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They've been a bit vague about the US business (no actual numbers just pleasantries about the positive outlook). They're going to buy another 5,500,000 (ish, at £18.50) shares so that takes us down to circa 74,000,000 million shares in circulation and the dividend/renewed buyback is good..................however, I'll be surprised if we hit £20 sadly. I'm a bit concerned that the operational highlights aren't really highlights. They've lost 50,000 active users......................but perhaps they weren't high end users and there's bound to be some losses/people trying other things - I'm just a bit concerned that there's a drop across the board (apart from the average investment going up from the active traders (which is a good thing - means they're committed? Or wealthier than the average trader that joins?) Either way - very interested to see where this ends up over the next 2 weeks (back to £18.50 no doubt) with an immediate bounce perhaps, then a settle back to it's natural habitat of below £20...........maybe! I'm in the for long term - just feel it would be great to get above £20 and press on from there imo. It's the big barrier for me. We've got close in the past........maybe we'll breach it this time.
perational highlights
H2 2023
H2 2022
Change %
FY 2023
FY 2022
Change %
New Customers[2]
40,495
49,274
(18%)
90,944
106,549
(15%)
Active Customers[3]
158,846
177,946
(11%)
233,037
280,769
(17%)
AUAC[4]
$1,487
$1,527
(3%)
$1,489
$1,481
1%
ARPU[5]
$2,252
$1,805
25%
$3,116
$2,966
5%
Excellent and with a p/e of only 7 plus half the mcap as a cash balance this will surely rise today - possibly £20 is on the cards.
The number of shares bought by the company on a daily basis seems to have reduced lately. Perhaps from Tuesday there could be a new impetus and hence an upward pressure on SP. There will probably be a 50/50 split again in terms of shareholder returns in divi/buybacks. I am favouring buybacks these days.
Good question, and one I can’t answer I’m afraid, but $900 million would seem excessive....
Given the nature of the business, how much cash do they need to hold?
.... due on Tuesday. January’s trading update provided much of the headline items, but I’m looking for some more detail on the US futures business, and an indication of their intentions regarding the cash pile. Probably a continuation of buybacks and an increased dividend, but I wouldn’t rule out a special divi. What do others think?
I don't disagree Lemonade, they have to continuously attract new users, but to date they have done that. What are your figures on the LTV/CAC ratio?
It's not a growing business in the UK, but in new markets they are definitely growing, are they not?
About "fleecing users" with "huge spreads" - I have been told their spreads are tighter than the competition, do you disagree? I consider their platform structurally competitive in this regard, but tell me if I'm wrong?
Fair enough Tank; looking back perhaps I've made more of some of the little things I've found unnecessarily obtuse in the past. People definitely lost money on the profits warning imo........but again, I'm not in the City, don't know anyone, so can't categorically say; I didn't do very well, but in hindsight, at that particular point in time, it just felt like you couldn't trust anything Plus were putting out in my humble opinion. I then prevaricated for quite some time about re-investing and missed the inflexion point again. But anyway it's all water under the bridge now. I'm just sitting on my investment and interested to see where this goes...........and whether the american business will be the catalyst for breaching the £20 magic line.
On point 1. Their LTV/CAC ratio is definitely not been improving, in fact it's pretty terrible. They have to consistently acquire new customers to replace the ones they lose.
What this means is that their growth is capped at around this level.
However they are still grossly undervalued, the company just generates too much free cash flow and has a ton of non-customer safety cash on it's books.
They don't need to grow revenue to return huge returns to shareholders, they just need to keep fleecing their users with huge spreads and acquiring new ones and returning it to shareholders via buybacks/dividends.
Sounds like a sob story, Savaloy, because you lost some money, for a short period of time. I don't agree with your assertions about PLUS burning anyone. The simple truth is, this was/still is a relatively new business model so regulation was running to catch up with it + assess what should be a fair level of oversight and restriction, and the firms themselves were developing with regard to their disclosures and risk management protocols. Nobody burnt anyone.
I don't care much what this board thinks I care more about what the institutional market thinks because they are driving the volumes and price level. The institutions have always had concerns about the longevity of the business model given relatively short life horizon of customers as well as big swings in customer P&L, not to mention fear that regulations could be further tightened.
That's fair to some extent, but none of them are talking about being burnt or abused by the company.
My view, for what it's worth, is this company is misunderstood by the institutions for a few reasons, but that will change and further drive re-rating:
1. Customer retention and duration of ARPU has been improving over the years, not declining: in 2018 and 2019, customers over 1 year old contributed 73% of revenues, today that has risen to 85%. Contribution from five year old or more customers has risen from 8% to 32%. The institutions haven't yet appreciated the stickiness of this particular business - yes active customers trade less over time, but they still trade. PLUS has the best technology, which differentiates them in terms of retention and trading activity. PLUS also has consistently drawn in more new customers. Those things are the hidden secrets, which the market will appreciate eventually. Conclusion: the business and its cash generation has longevity.
2. The busines is no longer UK centric, thus has regulatory diversification. Although anyway the regulator is not against people trading, especially experienced traders. Regulation is not an existential risk.
3. Their breakthrough in the US futures market is really exciting and gives them a further growth boost with significant runway and further diversifies their revenue stream, geographically, regulatory wise, and customer-type wise.
This is a developing investment story and will, ultimately, be appreciated by the institutional market. If you don't think it's a good story with good management, you should divest.
If you like my assessment, consider looking into SEPL and JET2, two other misunderstood, low-medium risk, highly cash generative businesses.
Plus still seems very cheap even after a great rally and Robin Hood price soaring in the US on the back of stronger results.
sorry tos1963 - didn't see your reply. up to the profit warning that mrbb alludes to below (and he's spot on by the way) they'd also been had a tendency to shift around on the kpi's they mentioned or omit kpi's or performance parameters that they'd mentioned previously in the rns's so that things were difficult to reconcile year to year, etc etc. you had to really dig down and extrapolate out your assumptions, because the communiques weren't clear imo. it wasn't just me thinking this - there were reams and reams of discussion on this board about it (and advfn). things are alot better now of course. in and of themselves it was frustrating, but then they pulled that profit warning thing and combined with the past communiques it had built up so that there was a massive loss of trust. i'm a minute shareholder, and i was ****ed off. i think alot of much more-invested-shareholders were seriously unhappy. combine that too with the opaque israeli domicility and the old tax withholding thing (now sorted for the most part but back in the day it just created extra inertia imo) and..........that's why i wrote what i wrote below. things have improved..........but i'm just waiting for another surprise rns .......because a leopard doesn't change their spots. why am i still invested you might ask when i am so jaded of the company? well, that's a good question..............i think, eventually, they'll move to the nasdaq and the share price will re-rate and then really motor so..........i'm holding on.
I first bought a few days after the IPO for around 130p & had I gone all in then my portfolio would have outperformed most other portfolios.The total of dividends paid since then has been multiples of the IPO price & we have bought back around 33% of our issued sharesA few years ago the Board issued an unexpected profits warning following a series of positive trading updates & The Market ( & I ) were very disappointed & I then sold out with a very decent profit-& bought back a few months later but I am not aware of any other disappointments since then.
Finals on 20/2 should confirm a decent FY 23 & I am hoping that the Outlook may put some numbers ( for the first time ) on our US expansion which will hopefully be continuing to gather pace & ,surely, at some point, we will be on Nadsdaq
Oi oi.... as SeaTank has asked, and in the interest of all contributors to this thread, and shareholders, could you please elaborate on your second paragraph? It’s unhelpful in the extreme to throw out serious accusations and concerns like that without providing any details to back them up. Personally, I’m delighted with my investment here. If there’s anything you think I should know, please share. Otherwise I’ll just be inclined to view your post as pointless scaremongering, with no evidence to support it. Cheers.
Who's been burnt and how?
In my view the UK institutional market doesn't believe their business model has longevity, but it is their loss, especially as the business diversifies geographically and leverages its technology in the futures market in the US.
Not sure how many other companies in these people's portfolio have returned circa $1 billion dollars in dividends and buy backs. If they have others then they must be very good investors!!!
Not sure how many other companies in their portfolio's have had a total return ( inc of div) of
26.8% since 2020
12% since 2019,
21% pa since 2018 ,
35% since 2017
I think the only regret anyone can have is that they haven't bought more shares.. they are beholden to the industry they are in hence lots of regulatory risk and can be volatility in the results given the markets and products they offer. Otherwise one must compliment them on their execution.
I've been a shareholder here, through thick and thin, since the first time it hit £5 I think and I've been all the way up to £20.....and all the way back down and up again to where we are now.
There are just too many issues for this share to ever go main stream; it'll never be accepted.......unless............unless they decide to go to the NASDAQ imo. They can't hide there/obfuscate there. Too many people have been burnt by them and memories are long. Trust is easily lost, and is never completely won back imo.
I agree, if I want a bit of entertainment I just read through the LLOY board and that share hasn't gone anywhere except down since the financial crisis of 2008/9 !
Regarding PLUS a lot of the IPO investors have probably moved on long ago. I first bought in 2017 in the £4 range but sold most of those at £12.50 and lower after it's huge fall. Been back in since the £7-8 days which was not that long ago really. Severe ups and downs with this share but most agree we are not trading at fair value considering the cash balance and profitability. I guess we just have to accept it or move on. Much has already been said really.
Sea tank... I find the quieter the board, the more successful the share on here! It’s probably not too bad an investment strategy to seek out the boards on here with less noise, and make a portfolio of them!
For a share that has made Investors so much money since IPO, this chat board is surprisingly quiet
Sounds like the US futures business is starting to make headway
As our US presence grows I am sure that a Nasdaq listing will be considered & our Board have enough shares to want to see our SP re rated substantially .
Why not Plus - goes back a long way but the city don't trust this israeli set up.
No idea.
I am of the opinion they should delist from AIM exchange and list on NASDAQ, they would get an instant share price premium.
Their EV is £660m, EBITDA of £330 lol.
In what world is this a fair EV value... only on UK exchanges.
CMC also reporting today, up 22%.
Why not PLUS?
Still at an absurdly low PE ratio.