Plus500’s profit more than doubles to $100 million thanks to solid customer growth and new trading platforms
- The fintech company revealed that underlying profit rose to $100.9 million last quarter
- Plus500 said more than 28,200 new consumers have joined the group’s platform
Plus500 has revealed that its profits more than doubled in the first quarter, supported by strong customer growth and the launch of new trading platforms.
The financial technology company saw underlying profit jump to $100.9 million in the three months ended March, up 116 percent from the previous quarter when the FIFA World Cup caused a slowdown in activity.
More than 28,200 new consumers joined the group’s platform, while the number who made at least one real money transaction in that period increased 5 percent to more than 137,000.
Plus500 specializes in the sale of contracts for difference (CFD), an agreement between an investor and a CFD broker whereby the former wagers on the price of an asset over a period of time
After running short in the fourth quarter of 2022, the company gained $50.1 million on client trading positions, increasing total revenue by nearly two-thirds to $207.9 million.
In February, the Israel-headquartered company was granted a license by the Dubai Financial Services Authority to operate in the United Arab Emirates, a high-growth area.
It also expanded its presence in the US retail futures market with the launch of ‘Plus500 Futures’, after launching business-to-consumer proprietary trading platform ‘TradeSniper’ last year.
However, compared to the same time last year, Plus500’s revenue was 23 percent lower, while its main profit was down 37.6 percent.
The company experienced significant growth at the height of the Covid-19 pandemic as economic volatility and global lockdowns fueled an explosion in amateur investing.
But like other investment platforms, it has struggled to retain clients and attract new ones since lockdown restrictions were lifted.
Nevertheless, the group expects a ‘sustainable’ level of growth in the medium to long term, with performance this year in line with current expectations.
Chief executive David Zruia said: “We have a range of extremely exciting strategic growth opportunities ahead, particularly in the US futures market, which will enable us to accelerate our development as a diversified, global, multi-asset fintech group.”
He added: ‘Supported by further organic investments and targeted acquisitions, we remain confident that Plus500 is well positioned to deliver sustainable growth and strong, consistent returns over the medium to long term.’
Plus500 specializes in selling contracts for difference (CFD), an agreement where traders bet on the future price of a financial asset such as a commodity or stock without owning the asset in question.
Should the market move in the trader’s favour, they will make a profit, the amount of which depends on the amount between the opening and closing price.
In addition to finance, the company is known for sponsoring a range of sports clubs, including the Chicago Bulls basketball team and European football clubs Atalanta, Legia Warsaw and Swiss side BSC Young Boys.
Plus500 shares were 0.2 per cent higher at £17.07 on Wednesday morning and have grown by about 46 per cent over the past three years.