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(Alliance News) - Plus500 Ltd on Monday said 2021 results will beat market expectations, suggesting good news is likely from peers CMC Markets PLC and IG Group Holdings PLC as well.
The three London listings all provide a platform for customers to trade contracts-for-difference, which are leveraged bets on currencies, commodities, stock indices and individual shares.
Haifa, Israel-based Plus500 on Monday hailed an "outstanding" operational and financial performance throughout 2021, saying it is considering a new share buyback programme, following the completion of the USD12.6 million buyback announced back in October.
For 2021, Plus500 said revenue is estimated around USD718 million, supported by customer income - a key underlying growth metric - of USD702 million. The revenue figure is 18% below the USD872.5 million posted in 2020, but 9.6% higher than the company-compiled consensus analyst forecast of USD655.2 million.
Earnings before interest, tax, depreciation and amortisation are expected to be around USD387 million for the year, down 25% from USD515.9 million the year before.
In addition, Plus500 said its base of active customers during 2021 remained well ahead of pre-pandemic levels, at 406,000, with the number of new customers on-boarded reaching 196,150. The development of the customer base was driven by continued investment in marketing technology, the company explained.
"This represents a clear validation of the board's confidence in the group's business model and future prospects. In addition, it highlights on-going evidence of the board's diversified approach regarding capital returns to shareholders, which also incorporates dividend payments," Plus500 asserted.
In a research note on Monday, Jefferies said the Plus500 update provides a supportive read-across for similar updates from CMC and IG, scheduled for January 20 and 27, respectively. Particularly important was Plus500's report of GBP166 million in customer income in the fourth quarter, which is up 5.7% from GBP156.9 million in the third quarter.
The US investment bank said consensus assumes for CMC that average quarterly revenue in the second half of financial 2022 - October to March - will be up 7% from the first half.
For IG, consensus assumes revenue in the financial second quarter - September to November - will be down 7% on the financial first quarter, Jefferies noted.
Plus500 was up 3.0% late Monday afternoon. CMC was up 1.8%, while IG was trading 0.4% higher.
Plus500 will publish annual results on February 15.
By Will Paige; willpaige@alliancenews.com; and Tom Waite; thomaslwaite@alliancenews.com
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