Global political and economic disruption, including US tariffs on commodities imports, prompted record pre-tax profit growth for Plus500 (PLUS) during the first half. Increased market volatility pushed new customer numbers up three-quarters to 94,148, which fed through to a 121 per cent increase in active customers to 248,564. Customer churn remained high at 51 per cent on a rolling 12-month basis, although it was down on the prior year rate of 55 per cent.
Scale benefits emanating from the top-line surge effectively reduced the average customer acquisition cost by almost a fifth to $677 (£531m), while adjusted cash profit margins were pushed higher to 75 per cent, from 63 per cent at the 2017 half year.
The process allowing customers to apply for professional (EPC) status was initiated at the end of the first quarter. Initial take-up was slower than expected but has since picked up, with around 5 per cent of the spread-betting specialist’s European customer base electing for EPC status at the period-end, representing around a fifth of second-quarter revenues. Management reckons the recently enacted regulatory changes will potentially affect less than half of European revenues or 30 per cent of the group total.
Analysts at house broker Liberum expect adjusted pre-tax profit of $420m for the year to December 2018, giving EPS of 284.7ȼ (from $253m and 174.5ȼ 2017).
| PLUS500 (PLUS) | ||||
| ORD PRICE: | 1,825p | MARKET VALUE: | £2.08bn | |
| TOUCH: | 1,825-1,829p | 12-MONTH HIGH: | 2,076p | LOW: 723p |
| DIVIDEND YIELD: | 12.2% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 223p | NET CASH: | $512m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
| 2017 | 188 | 116 | 79 | 23.88 |
| 2018 | 466 | 346 | 230 | 137.86 |
| % change | +148 | +198 | +191 | +477 |
| Ex-div: | 23 Aug | |||
| Payment: | 22 Nov | |||
| £1=$1.27 | ||||
