Short bets against Plus500’s (PLUS) shares seem well placed. The spread-betting specialist has warned that revenue for 2019 will miss market expectations, with tighter restrictions on the sale of leveraged products to retail investors having a more severe impact than initially anticipated. That will feed through to “materially lower” profits, as management maintains elevated marketing spending.
The introduction of lower leverage limits for retail investors in August had a stark impact – a 147 per cent annual rise in revenue during the first half, reduced to just 2.5 per cent during the latter six months of 2018. A strong first quarter for cryptocurrency trading was followed by waning interest, which also weighed on revenue growth as the year wore on. New client numbers were down by almost half over the year and by 87 per cent during the fourth quarter. That translated into a 4 per cent reduction in active clients last year, while customer churn improved to 46 per cent, from 62 per cent in 2016.
Analysts at house broker Berenberg expect net profits of $194m (£150.5m) during the year to December 2019, giving EPS of 170.1ȼ (from $379m and 333ȼ in 2018).
| PLUS500 (PLUS) | ||||
| ORD PRICE: | 1,121p | MARKET VALUE: | £1.27bn | |
| TOUCH: | 1,121-1,124p | 12-MONTH HIGH: | 2,076p | LOW: 977p |
| DIVIDEND YIELD: | 13.8% | PE RATIO: | 4 | |
| NET ASSET VALUE: | 247ȼ | NET CASH: | $315m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ)* |
| 2014 | 229 | 138 | 89 | 80.08 |
| 2015 | 276 | 128 | 84 | 84.05 |
| 2016 | 328 | 152 | 102 | 88.52 |
| 2017 | 437 | 253 | 175 | 168.67 |
| 2018 | 720 | 503 | 333 | 199.77 |
| % change | +65 | +99 | +90 | +18 |
| Ex-div: | 21 Feb | |||
| Payment: | 9 Jul | |||
| *Includes special dividends of 15.04ȼ in 2014, 27.29ȼ in 2015, 27.29ȼ in 2016 and 63.5ȼ in 2017 | ||||
