Plus500 expects 2021 earnings to smash analyst forecasts

Israeli-based, but London-stock market listed Plus500 today said it expects annual revenue and earnings to be ahead of analysts’ estimates even as it posted a dip in its fourth-quarter metrics.

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The online trading platform provider revealed on Monday that revenues for the October-December quarter were $160 million. Though the figure was significantly higher from just $92 million in the same period a year ago, it was down by almost a quarter from $211 million in the third quarter of 2021.

In a trading update, Plus500 said the board now expects FY 2021 revenue and EBITDA to be ahead of current compiled analysts’ consensus forecasts, which were recently upgraded following the company’s H1 2021 results. In particular, the company expects to report full-year revenue at $718 million, down from $872 million in 2020 but much better when compared with analysts’ expectations of $655 million.

In October, the group reported that its third-quarter EBITDA were $128 million, down four percent from $134.2 million in the comparable three months, which the company described as a period of record performance.

The company attributes its optimistic forecasts to a growing customer base, which is beginning to increase again after the Covid-19 had a mixed impact on its onboarding levels throughout the year.

Notably, the group continued to add more active accounts, saying that they had seen increased levels of trading activity in the fourth quarter, and that revenue from customer income had been strong.

Plus500 to publish FY 2021 preliminary results on February 15

“This exceptional Customer Income performance was driven by a consistently high level of customer trading activity throughout the year. Customer Trading Performance[3] for FY 2021 was approximately $16m (Q4 2021: approximately $(6m)), with the Company continuing to expect that the contribution from Customer Trading Performance will be broadly neutral over time,” Plus500 said.

Plus500 added it had still seen healthy numbers of new customers sign up with 33,000 joining in the fourth quarter, up from 26,169 in the prior quarter. It also onboarded 196,150 new clients in the FY 2021, growing its active customers to 406,000 (Q4 2021: 171,000).

The CFDs broker was also encouraged by its entry into the futures and trading markets following acquisitions of Cunningham Commodities, a futures commission merchant, and CTS, a technology trading platform partner.

The company will issue further announcements as appropriate, with its FY 2021 results, for the period ended December 31, scheduled to be released on February 15, 2022.

“We are pleased to have delivered another strong year of financial performance, as well as making significant progress with our strategic and operational plans to strengthen our position as a leading global multi-asset fintech group. With the Group having further strengthened its positioning during 2021, the Board remains confident about the future for Plus500 and continues to expect that the Group will deliver sustainable growth over the medium to long term,” Plus500 CEO David Zruia added in a regulatory filing.