Member Info for ggplyr

What do you want them to clarify?

Average cash on the balance sheet throughout the year is 840m (this is the average of 2022 and 2021 balance sheet cash)
Average cash not held on the balance sheet in segregate accounts is 310m (this is the average of 2022 and 2021 segregated cash)
Making the total average 1,150m throughout the year.

Using gross amounts to try an estimate interest received is incorrect. For example lets say you inherited 100k tomorrow which was paid into your bank that pays 1% interest. if you took that 100k out the day after to pay off your mortgage you wouldn't earn 1% of 100k (your gross amount) for that year.

I've had a closer look at the accounts, the interest earned as per the cash flow statement was 13.5m in 2022. this is approx 1.2% of the average cash balances of $1,150m.* . This is when the fed rate averaged 1.9% throughout 2022. its currently at 4.75%-5%. if it stays at that level in 2023 that's 2.5 times the rate in 2022. All being equal the impact is interest earned rises from 13.5 to 33m.
Nothing to be sniffed at, but not a game changer either.

(note: i made an incorrect assumption earlier when i used the P&L Financial Income figure)

wish this forum would let you edit.
should read:
.... in 2023 it will be more while the Fed...

They are not holding $3.3b of cash.
$2.3bn of customer deposits is only one part of the equation. (that cash is then used and becomes cash on the balance sheet or gets withdrawn)

The relevant section is in note 16 of the accounts, "segregated client funds"- 2022 = $272m, this has actually decreased from £350m

The interest they earned in 2022 is 41m* (from the "finance income" in the P&L), so that is approx 3% of the total cash they are holding in 2022 (inc the segregated funds). in 2022 it will be more while the Fed rate is high. (i assume given that the bulk of their cash is USD its the fed rate that correlates with the interest they earn rather than the Bank of england rate)

*I assume the only finance income here is interest on cash

Nuri, can you calculate the % of operating profit/ net operating income? its pretty much the same.

That said, half the costs in operating expenses look fixed to me. So what Nuri is saying has some merit and i would expect operating profit to be higher on this level of income.

The trading update focuses far to much on income/revenue in my opinion rather than profit. I don't think their metrics are properly aligned to shareholder wealth.

Yes, always a worry when companies venture off from what they do best and start of an acquisition spree.
But they haven't decided to take on debt to pay more dividends or do further buy backs so they are pretty conservative in this respect.
They may also just like a 200m buffer. If working capital of 525m is needed as stated. When they are on the wrong side of customer trading performance which we have seen can be over 100m, having an extra buffer means they can ride it out very comfortably.

@tom, while the company looks undervalued in terms of p/e buy backs are good. It's Cheaper too for the investors that reinvest the dividends.
Sure, like all buy backs it increases EPS artificially, but on balance I'd rather the buy backs in this case.

Note they have said cash required for working capital is circa $500m. I believe this is the first time they've mentioned this so no doubt it's for a reason, presumably more acquisitions funded by cash. Time will tell whether this increases shareholder value or whether we'd be better off having the cash returned either by divi or buy back.

Active customer and new sign ups seem to be drying up, i would have thought russia/ukraine would make for volatile markets with lots of people using PLUS, is it due to the cost of living crisis meaning people arent trading as much?

The board can't control people paying wayyy too much for a share.

It looks like the market only reacts when Ed buys shares.

Looks like a coordinated effort to show the market the directors believe the the company is undervalued.

If shares are undervalued buy backs are good for share holders that hold. If they are over value/neutral then dividends are the best way to return un-needed cash to share holders.

Most buy backs aren't good value for share holders, they are used to manipulate earnings per share which is often a bonus metric for the directors. My view is plus is considerably undervalued so I'm fine with the buy backs.

Ah yes, I missed it being ex divi.

Plus falls along along with the rest of the market when events like this happen. But it's exactly events like this that result in above average performance of Plus

I'm going to have beans on toast shortly

Possibly the sp has dropped because of planned acquisitions not being liked and a switch in strategy. The question was asked on investor meet company, they said the Acquistions in the US was primarily to get access to the us market, so hopefully the Acquistions are fairly small in value and strategic

Is the auac slightly misleading? It's the total marketing spend divided by new customers. However, some of that marketing spend retains customers/reminds inactive customers that PLUS still exists. E.g. when plus sponsor a football club it's not just new customers than see the sponsorship, it's existing customers who are reminded plus is still there. So the way they calc auac would also rise with more active customers

Sorry, it's Wednesday not thursday

Thursday it's being held. Google and sign up to "investor meet company". It's free
And no I hold no interest in investor meet company.

No, I mean engaging with share holders shown by an updated web page, and appearing on investor meet Company, if it follows the same format as other companies on investor meet Company they will take questions from the share holders.