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Corporate efficiency detailed in full as Plus500 releases its annual report for 2013
Plus500 has released its annual results for the full year 2013, which demonstrate what could be considered a predictably strong performance when bearing in mind the company’s high valuation and successful initial public offering during the later stages of 2013.
Last year, Plus500 generated $115.1 million in revenue, which represents an increase by almost twofold compared to 2012, when the company generated $56.1 million in revenue.
Earnings before tax (EBITDA) stood at $67.3 million for 2013, a dramatic increase from the $23.2 million in 2012, standing the company with a net profit at the end of last year of $50.6 million net profit, more than double that of the $17.1 million net profit in 2012.
Earnings per share increased to a more than healthy $0.47 during 2013.
When examining Plus500’s corporate performance during 2013, the growth achieved was 105% compared to the results achieved during 2012. According to Plus500’s report, the growing number of active users and growth in ARPU was particularly pleasing, up 38% to $1,325 compared with $962 one year previous.
EBITDA in 2013 was $67.3 million (2012: $23.2 million), an increase of 190%, with EBITDA margins increasing from 41% in 2012 to 58% in 2013. Results have benefited from the scalability of the Group’s business model with the combination of revenue growth and further improvements in the operational cost structure driving the excellent performance. 2013 Net Profit After Tax was $50.6 million (2012: $17.1 million), an increase of 196%.
The company’s stated dividend policy is to pay no less than 50% of retained profits in each financial year out as dividends. Therefore, the Board has declared a final dividend of $0.1504 per share which was scheduled to be paid on May 1, 2014 to shareholders on the register at close of business on 14 March 2014; the shares were be marked ex-dividend on March 12, 2014.
Plus500 also declared $8.0 million in dividends to shareholders during the first half of the year. This represents a total dividend pay-out of $25.3 million, or 50% of net profit for the 12 months ended December 31, 2013. In addition, the Board has declared a special dividend of $0.1369 per share which will be paid on May 1, 2014 to shareholders on the register at close of business on 14 March 2014; the shares were due to be marked ex-dividend on March 12, 2014.
A remarkable corporate performance, when considering that this company regularly does battle among the leviathans of the industry, commanding a customer base worldwide and maintaining high trading volumes as well as keeping shareholders more than happy, despite its relatively diminutive size. Efficiency, it seams, is the name of the game here.
Plus500 attributes this efficiency partially to its high degree of operating leverage within the business, driven by the efficiency and automation of the Trading Platform, which enables the company to generate a higher average revenue per employee whilst maintaining a relatively and a lower average cost per employee, compared with its peers.
A particular wave of fortune for Plus500 came in the form of a $75 million investment achieved in July 2013 by its listing on the AIM which was supported by institutional investors in the UK, raising the brand value immeasurably.
The usage among retail end users mirrored this dynamic during 2013, with the company having achieved the highest ranking for its smartphone and tablet application in the CFD industry sector, at Apple iStore and Google Play Store, an important and business critical matter, bearing in mind the surge among retail FX firms to invest in continually updating their mobile applications to ensure accessibility regardless of location as a driver of volume.
Unlike some of its compatriots, Plus500 reported an increase in domestic market trading activity in the UK, running counter to that of firms such as IG Group and ETX Capital, both of which have added MetaTrader 4 to their offering in order to appeal to a wider audience, and with IG Group having experienced a downturn in UK activity over recent months compared to its stronger performance in continental Europe.
Indeed, Plus500 has concentrated on increasing its appeal to the British audience, with its CFD product portfolio having increased in 2013 by over 600 new instruments, bringing the total available tototal to more than 1,900 instruments.
As far as managing the expectations of shareholders is concerned, the company’s aforementioned dividend commitment represents 50% of net profit for the 12 months ended December 31, 2013, in line with the company’s stated policy to pay no less than 50% of retained profits in each financial year out as dividends.
Overall, when comparing Plus500’s financial position at the end of 2013 to that of 2012, it is clear to see a giant leap in fortune.
The company arrived at the end of 2013 with a total asset value of $90,093,000 compared with the $25,255,000 recorded at the end of 2012, with net cash provided by operating activities having increased to $57,097,000 compared with just $19,861,000 one year previous.