Plus500 Ltd (LON:PLUS) have speculated on lower annual earnings on Monday, which has seen shares in red.
Plus500 is an international financial firm providing online trading services in contracts for difference, across more than 2,000 securities and multiple asset classes.
The firm has seen its shares dip 4.9% to 811p on the announcement. 6/1/20 11:20BST.
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.
However, it was not all gloomy news for shareholders as the firm said that it gained a boost in the second half of the year which allowed results to recover, it still seems there is much work to do where competitors such as CMC Markets (LON:CMCX) have seen stability.
Chief Executive Asaf Elimelech said, “We finished the year in good financial and operational shape following a period of change for the industry, which has provided a more certain regulatory outlook for Plus500. I am encouraged by the momentum we have shown in the second half, reflecting continued optimisation of our marketing spend, enhancements to our customer service, and improvements in our proprietary technology platform.”
“Looking to 2020 we are confident of the prospects for the group as we focus on further strengthening our customer offering and market positions”, he added.
Third Quarter seems to have saved Plus500
At the end of October, the firm saw revenue and earnings grow in their third quarter, something which the firm alluded to today.
For the quarter ending September 30th, the online contracts-for-differetnt trading service reported revenue of $110.6 million, showing a 10% climb from the $100.1 million figure posted a year before.
Notably, there was a significant increase from the second quarter results where revenues increased 18% from the $94.1 million figure in Q2.
Chief Executive Asaf Elimech commented on the third quarter, saying: “Underlying operational performance and new customer acquisition metrics remain robust. We are confident we can continue to outperform our peer group in terms of customer acquisition, by maintaining the level of highly targeted marketing investment to exploit market opportunities as they appear, with these new customers expected to provide incremental revenues in due course”
There was also consumer gains, where revenue per user increased 1.6% to $997 from 2018’s third quarter figure of $981 and a bigger increment of 15% from the second quarter’s $866.
EBITDA also increased by 39% year-on-year to $70.1 million whilst Ebitda margin widened to 63% from 50% the year before and 57% in the second quarter.
Where Plus500 seem to have struggled, the second half performance of last year will give shareholders something to hold onto.
Plus500 are set to release their 2019 results on February 12, where they will be scrutinized by shareholders and executives.
