Overall revenues for 2013 were up 105% to $115.1 million, versus $56.1 million in the prior year, but it was the fourth quarter figures which really caught the market’s attention. These demonstrated growing traction at the industry upstart which is going head to head with IG (IGG).
Fourth-quarter sales of $50.4 million were 43% ahead of Liberum Capital forecasts as the number of active customers rose to 49,800 in the period, 20% ahead of the broker’s expected number. This growth was achieved profitably with the average user acquisition cost in the final three months of 2013 declining by 14% to $542.
Says Liberum: ‘Acquisition costs declined as brand awareness and trust continued to improve post the IPO. Strategically, Plus500’s non-marketing costs are 1/3rd of the sector average enabling it to outspend peers 4:1 on marketing while achieving sector-leading EBITDA margins of c60%.’
In response to the results, Liberum ‘conservatively’ has upgraded 2014 earnings per share (EPS) by 88% to 61.9c, which at today’s $1.67 exchange rate is equivalent to 37.1p of earnings per share (EPS), and means the counter trades on a price/earnings ratio of 10.8. By contrast IG trades on 15.4-times a consensus call of 42.3p EPS for May 2015.