The efficient business model which is operated by Plus500 Ltd (LON:PLUS) is continuing to bear fruit as today’s announcement by the company of its revenues for the fourth quarter of 2014 demonstrate record revenues for the company at $66.5 million compared with $50.4 million in the final quarter of 2013, representing a 32% growth over the final 3 months of 2013.
As far as figures for the entire financial year 2014 are concerned, Plus500‘s revenue increased by a remarkable 99% to $228.9 million compared with the company’s performance during the entirety of the 2013 financial year which brought revenues of $115.1 million.
Some highlights from Plus500’s report include:
- Record quarterly revenues of $66.5 million in Q4.
- Total 2014 Revenues of $229 million.
- Plus500’s EBITDA margin continues to rise even as it grows. 2014 EBITDA came in at $145 million, or 62.5% of revenues, versus 58.5% last year.
- In terms of outlook, Plus500 reports ‘sustained strong growth in 2015’.
Any negatives? Well, they’re hard to find. We did note that Plus500’s customer acquisition cost has risen somewhat, hitting $1,120 in Q4 (compared to just $632 in 2013). But that’s splitting hairs in what is otherwise a very impressive Q4 and 2014 report.
The final quarter’s record revenues for Q4 contributed greatly to the nice annual total, however the firm’s stellar performance during the entire year is indeed remarkable. During the third quarter of 2014, the firm tripled its global revenue from last year’s Q3.
Earnings before interest and taxes (EBITDA) for the 2014 financial year increased 116% to $145.4 million over the $67.3 million achieved during the 2013 financial year, and EBITDA margin increased to 63.6% whereas in the previous financial year it was 58.5%.
Net profit increased 102.6% to $102.5 million (FY 2013: $50.6 million) and earnings per share increased 89% to $0.89 (FY 2013: $0.47).
Average revenue per user (ARPU), an important measure in times when acquisition and retention costs per client are at a very high level, increased 63% to $2,160, whereas during 2013 financial year it was $1,325.
APRU increased 30% during the last quarter of 2014 compared to $1,315 compared to $1,011 in the final quarter of 2013.
Operating cash flow for the entire financial year of 2014 weighed in at $118.9 million whereas during the 2013 financial year it was $57.1 million.
There will be a final dividend per share of $0.3001 (total pay-out of $34.5 million) and a special dividend per share of $0.2657 (total pay-out of $30.5 million), for a total dividend pay-out of $65 million with ex-dividend date 19 March 2015.
The total dividend for 2014 was $92 million, representing a pay-out of 90% of net profit for the 12 months ended 31 December 2014 and the company’s dividend policy increased to a 60% pay-out ratio with flexibility to pay special dividends as appropriate.
These figures represent a record-breaking year of strong revenue and profit growth in 2014. This reflects growth in all active territories with revenue increasing by 99% and ARPU increasing by more than 60% compared with 2013.
Overall, in 2014, 94% of total revenue was derived from regulated markets, with the remainder from countries where the Company operates under a legal opinion. The Company continued to gain market share in the UK with its revenue from the country increasing to 16% of overall revenue compared with 15% in 2013.
An interesting matter that Plus500 has taken into account is the evolving nature of risk management strategies in the FX industry, particularly subsequent to the Swiss National Bank having removed the 1.20 peg on EURCHF which created a dramatic appreciation of the Swiss franc, leaving many FX firms exposed to negative client balances and in the case of firms which sustained the losses, would seek to pursue large institutional clients for repayment.
Plus500 details that its target audience is exclusively retail customers and the platform is not available to institutional traders. As a result, no single customer contributes more than 0.5% of total Company revenue.
The Company’s risk management framework ensures that risk exposures are strictly limited resulting in consistent revenue generation with low volatility. Plus500’s market risk framework is effective in ARPU maximisation with minimal losses. The worst and best daily revenues in 2014 were $-0.61 million and $4.4 million respectively. The average daily revenue was $0.63 million in 2014.
Post year end, Plus500 notes the extraordinary volatility in the markets caused by the Swiss National Bank’s decision and affirms that the Company’s risk management processes focus on limiting the total gross and net exposure to any one instrument and, as a result, material exposure to Swiss Franc and other currency pairs did not arise. The Company had positive daily revenue on the day and benefitted from record numbers of new and returning retail clients attracted by the volatility of the day’s trading.
Gal Haber, Chief Executive of Plus500, commented: “We are delighted to announce another year of strong growth, once again achieving record levels of both revenue and profits with an increase occurring in almost all countries in which we operate. In particular, the Company saw a strong finish to the year as volatility in the financial markets resulted in greater trading on our platform.
“Looking ahead, we continue to build our brand online as well as through traditional offline channels such as sponsorship of Atlético Madrid Football Club. We are also maintaining our technological lead through innovation and development to give our customers ease of access to our platform via the PC or any mobile device. The Board believes that its marketing efforts to reach new customers will continue to give the Company momentum resulting in sustained strong growth in 2015,” concluded Mr. Haber.
For the official announcement from Plus500 which includes its commercial balance sheet, click here.