Plus500 sees 2021 earnings ahead of forecasts amid record active customers in first quarter

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Plus500 Ltd (LON:PLUS) said it expects earnings and revenues for its 2021 financial year to be “moderately ahead” of current analyst forecasts after the stockbroker reported record numbers of active customers in the first quarter of the year.

In an update for the three months to March 31, the company reported 269,743 active customers, up 39% year-on-year (YOY), while new customers increased 8% to 89,406. Despite this, revenues for the period were down 36% at US$203.2mln, while earnings (EBITDA) fell 47% to US$121.7mln.

READ: Plus500 confident on 2021 although monthly trading results remain volatile

The decline in earnings came amid a sharp drop in average revenue per user (ARPU), which fell 54% YOY to US$753.

Despite the falls in earnings, the company said it is “well positioned to deliver a strong and consistent performance over the medium term” and that it has “multiple opportunities from which to access future growth through both continued organic investment in its technology and targeted acquisitions”.

Plus500 said it is aiming to grow the business by expanding its contract for difference (CFD) offering, launching new trading and financial products and deepening customer engagement.

“Plus500 delivered an excellent performance during Q1 2021, building on the positive momentum achieved in 2020. This performance has been driven by the strength and agility of our technology and its ability to respond rapidly to market developments, news events and customer requirements”, chief executive David Zruia said in a statement.

“Our vision is to enable simplified, universal access to financial markets, as we start to evolve from a technology company solely focused on CFDs to a multi-asset fintech group over time. We aim to achieve this by accessing multiple growth opportunities, through organic investment in our technology and targeted acquisitions. We are already making progress in delivering this vision, as highlighted by Plus500’s excellent performance so far this year. With this progress in mind, and with a market environment that continues to provide compelling trading opportunities for our customers, we remain confident about the outlook for the business”, he added.

In a note on Tuesday, analysts at house broker Liberum raised their target price on the group to 2,090p from 1,945p and retained their ‘buy’ rating, saying they believed the “benefits of the group’s scalable proprietary technology and marketing algorithms are not reflected in the share price”.

“The performance is a testament to the strength of Plus500’s technology and has been achieved as the group continues to manage high platform volumes and further drives towards its goal to be a multi-asset fintech group from solely being focused on CFDs”, the broker added.

Shares in Plus500 were flat at 1,522p in late-afternoon trading.

–Adds broker change and share price–

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