The UK-based brokerage company Plus500 Ltd (LON:PLUS) today issued an updated regulatory filing indicating that it has experienced a significant uptick in trading volumes and customer activity, which is positively driving “all financial and operational KPIs”. Indeed, the company says it is seeing strong revenue from Customer Income due to the heightened levels of market volatility. Plus500 says it has also experienced gains from Customer Trading Performance which is expected to be neutral over time.
The company also indicated that it is too early to tell how long the recent bout of high volatility will continue during 2020 and stressed that upcoming regulatory changes in Australia could also impact its business going forward. Nonetheless, given that Plus500 had reported upbeat customer activity metrics less than a month ago, the company further predicts that its fiscal year revenue and profitability will be “substantially ahead of current consensus expectations.”
Previously, the broker reported total revenues of $354.5 million for 2019, down 51% from $720.4 million registered a year earlier. EBITDA for 2019 was $192.3 million (FY 2018: $506.0 million), with an EBITDA margin of 54% (FY 2018: 70%). Net profit for 2019 was $151.7 million, down 60% from $379 million registered a year earlier.
We anxiously await information from other brokers around the world to gauge the impact of the recent market volatility surrounding the Covid-19 pandemic. Certainly most should be experiencing a rapid increase in customer activity, but it remains to be seen which companies will be able to capitalize on the recent and most-likely forthcoming market movements. Increasingly important it seems, is the ability of also ensuring continuity of business, for those companies impacted by restrictions in the hardest hit areas where Covid-19 infections are plenty.