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Few companies, regardless of size and target market, have enjoyed the immense fiscal gains in such a short time that Plus500 Ltd (LON:PLUS) can lay claim to, especially subsequent to its public listing in 2013 on London Stock Exchange’s Alternative Investment Market (AIM) after which the firm’s fortunes rocketed.
That is quite an accolade, especially bearing in mind the technological prowess of Israel’s highly energetic start-up business culture which has spawned more NASDAQ listed recently founded high technology companies than all of Western Europe.
Last week, LeapRate reported that Plus500 had achieved an all time high in terms of revenues for the first quarter of 2015, reaching $82.1 million, by far exceeding its forecast of $69 million which was estimated by the Numis Investment Bank, one of two companies which backs the company.
At the time of the firm’s release of its first quarter results, LeapRate observed that the firm had not only onboarded 33,000 new customers during the first three months of this year, vastly up compared to the final quarter of last year, but had cut its costs in terms of client acquisition, a metric that many firms are highly concerned with as the overall expenses across the industry in acquiring new clients have become very high over the last few years.
Globes’ report echoes this, Plus500’s average user acquition cost (AUAC) for the quarter was $892, lower than its AUAC of $921 for all of 2014, $1,120 for the fourth quarter of last year, and $1,005 in the third quarter.
Gal Haber, the company’s CEO explained “That means we recruited more customers, and paid less for them. We killed two birds with one stone.”
“This is mainly the result of very good and effective work by our marketing department” continued Mr. Haber.
Globes asked Haber about trading trends on the company website, in other words whether investors are more inclined to short positions than long ones, given the peak levels of the markets. He claimed that there is a balance at the moment.
As indicated by the company’s announcement, Plus500 is continuing to invest in the development of its mobile applications, given the fact that a major proportion of the transactions conducted through the company are on tablets and smartphones.
The company’s application, which is compatible with Apple iOS and Google Android operating systems has now been joined by an application based on the Windows operating system, which Nokia Lumia devices support. “This device accounts for about 6% of the cellular devices in Europe,” Mr. Haber explained.
As far as dividends are concerned, the company’s after-tax profit last year was $102.5 million, which represents a 45% profit margin. This equates to an after-tax net profit of at least $37 million in the first quarter of 2015 alone. These profit margins actually make Plus500 Israel’s most profitable publicly traded internet company.
These figures enable Plus500 to distribute generous dividends to its shareholders.
60% of the after-tax profit was distributed, which was previously 50%, amounting to $92 million last year, compared with $41 million in 2013. “The company’s board of directors expresses full confidence in the company’s success and its meeting the market expectations for 2015 as a whole, and in its ability to carry out a policy of distributing a dividend that increases progressively,” the company said in its statement to Globes.