ended 31 December 2016.
Financial Highlights:
· Record year with strong revenue growth due to increase in New Customers3 and Active Customers4
· Net profit ahead of expectations:
o EBITDA in line with market expectations following a strong recovery in margins in H2
o Q4 EBITDA margin of 64% reflects the benefit of strong customer acquisition earlier in the year and more targeted advertising expenditure in Q4, yielding stable FY margins
· Another year of significant dividend payments including a special dividend:
o Total dividend of $101.7 million, consists of interim dividend of $26.7 million, final dividend of $43.6 million and a special dividend of $31.4 million, representing a total pay-out of 87% of net profit for the year
Operating highlights:
· Another record year of strong customer growth in excess of expectations and the industry average, reflecting effective marketing and robust business model:
o Active Customers increased 14% to 155,956 (FY 2015: 136,540)
o New Customers increased 23% to 104,432 (FY 2015: 84,858)
· Continue to build international presence and diversify revenues through new licences in New Zealand and Israel
· Maintained leadership positions:
o Second largest CFD provider in the UK5
o Leadership in technology and product innovation:
– a true omni-channel trading experience allowing access to information and trading across PC, web, tablet, mobile or wearable platforms in a device-agnostic manner
– a majority of revenues and signups come from mobile devices reflecting speed of innovation compared to competitors (over 70% of 2016 revenues and signups originated from mobile devices)
Current trading and outlook:
· Entering 2017 there has been a continued increase in New Customers
· Continue to achieve good results from online marketing initiatives and sponsorships
· Expect to broaden footprint and continue to diversify revenues including adding further new licences
· Still assessing likely impact of regulatory changes but highly flexible business model expected to partially mitigate any impact
1EBITDA – Earnings before interest and taxes and depreciation and amortization
2ARPU – Average revenue per active user
3Customers depositing for the first time ever during the period
4Customers who made at least one real money trade during the period
5Investment Trends report, July 2016
Asaf Elimelech, Chief Executive of Plus500, commented:
“We are pleased to announce record annual results. Our continued focus on serving our customers’ trading needs through product innovation and technology leadership, combined with our marketing activity, has led to strong new customer sign ups, reducing churn in H2 2016 and increased customer activity.
Plus500 retains operating licences and is regulated in the United Kingdom, Australia, Cyprus, New Zealand and Israel providing a strong foundation in an ever evolving regulatory environment. Our safe and secure trading account already incorporates a number of the trading controls that regulators are seeking to introduce: we were among the first to offer a trading platform where customers cannot lose more than they invest, and in 2016, as in 2015, there were no net revenues from market P&L. The latter reflects the efficiency of our internal risk management systems and meets the expectations of the regulators that aim to prevent industry participants from being dependent on client losses.
We will make the necessary changes to comply with the regulatory changes that were announced during 2016 and any future requirements, as certain regulators continue to go through a consultation and implementation process, Proposals to reduce leverage are expected to have the greatest financial effect. In this regard the UK regulatory proposals have the most material impact and we note that approximately 20% of our revenues currently go through the UK regulated subsidiary. At the same time, we have a highly flexible business model and a lean cost structure to help mitigate the impact of regulatory changes on our financial performance. Overall, we anticipate that the industry will consolidate around a smaller number of larger participants, of which we believe Plus500 will be amongst the leaders.
We were delighted to announce recently the extension of our existing partnership with Atlético Madrid in football and our new sponsorship agreement with the Plus500 Brumbies, the Australian Super Rugby team; together these sponsorships extend our strategy of increasing our brand recognition and expanding our customer base globally.
As a result, we enter 2017 confident we can continue to develop our business and expand into new markets whilst successfully incorporating regulatory changes with the minimum of disruption. Our strong balance sheet, cash generative business model, geographic diversification and competitive market position are expected to enable us to provide good shareholder returns despite continuing short term regulatory uncertainty.”
Source: Plus500 – Record Preliminary Unaudited Results for the year ended 31 December 2016
