Plus500 Posts Fall in Annual Profit, New Customers

Plus500 Ltd (LON: PLUS), a global multi-asset fintech group operating proprietary technology-based trading platforms, announced Tuesday its preliminary unaudited results for the fiscal year ended December 31, 2021.

Plus500 recorded a drop in annual profits and a drop in the number of new customers, a sign that the pandemic-fueled boom in financial market trading has faded.

Key Results

Revenue was down 18% to $718.7 million from $872.5 million the previous year, while EBITDA was 25% lower at $387.1 million compared to US$515.9 million in 2020. Comparisons look much more favorable compared to 2019 pre-pandemic, however, with revenue up 103% and EBITDA up 101 %.

In the fourth quarter, revenue jumped 75% to $161.1 million from $91.9 million a year earlier, while EBITDA increased 256% to $70.9 million from an EBITDA of $19.9 million in the last quarter of 2020.

The number of new customers in 2021 fell by a third to 196,336 from the 294,728 who signed up in 2020, and the number of active customers fell by 6% to 407,734 from 434,296 last year.

Average revenue per user fell 12% to $1,764 from $2,009 a year earlier.

Plus500 declared a final dividend of $0.3777 and a special dividend of $0.2218. It also announced a new $55 million share buyback program.

CEO Commentary

Plus500 CEO David Rruia said, “Plus500 delivered another excellent operational and financial performance in 2021 and we made significant progress with our strategic roadmap to develop our position as a leading global multi-asset fintech group. Our future growth will be delivered through continued development of our technology, particularly in relation to driving customer retention, successfully obtaining new operating licenses and launching new products. These growth opportunities will be achieved by continued organic investments in our business and through additional acquisitions.”

Wall Street’s Take

Earlier in February, Jefferies analyst Martin Price kept a Buy rating on PLUS with a 2,100p price target. This implies 38% upside potential.

The rest of the Street is bullish about PLUS, with a Strong Buy consensus rating based on three Buys. The average Plus500 price target of 1,882.50p implies 23.7% upside potential to current levels. 

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