Do not invest more money than you can afford to lose.
The London Stock Exchange-traded forex and CFD broker Plus500 (LON:PLUS) finally published its H1 2016 results. They showed that the in the six months that ended on June 30, the brokerage has enjoyed strong performance, record revenues and profit and a high numbers of active customers.
The revenues of Plus500 in H1 2016 rose 25% from the same period of last year, to reach $158.8 million. Its profit before tax also increased year-on-year – by 12% and was $58.5 million.
In its statement the company attributes its strong results to its successful marketing campaigns and the rising interest in its cored CFD market, as investors seek diversification of their portfolios. Plus500 also boasted a record number of new customers.
On June 24 (the day when the results of UK’s EU referendum showed that the majority of voters are in favor of Brexit), for example, Plus500 saw the most most signups (17 000) and most new customers (1600) in a single day and a record spread revenue.
The Brexit-related spike in customer interest resulted in 56 929 new customers for the entire first half of 2016, or 9% more than in the same period of last year. This contributed to a rise in marketing, onboarding and acquisition expenses for Plus500 and they totaled an additional $26 million of costs. The high sum suppressed EBITDA margins by 16% for the half year.
Still, Plus500’s EBITDA was $59.1 million (H1 2015: $55.5 million) and posted an increase of 6%. Net profit for the period was $44.5 million (H1 2015: $40.6 million), up 10%.
Despite lower margins, the brokerage remained profitable in every month of H1 2016 and its business model continues to generate a stable cash flow. As per the Plus500 report, as of June 30, net cash stood at $96.2 million, excluding that held in client segregated accounts and after the payment of dividends worth $96.6 million in H1 2016.
For the year as a whole, Plus500 expects margins for 2016 to be slightly lower than 2015 due to the continuing increase in the numbers of new clients and the expenses, associated with the onboarding process. On the other hand, however, revenues and profits from the new clients are expected to partially mitigate the higher costs incurred by the brokerage.
Plus500 offers trading in forex, options, contracts for difference (CFDs), commodities, indices, and exchange-traded funds (ETFs). It operates its own online trading platform for CFDs available in over 31 languages on desktop and Android, Windows and iOS mobile operating systems. According to Investment Trends report from July 2015, it is the second largest CFD provider in the UK.
Plus500 is licensed by three regulators – the Cyprus Securities and Exchange Commission (CySEC), UK’s Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC).
The broker operates in the European Economic Area (EU member states, plus Norway, Lichtenstein and Iceland), Gibraltar, Australia and certain other jurisdictions across Asia, the Middle East and elsewhere. Its subsidiaries include Plus500UK, Plus500AU, Plus500CY and Plus500IL.