Plus500’s 2016 revenue reaches record-high, net profit exceeds expectations

Plus500’s 2016 revenue reaches record-high, net profit exceeds expectations

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Plus500, a UK-based online forex group, reported on Tuesday a record-high preliminary revenue of $327.9 million, posting a growth of 19% from the preceding year. Its net profit amounted also jumped significantly by 21% to $117.2 million in 2016, which is ahead of expectations.

The broker explained the revenue growth with a significant increase in new customers and active customers. New client accounts opened with the broker last year jumped by 23% to 104,432 and total active accounts numbered 155,956, or up 14%.

Plus500’s earnings before interest, taxes, depreciation and amortization (EBITDA) in 2016 was in line with with market expectations and also increased by 14% to $151 million, while EBITDA margin went down to 46% from 48.2% a year earlier.

In Q4 alone, the broker generated a revenue of $91.6 million. Its new and active clients jumped by an annual 44% to 22,420 and 46% to 71,721, respectively. For details, see the table below.

Plus500 Q3 2016

“We are pleased to announce record annual results. Our continued focus on serving our customers’ trading needs through product innovation and technology leadership, combined with our marketing activity, has led to strong new customer sign ups, reducing churn in H2 2016 and increased customer activity,” Plus500 CEO Asaf Elimelech said.

An interesting trend that the broker shares was that a majority of its revenues and signups came from mobile devices. In fact, more than 70% of its 2016 revenues and signups originated from mobile devices.

Plus500 opens 2017 with growing clients, hints of more licenses

The broker has set foot for further growth. Since the beginning of 2017, Plus500 has continued to see an increase in new clients, the broker noted.

“[…] we enter 2017 confident we can continue to develop our business and expand into new markets whilst successfully incorporating regulatory changes with the minimum of disruption,” Plus500 CEO Asaf Elimelech said. “Our strong balance sheet, cash generative business model, geographic diversification and competitive market position are expected to enable us to provide good shareholder returns despite continuing short term regulatory uncertainty,” he added.

In 2016, the broker obtained new licenses in New Zealand and Israel. It said it expects to broaden its footprint and to continue to diversify revenues by adding further new licenses. However, no further details were provided. Plus500 holds licenses in the UK, Australia, Cyprus, New Zealand and Israel.

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.

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.

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