Trading platform Plus500's shares crash due to 'surprisingly subdued' markets

Cornelia Mascio
Aprile 14, 2019

Plus500 specialises in contracts-for-difference, which is a high-risk currency instrument.

'While revenue in the quarter was disappointing, we have much to be encouraged about'.

Revenue for the three months through March fell to $53.9m, compared to $297.3m posted on-year.

The low levels of volatility impacted Active Customer numbers and ARPU. The number of active customers also dipped by 4% to 97,921.

On the bright side, however, the number of new customers rose 10% from the previous quarter to 21,306.

The Company continued to diversify beyond its EEA retail customer base.

"Financial markets provided limited trading opportunities for current and new customers in the first quarter and It is impossible to predict market conditions for the rest of the year", added the statement.

Looking ahead, the group said it was too early to draw conclusions about the full-year outcome based on the results over the first three months.

Underlying operational performance and new customer acquisition remain robust. Revenue is also expected to fall.

The company said that a mix of subdued markets, fewer trading opportunities and new regulatory rules conspired to act against growth at the FTSE 250 listed firm.

Peel Hunt said Plus500 is a digital marketing business that relies on a relatively low fixed cost base with variable costs targeting client acquisitions.

Elimelech said on Friday: "Given recent regulatory changes, it is imperative to attract, engage and retain valuable customers and the Company is working on a number of initiatives to extend its reach and further improve the customer experience and the service offered".

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