Markets report: Plus500’s growth dip spreads gloom

Louis Ashworth
·2-min read

Spread-better Plus500 led fallers on the FTSE 250 on Tuesday after saying its stellar growth record lost pace in the third quarter.

It stuck to existing guidance for the full year after reporting “significant year-on-year growth” in revenues amid high market volatility.

The group – which sells contracts for difference – said its underlying profit (Ebitda) for the three months to the end of September was 91pc higher than in 2019, at $134.2m (£103m), while revenues jumped 96pc.

It said “unprecedented market conditions” had drawn people in, with 46,000 new customers joining over the quarter.

The FTSE 250 company’s board said it was “very confident” in its outlook, saying it may look to expand its geographical presence through “potential targeted acquisitions”.

Analysts were more sceptical. Jefferies’ Martin Price said Plus500’s outlook indicated a “material slowdown” during the fourth quarter, which he said look “highly conservative”.

Plus500’s shares dropped 100.9p to £15.20, leaving it as the biggest faller on the FTSE 350 on another poor day for European shares.

Stock indices across the Continent extended Monday’s losses as a full-blown second wave of Covid-19 continued to spread across the Continent. Where Monday’s losses were dominated by travel groups, yesterday saw more for financial companies, property developers, housebuilders and industrials.

HSBC was the biggest riser on the FTSE 100, closing up 10.8p at 330p after it beat expectations with its third-quarter results, and made murmurings about the potential return of its dividend.

Fellow heavyweight reporter BP – which also beat expectations with a return to profit – fared more poorly, dropping 4.3p to 195.7p.

Premier Inn owner Whitbread also fell, closing down 44p at £22 after sinking to a steep loss in the first half of its financial year. Among small-caps, oil services group Hunting fell 4.7p to 136p after cautioning its revenue run rate for the fourth quarter may be slightly lower due to “the usual seasonal slowdown”.

THG Holdings, parent of recently-listed e-commerce company The Hut Group, rose 9p to 703.8p after analysts praised its first update since floating last month.

The group, which upgraded its revenue forecasts on Monday, was dubbed “The Hot Group” by Jefferies’ James Grzinic, who said its Ingenuity e-commerce platform “positions THG as one of the few European equities fully leveraged into a post-Covid world of accelerated channel shift.”

Barclays’ Andrew Ross said the group’s shares don’t “come cheap”, but concurred that Ingenuity is a key strength.