PLUS500 revenue and profits drop in 2019, however optimism remains for 2020

PLUS500 Ltd (LON:PLUS) have seen a drop in revenue and profit for 2019, however have remained confident in their 2020 expectations.

The firm told the market that 2019 was a “year of two halves” and praised performance in the second half following the arrival of new trading opportunities.

PLUS500 noted that pretax profit was $189.3 million in 2019, seeing a drop from $503.0 million in 2018, quite a substantial drop when comparing the figures.

Revenue also suffered, and in 2019 totaled to a figure of $354.5 million, down from $720.4 million.

The firm noted that the first half performance in 2019 was bruised by low volatility, as this was particularly seen in the first quarter.

However, this was slightly offset in the second half where performance was driven by “increased trading opportunities identified by customers, reflecting more volatile market conditions during the rest of the year.”

PLUS500 declared an interim dividend of $0.3767 per share, a decrease from $0.6191 a year ago. This lowered the total dividend for 2019 to $0.6501 per share from $1.9977 in 2018.

PLUS500 also announced a new share buyback program that would be commencing, which will run until August 31st managed by Credit Suisse.

Asaf Elimelech, Chief Executive Officer of Plus500, commented:

“We finished 2019 in good financial and operational shape following a period of changes for the industry, which has provided a more certain regulatory outlook for Plus500 and the industry as a whole.

“We were particularly pleased with the strong improvement in financial performance in the second half of 2019 and believe that customer trading patterns have now adjusted following the regulatory changes introduced in Europe last year. We continue to monitor and prepare for any potential product intervention measures that are expected to take place in Australia during 2020.

“I am also encouraged by the trading momentum we have shown through the year end, reflecting continued optimisation of our marketing spend, enhancements to our customer service, improvements in our proprietary technology platform and additional cost optimisation.

“We are further pleased in our ability to provide significant value to our shareholders with the delivery of strong returns representing 100% of our 2019 net profit.

“Looking forward to 2020 we are confident of the prospects for the Group as we focus on further strengthening our customer offering and market positions, thereby delivering growth and further strong shareholder returns.”

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (“MAR”). Upon the publication of this announcement via Regulatory Information Service (“RIS”), this inside information is now considered to be in the public domain.

PLUS500 have maintained their confidence in current trading and are expecting to meet internal expectations for 2020 business.

PLUS500 anticipate the drop in earnings

At the start of January, PLUS500 gave a warning to shareholders about annual earnings, this may have eased shareholders however the results today would have been disappointing.

The firm said that shareholders can expect a substantial drop in earnings and revenue across 2019, following a “period of change within the industry”.

The firm said that its earnings before interest, taxes, depreciation and amortisation is expected to be $190 million, on revenue of $354 million, which will worry shareholders.

This would see the firm drop its earnings by over 62% from 2018, and a 50% fall in revenue.

Although the results today were anticipated, shareholders will be keen to see a fight from the firm to bounce back in what seems to be a tough wider operating environment.

Shares in PLUS500 trade at 944p (+3.71%). 12/2/20 10:20BST.

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