UPDATE 1-Online trading platform Plus500 expects 2019 results to be below expectations

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(Adds details on results, background on ESMA regulatory measures)

Feb 12 (Reuters) – Online trading platform Plus500 Ltd said its 2019 revenue and profit would miss market expectations, mainly due to a regulatory crackdown in the European Union on the sale of certain financial products to retail clients.

The shares of the company are expected slump between 10-25 percent after the opening bell on Tuesday, according to traders.

British online trading platforms have been facing an erosion in client base due to a regulatory clamp-down in the EU on the sale of high-leverage complex financial products to retail customers.

Active customers of Plus500 more than halved in the last quarter of 2018 to 101,634, the company said, adding that its revenue has seen a “marked reduction” due to regulatory measures introduced in August by the European Securities and Markets Authority’s (ESMA).

“Following our latest assessment of the ESMA regulatory measures of August 2018, 2019 revenues are now expected to be lower than current market expectations,” Plus500 said.

The warning comes after Plus500 reported a doubling of core profit to $506 million in the year ended Dec. 31 from a year earlier.

The company reported a 65 percent surge in full-year revenue to $720.4 million and topped the average analyst estimate of $698.6 million, according to IBES data from Refinitiv.

Reporting by Muvija M and Noor Zainab Hussain in Bengaluru;
Editing by Arun Koyyur

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