Plus500 warns on 2019 performance

Shares in online contracts-for-difference specialist Plus500 (LON:PLUS) have plummeted by 32.52% to 1,104p (as of 12:50 GMT) after the company warned that revenues for the 2019 year would be lower than market expectations due to new regulation. Revenues for the year ended 31st December were up by 65% and total dividends for the year were increased by 18%.

CEO Asaf Elimelech commented: “We are pleased to report a year of record numbers and performance, well ahead of our original expectations. These results demonstrate both our strong operational performance and differentiation from our industry peers. Our focus on innovation and technology leadership continues to deliver benefits, through the acquisition of New Customers and the continued activity and increasing loyalty of existing ones, evident in the continued downward trend in customer churn.

“It was a momentous year as we successfully completed our move up to the premium listing segment of the Official List and to trading on the London Stock Exchange’s Main Market for Listed Companies, with the subsequent inclusion in the FTSE250 – barely five years since our successful AIM IPO. This listing is already increasing interest in Plus500 and we expect it to further improve the trust and confidence of investors.

“The year was also notable for the introduction of regulatory measures by the European Securities and Markets Authority (“ESMA”) in August 2018. Although we have seen a marked reduction in Group revenue directly attributable to this, we welcomed the new regulatory framework, as it is aimed at ensuring a level playing field across industry providers and increased transparency and fairer outcomes for customers. This creates a backdrop against which we expect Plus500 to excel over the medium to longer term.

“Our operating licences in the United Kingdom, Australia, Cyprus, New Zealand, Israel, South Africa and Singapore, provide a strong foundation in this new environment and the benefits of a diversified revenue stream.

“In summary, our highly flexible business model, industry leading scale and market share, technology edge, lean cost structure and robust financial position will help mitigate the impact of regulatory measures and ensure the delivery of sustained market leading financial performance. We are therefore confident that we can continue to successfully develop our business and expand into new markets, enabling us to continue providing strong shareholder returns“.