Plus500 share price gains as company defends "sustainable business model"

Joe Hall
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Plus 500 is a sponsor of La Liga team Atletico Madrid (Source: Getty)

Plus500's share price has risen by more than seven per cent in morning trading after the firm insisted it had a "sustainable business model" in a statement to the stock exchange.

The Israeli-based spreadbetter is holding its annual general meeting today where it is expected to give further details about how recent freezes on some its clients accounts have affected revenues.

In a trading update the Aim-listed company reveals year to date revenues of $107.9m (£70.3m) - larger than the whole of the first half of 2014. First quarter revenue of $82.1m represented a 35 per cent rise to the same period a year earlier.

UK accounts were temporarily suspended last week after a Financial Conduct Authority investigation into its anti-money laundering checks on new customers forced it into asking for more documentation from its users.

More than £300m was wiped off the company's value in one day as its share price plummeted. A number of analysts and commentators questioned its business model - but the company has offered a rebuttal to doubters this morning.

Read more: Plus500 bounces higher ahead of crunch meeting

In the statement, Plus500 commented:

The Board is aware of recent press and blog commentary regarding plus500's accounting policies and business model and rejects the assertions made as misrepresentative and baseless. The Board reiterates that the company's accounts, along with those of its subsidiary, Plus500UK Limited, have received unqualified audit opinions from PwC and the directors are comfortable with the disclosures made therein.

Chairman Alastair Gordon added: "We assure customers and shareholders that Plus500 has a sustainable business model and is managed and governed by a board which is committed to transparency and robust compliance."

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