Online trader Plus500 boosts expectations despite revenue hit and regulatory crackdown
Online trader Plus500 has increased its traders and expectations for the year despite a regulatory clampdown and low market volatility affecting revenue.
The trading platform reported that revenue in the three months to 30 September dropped 14 per cent on the previous year to $100m due to new European Securities and Markets Authority (ESMA) regulation on retail trading.
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The number of customers using the platform rose eight per cent to 102,043 but the number of new customers fell 51 per cent to 20,684.
The company, which allows individuals to trade contracts for difference on more than 2,200 financial instruments, said higher volatility entering the fourth quarter and the successful retention of its customers meant trading for the year was ahead of expectations.
Chief executive Asaf Elimelech said: “Our results for the third quarter continued to show satisfactory levels of trading activity of our active customers in comparison to previous years, despite regulatory changes and low market volatility.
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“We continue to focus on our core markets and acquiring high value customers supported our innovative technological edge and the prospect of potential new licences outside the European Economic Area.”
Analysts Canaccord Genuity said: “Progress in the third quarter was worse than we had expected in terms of new customer acquisition at 20,684.
“In our view, this does not bode well for forecasts into 2019 and 2020.”
Shares initially jumped five per cent in early trading but dropped to two per cent down for the day during the morning.