Plus500, a London-listed online trading company for retail investors, is revamping its board after a 9 per cent drop in revenues at the start of this year and a regulatory clampdown across Europe.
The company, which enables amateur investors to bet on financial markets using so-called contracts for difference, said Penelope Judd, a former compliance chief at UBS and Nomura and current non-executive director, will replace Alistair Gordon, who is stepping down as chairman. Steve Baldwin will take Ms Judd’s former role.
In the first quarter, revenues fell to $77.5m from $85.2m for the same period last year. However, earnings before interest, tax, depreciation and amortisation were up 25 per cent, to $45.8m.
The number of new clients was down nearly a quarter compared to the previous year, to 22,210. Still, the churn of new customers is slowing. The Israel-based company said that the number of active customers – clients who made at least one trade during the period – were up six per cent year on year, to 71,827. Meanwhile, marketing costs to attract new clients to the platform dropped nearly a third, to $907 a head.
Although more clients were active, they spent 14 per cent less money trading, with average revenue per customer falling to $1,080. The company blamed “reduced market volatility” during the quarter.
Asaf Elimelech, chief executive, said:
Plus500 is pleased to announce a strong quarterly performance, with a significant improvement in its profitability and quality of earnings. We have reported a record increase in Active Customers, which shows the strength of and satisfaction with our trading platform.
Shares in Plus500 closed down 0.7 per cent yesterday, after the Atletico Madrid sponsor announced that it had made a €550,000 settlement with the Belgian regulator.
Belgium’s Financial Services and Markets Authority said this was because Plus500 had offered CFDs in Belgium without having declared its intention to supply CFDs in its prospectus – a prerequisite for trading in the European nation, which has placed tough restrictions on the risky financial instruments.
Plus500 will also have to contact Belgian clients and offer to terminate their contracts at no cost to them and shut down its Belgian website, confirmed FSMA.