Plus500 shares fall after ‘subdued markets’ hammer firm

Shares in Plus500 crumbled on Friday after the broker posted a slump in first-quarter revenue on “subdued” financial markets.

The FTSE 250 firm saw sales in the three months to March 31 tumble 82% to 53.9 million US dollars (£41.3 million), or 65% quarter on quarter.

“Given the level of global political and economic news, financial markets were surprisingly subdued in the period, which reduced the number of trading opportunities for customers.

“While revenue in the quarter was disappointing, we have much to be encouraged about,” said chief executive Asaf Elimelech.

Shares crashed nearly 30% to 513p, and also dragged down spread betting sector peers CMC Markets and IG Group.

Plus500 saw average revenue per user fall 60% year on year to 550 US dollars from 1,363 US dollars, and 64% compared with the previous quarter.

The company said financial markets in the period “provided limited” trading opportunities, adding: “It is impossible to predict market conditions for the rest of the year and therefore too early to draw conclusions about the full-year outcome based on the group’s performance over the first three months.”

In February, Plus500 saw shares drop by nearly a third after it warned over full-year profits, blaming a regulatory clampdown across Europe.

The company said 2019 profits are likely to be “materially” lower than expected due to a sales hit from new EU regulations combined with plans to maintain marketing spend.

On Friday the contracts-for-difference trader said active customers decreased 3.7% to 97,921 quarter on quarter.