Positive momentum boosts Plus500

But 2019 finished on a high. Relative to the first half, revenues and net profits in the six months to December jumped 40 and 94 per cent, respectively, and earnings per share doubled. Plus500's shares have followed suit, rising by more than 140 per cent in less than a year.

Ironically, the kind of financial headlines that led to Plus500’s whipsawing share price have been good for client activity. While many retail investors sat on their hands in the latter part of 2019, trade-war-themed tweets and flash reports created plenty of noise for risk-tolerant derivatives buyers to trade on.

“Our clients tend to trade according to the flow of financial news in the market,” says chief executive Asaf Elimelech. Wildly conflicting signals in the oil markets has been a boon for commodity-themed derivatives in recent weeks, for example.

Active client numbers have yet to return to their highs, showing no growth in the second half of 2019, and a decline of 34 per cent year on year. However, Mr Elimelech believes the 19 per cent rise in these customers’ average deposits on the platform shows the appetite to trade is improving.

Whether this will remain true for the group’s Australia-based customers – which accounted for 14 per cent of last year’s revenues – is yet to be determined. Later this year, Australia’s securities watchdog is set to tighten leverage limits for CFDs marketed to private investors, broadly assumed to be in line with European standards. Although management has assured investors that the company will “adjust rapidly and efficiently to any future changes”, it is customer adaptation that will likely determine the financial impact. 

Analysts at Liberum expect adjusted earnings per share of 120.2¢ this year and 126¢ in 2021.