Plus500 announced new Chairman and released Q1 Trading update 

plus500

Plus500 today announced  a new Chairman of its Board of Directors and released trading update for the three months ended 31 March 2017.

According the first announcement, Plus500 informs that Penelope Judd, currently a Non-Executive Director of the Company, will become Chairman of its Board of Directors. This follows Alastair Gordon’s decision to step down from the Board, having served as Chairman of Plus500 since the Company’s IPO in 2013. This change will take effect from the Company’s AGM to be held on 1 June 2017.

Ms. Judd has over 30 year of financial services experience specialising in Compliance, Governance, Regulation, Corporate Finance and Audit. Ms. Judd has made a significant positive impact to the Board since joining in 2016 and her expertise is particularly relevant given the regulatory challenges faced by the industry and the Company. Ms. Judd will continue to chair the Regulatory and Risk Committee of the Company, which was established last year and is an important element of the Company’s corporate governance.

The company also announced the appointment of Steve Baldwin as a Non-Executive Director of the Company with effect from 1 June 2017. Mr. Baldwin will complement Penelope Judd, Charles Fairbairn and Daniel King as non-executives of the Company and will be a member of the Audit and the Remuneration Committees.

Mr. Baldwin is currently a non-executive director of Panmure Gordon & Co. plc and Elegant Hotels Group plc. He has an extensive corporate finance background and most recently held the position of Head of European Equity Capital Markets and Corporate Broking at Macquarie Capital until February 2015 when he resigned to pursue a non-executive career. Prior to this Mr. Baldwin was a Director at JPMorgan Cazenove for ten years and was a Vice President of Corporate Finance at UBS from 1995 to 1998. He qualified as a Chartered Accountant at Coopers & Lybrand.

Asaf Elimelech, Chief Executive Officer of Plus500, said:
“I would like to take this opportunity, both personally and on behalf of the Board, to thank Alastair for his invaluable contribution and support in leading the Board at the time of our flotation and over the past four years, which included major events and changes that influenced our Company and our market. His wise counsel and experience will be missed by the board. We wish Alastair all the best.

“Penny joined the Board in 2016 and has already made a meaningful impact, given her strong compliance background and the pace of regulatory change faced by the industry. We are delighted that she has taken on the role as Chairman.

“We are also pleased to welcome Steve to the Board given his recent experience as a non-executive director. His background in corporate finance and broking, both as industry practitioner and board director, will also be a great asset as we continue to develop our strategic plans for the business.”

Following the appointment announcement, Plus500 has released another announcement to publish trading update for the three months ended 31 March 2017.

Overview

  • Significant improvement in profitability and quality of earnings:

– Quarterly revenues of $77.5m and EBITDA1 of $45.8m, an increase of 25% compared to Q1 2016

– Strong EBITDA margin of 59% ahead of market expectations

  • Performance reflects the Company’s efficient business model and improved marketing productivity, despite current regulatory uncertainties in the market
  • Strong operational KPIs:

– Record number of Active Customers2 during the quarter; a 6% increase on Q1 2016

– Average user acquisition cost3 decreased by 31% compared to Q1 2016

– Average revenue per user4 diluted by New Customers5 and reduced market volatility in the quarter

  • Continued expansion of global footprint – new licence in South Africa follows the addition of licences in New Zealand and Israel in H2 2016
  • Renewed sponsorship with Atlético Madrid in January 2017; new Plus500 Brumbies Super Rugby sponsorship underway
  • Directorate changes announced separately today (to take effect from the Company’s AGM on 1 June); Alastair Gordon intends stepping down from the position of Chairman to be replaced by current non-executive director Penelope Judd. In addition, Steve Baldwin will become a new non-executive director

KPIs

Key customer and revenues metrics for the three months ended 31 March 2017 were as follows:

Plus500 Q1 results

*Unaudited

1 Earnings before interest, tax, depreciation and amortization
2 Active Customers: Customers who made at least one trade using money on the trading platform during the relevant period
5 New Customers: Customers who have deposited money into their own account for the first time

Trading review

The Company has reported a strong first quarter’s trading with a record number of quarterly Active Customers. The Board believe this reflects the quality of the customer experience (as measured by strong customer satisfaction ratings) from Active Customers, who have chosen to continue using Plus500’s intuitive and user-friendly trading platform.

The Company continues to focus its marketing activity on acquiring long term, Active Customers who deliver higher lifetime value even when markets are less volatile. The company is pleased that this refocussing has led to strong profit growth in the quarter and this shows the benefit of its low fixed cost structure.

Regulation

Plus500 will continue its rigorous approach to regulation and will ensure its activity is compliant with evolving regulatory requirements in all its territories.

In the first quarter, Plus500 took an active role in responding to the consultation paper issued in the UK and implemented the regulatory changes included within the various circulars which were issued by other authorities, including:

  • In the UK, Plus500 made a comprehensive submission to the Financial Conduct Authority’s (the “FCA”) current consultation, and is awaiting the FCA’s response to the multiple submissions made by industry participants.
  • As a result of developments in France, Plus500 has launched a new version of its trading platform that complies with the limited risk and other requirements of the French regulator.

As the Company has announced on an RNS issued on 25 April 2017, it has reached a settlement agreement with the Belgium Financial Services and Markets Authority (“FSMA”) for the amount of EUR 550.000. The settlement was reached in the context of the public offering of investment instruments, including CFDs as offered by the Company, in Belgium. The settlement does not amount to an admission of guilt or non-compliance by Plus500.

Plus500 will continue to implement necessary adjustments to its business model when required by regulatory changes. The Company reaffirms that it does not have any regulatory restrictions in any of the Group’s regulated markets.

Outlook

Having achieved a record number of Active Customers and reported a strong EBITDA margin in Q1 2017, the Company has entered Q2 2017 with positive momentum. The Board believes that this performance is consistent with current market expectations for the full year.

The Board reaffirms its base 60% pay-out ratio dividend policy, reflecting the strength of Plus500’s business model in its ability to convert net earnings into cash-flow. The Board also retains flexibility to pay special dividends or buy back shares when the Company generates surplus cash, as appropriate.

Asaf Elimelech, the Chief Executive Officer of Plus500, commented:
“Plus500 is pleased to announce a strong quarterly performance, with a significant improvement in its profitability and quality of earnings. We have reported a record increase in Active Customers, which shows the strength of and satisfaction with our trading platform. The strong quarterly EBITDA margin and significant decrease in AUAC reflect improved efficiency and targeted marketing activity and spending.

“We have started 2017 positively; we are confident we can continue to expand and enhance our competitive position whilst successfully incorporating regulatory changes with the minimum of disruption. Our strategy is supported by our strong financial position and cash generative business model, enabling us to deliver good shareholder returns despite short term regulatory uncertainty.”

Source: Plus500 – Chairman appointmentQ1 release

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