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So from that, we are all wrong, and the statement doesn't really tell us anything.
I asked what period it relates to.
The reply "we arent being specific as we're not yet at the end of the quarter.
But more generally its best practice for such comparisons to reference the year on year dynamic."
Thanks all
Ive emailed investor relations to see if they will clear it up what the comparison is to, im still unclear personally. I dont know if they respond to private investors, if they do ill let you know.
It's not unusual to produce a trading update for the AGM, allowing current trading performance to be referenced during the meeting.
The use of 'further growth' of active customers seems pretty clear that it is relative to H1. We may need to wait a month for a better understanding of performance on all metrics. I can't see volatility going away with the second COVID wavelet on its way, Brexit trade deal challenges and US elections, which bodes well for ongoing user acquisition and deposits.
Heavily invested here (after the rises), but feeling quite comfortable and confident in the mid-term prospects.
For me the confusion was on the comparative - Active customers have grown but against 3Q19 or 2Q20 (ie y/y or q/q). The first is not impressive, the second is very impressive.
Fundamentally though, PLUS would not produce a trading update if it didn’t have to. The existence of one means PLUS is either trading ahead of expectations or profit warning and there was nothing in the statement to suggest it was the latter.
Peel Hunt’s coverage of PLUS is remarkably poor, so I pay no attention. Worth noting Autonomous upgraded IG‘s FY21 (May year-end) EPS by +21% today post their results. I struggle to see how that doesn’t result in similar upgrades for PLUS given they are exposed to the same trends, but none has been forthcoming yet.
ggplr - I don't think there's any ambiguity. The active customer number is any customer who traded in the period, hence the number for H1 2020 is not the sum of Q1 and Q2, because some customers traded in both quarters, but count once only in the H1 number. The same principle applies to annual actives.
You are right to consider the language closely. The company says "The operational momentum achieved during H1 2020 has continued into the second half to date, with Plus500 making excellent progress across all key commercial and financial performance metrics."
In my opinion, you could not say this if there had been a deterioration in any single one of the operational metrics since H1. These metrics include new customers, active customers, AUAC, ARPU, Customer Income, trades and deposits, as given below on slide 9 of the H1 results presentation, where it lists metrics, saying:
"Outstanding performance across all metrics:
Heightened volatility in unprecedented market conditions
High quality and consistent performance of Plus500’s leading-edge technology platform
Unprecedented levels of New Customers1 and Active Customers2at attractive ARPU3and AUAC4
AUAC was materially lower at $634 (H1 2019: $1,079)
Record levels of Customer Income5of $556.9 million, up 218%
Over 47 million customer trades (H1 2019: 17.5 million)
Client deposits of $1,653.4million (H1 2019: $467.1 million)"
Active customers are up sequentially from Q2. If churn was at the level of Q2, 23%, then 61k new customers would have to have deposited money. For new customers to be running ahead of this rate is remarkable. Remember that the company brought 91k new customers in all of 2019, but 198k in H1. Customers trading for the first time in Q3 will be generating high revenues into 2021. Look at slides 19 and 21 of the H1 presentation "Long term customer cohort value", and do the maths on the revenues that are generated in 2021 from the c. $200m of marketing spend that will be invested in 2020. The investment will be more than double the $96m of 2019. It was $126m just in H1.
There was a note from Peel Hunt yesterday (corporate relationship with CMC) which suggested that Plus500 new customers in 2021 would be 61k. Plus500 was attracting numbers above that level even back in 2014. That is the level of institutional understanding of this stock, and the great opportunity here.
Trading update from IG tomorrow
I'm not a fan of CMC over PLUS, or at least if you like them both id overweight PLUS. CMC is trading at a P/E twice that of PLUS.
Absolutely Doog58. So much so in fact, that I bought another £2,000 worth on the dip this morning; taking the amount invested here by myself, to just over £21,000. I’m very confident that we will see £20 in the next few months. It really is a money making machine this company. . . .
Plus have delivered a clever update.
Business is obviously very good and likely to remain so.
It's the new normal!
However they are in the process of buying back shares so don't want the SP to rise in the short term.
A nice understated update with no headline figures to over excited
This and CMC are as near as one gets to a banker in the short term
I think it’s very much talking about the quarter. Hence why, reading between the lines, we must assume that business is still boomimg. . . .
I'm curious exactly what "Active customer base" means in this bit of the RNS:
"Revenue, in particular Customer Income, has remained strong in H2 2020 to date, supported by further growth in the Company's Active Customer base."
Does it mean:
Rolling 12 months active customers (if so this isnt that exciting)
Rolling 3 month active customers (very exciting as this implies more active customers than Q2 which 264k which is the highest so far)
In the annual reports it give actives customers for the whole year, whereas in quarterly trading updates it gives active customers for the quarter, so its a little ambigious in this current trading update imo.
Neither did I gg buy
"Elad's bonus resolution withdrawn for now but will be revisited at the remuneration EGM following discussions with major shareholders."
I dont think that bonus is unreasonable. The tax change &rebate results in a $100m boost to PAT. Without some incentive for management to look for extra unordinary profit they won't bother, and the share holders wouldn't have a share of the $100m less the $1.23m bonus.
Thx .
Reaction to the special bonus I think...Plus500 is seeking approval at its annual shareholder meeting today for a special bonus for Elad Even-Chen, its finance chief, to reward him for helping it pay less tax.
The $1.23 million one-off cash payment comes on top of Mr Even-Chen’s pay package, which this year could reach $4.86 million in salary, bonuses and share awards.
The market does not appreciate stunning growth large divis and cash generation- was expecting a rise today.
“All The Best”! Nothing more than that! Lol! (Lots of laughs and nothing more!) :)
ATB ???????????????????
Plus500 are flying with all metics remaining exceptionally strong. Looking really good here for an elevation to £20. ATB