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Ok 14cr. My only point was RNS was extremely clear. and having first invested in Plus 3 years ago (I sold when the new rules came in 2018-2019) and reinvested early this year... gradually building it up... so have been tracking them closely.
The current market volatility, will only increase as we get into crucial October and Nov. So I have no doubt plus reaching all time highs and then can move quickly.... ; And this is a beautiful hedge against rest of the Covid+US tech bets...
14cr - It's my interpretation. If I say "the weather was lovely last week, and, in particular, Thursday", I'm saying that the characteristic I ascribe is greater or stronger for the subset. The statement said to me that CI was stronger than revenue.
I totally agree that yesterday is likely to have been a great day.
Yep we’re on the same page gg.
Simple - Interested to hear why you think CTP is negative? We’re told ‘revenue, in particular CI, is strong’. My read is that CI is clearly performing well, but can’t read into whether CTP is positive or negative, just that CI is driving the majority of revenues. I also would’ve thought days like yesterday are materially profitable for PLUS.
Cheers ggplyr. The statement says that revenue is also strong. The issue will be that the book is huge now and CTP can move around a fair bit. As a shareholder you should want this, in that the volatility of revenues is the small price you pay for the massive benefit of losing not a cent in external hedging costs. IG loses approximately a quarter of its gross revenues from customers to such costs.
The lovely thing about short-term sell side numbers is that 2020 numbers will have to go up even if CTP were, somehow, a very material number.
As for forecasting, I'd agree at least that the company could give a range of Customer Income forecasts. I'd note that the H1 presentation gives, for the first time, lifetime value evolutions of previous annual customer cohorts. That gives you a real steer on what sort of revenues a customer brings in Y1 and Y2 and beyond; the point being that it's remarkably knowable.
Thanks simple, i'd noticed that statement in the TU of the AGM & hadn't concluded it implied CTP was negative, i'd read it to mean it was neutral.
It would be alot easier if PLUS adopted CMC's trading update style and actually included their own forecast for the year rather than us trying to dissect language and us regularly interpretting it differently.
It is useful to have these sort of dicussions/debates rather just ramping, or as 14Cr nicely put it "sitting in an echo chamber"
That makes sense. Don't forget however that the AGM statement draws a distinction between CI and revenue, so saying that CTP (market P&L) is negative, quarter-to-date. Though we may all be happy that this should tend to zero over time, and it's Customer Income that we care about, it was at that point nonetheless some sort of a drag on revenue.
I have $254m CI this quarter and $200m Q4. I have 45% customer churn this quarter, which is at the high end of what I'd expect, when you look at then customers arrived and what ARPUs have been running at since then. I have -$52m for customer trading performance, which I can barely forecast, but at least know was -ve QTD at the AGM.
With $200m revenue, $47m of advertising cost, assuming same AUAC as in Q2, and $46m of other costs, that would be $108m of EBITDA, which compares to $117m Liberum H2 expectation.
It seems pretty likely to me that the company hits FY EBITDA at the end of this quarter. The precise date will depend more on the ebb and flow of CTP.
Almost more important than any of the above is the continued high level of financial newsflow, sparking interest across the globe, and deposits for the World's Trading Machine. New customers who arrive this quarter will be generating high revenues in 2021. A lazy reader/ skier of Liberum or Peel Hunt Research might think this stock is on 10x 2021. It isn't.
I think we are saying the same thing 14cr - but just to clarify. I'd assumed this meant the first 40 days of H2 2020 has twice the revenue of the first 40day of H2 2019.
Fag packet calculation: 2019 Q3 revenue was $111m, so first 40 days was $111m x 40/90 = $99m. It was more aimed at liberums revenue estimate for H2 being very low.
I assumed they meant the run rate was double, I.e. versus the equivalent 40 days in 2019, PLUS had earned >2x the income.
I have $320m and $210m for Q3 and Q4.
What are your models estimating for H2 revenue?
The intermin results released in the RNS on 11/8/20 stated "Customer Income so far in H2 2020 is more than double that of the prior year," which made it nearly $100m for H2 when it was only 40 days into H2
yes, and to anchor it back to the expectations of $193m revenue in H2 set by Liberum. Peel Hunt at $240m.
@sbb - Rob heads up PLUS’ investor relations team and was responsible for drafting the update, so the insight gained from him is a lot more informative than ‘some clerk’ as you suggest.
I think all on here agree the update was a positive, there is some disagreement as to just how positive based on the wording. For what it’s worth, I agree about plus being a net beneficiary from continued volatility into the year end, but it’s always good to continuously assess the risks (including clarifying comparatives as gg did) to avoid sitting in an echo chamber.
For me the trading update RNS was very clear, which was straight from horse's mouth (not from some front desk investor relations clerk). So I have no confusion whatsoever. So I am looking forward to US elections, brexit, milesones etc and will hold into 2021... when we will probably in 2500+ if not more
Can't see that party, what's it say?
Regarding your interpretation in relation to H1 trading. Read my most recent post which comes straight from the horses mouth. Perhaps someone else also email them. It was Rob gurnee who replied to me: rob.gurner@plus500.com
The trading update is extremely encouraging...! And By the way, typically companies issue unscheduled trading updates if there is profit warning or issues as such on the negatives. Or if it is a positive momentum more than expected...! So in case of Plus500 obviously it is superb positive momentum. Also don't confuse if this trading update in relation to last year comparison. It is not , It is in relation to H1. Note the words - ' "Very confident" about its outlook after momentum from first half continued into second half' and it has made excellent progress against all commercial and financial targets. For me this is one of the best shares to own in the current circumstances.. especially given the continued Covid issues, US elections and Brexit etc . I have lots money here (Within my portfolio allocation discipline) and it is better than owning most other FTSE companies or even US tech until end of the year ! I think this time we will breach 2000 with the next couple of months and go well beyond. There will be a fantastic special dividend too...