Shares in Plus 500 (LON:PLUS) advanced on Wednesday after it told investors it is working at ‘full speed’ to re-approve all customer accounts.
The forex focussed CFD firm had to freeze more than half its accounts last week due after it emerged that money laundering checks had been inadequate.
Today, Plus 500 said it will take about a month to work through the backlog.
At the same time changes to the new client ‘on-boarding’ process, to prevent further problems, may also take about one month to implement.
Plus 500 revealed also that revenue, at US$107.9mln, for the year to date now exceeds the total generated for the whole of the preceding year. It did, however, warn that the second quarter of the year is typically quieter and it expects its financial performance will be affected by its recent problems.
The company, which holds its AGM today, also rejected “recent press and blog commentary” and describes there assertions as “misrepresentative and baseless.”
It comes after the group was targeted by short-selling US hedge fund Cable Car and was criticised in the Financial Times Alphaville column.
“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,” the company said in a statement.
On AIM, Plus 500 shares were up 19.5p, 6.8%, trading at 304.5p
Analysts at Liberum Capital, which is also Plus 500’s AIM nominated advisor, repeated a ‘buy’ recommendation and suggested a ‘fair value’ of between 390p and 480p for the share (, though it expects trading to remain volatile.
“Today's statement does not provide any information on the number of accounts which were frozen or the number which have been unfrozen during the remediation plan,” said Liberum analyst Cormac Leech.
“There is also no information on the behaviour of customers after their accounts have been unfrozen (although it is perhaps too soon post the event for this data to be meaningful).
“We believe this information will be key to developing meaningful financial forecasts for the group.”
Numis analyst Jonathan Goslin, meanwhile, highlighted there are “significant uncertainties” such as the proportion of clients can ultimately be verified, how the FCA may react, and the level of reputational damage to the business.
The broker currently has both its recommendation and price target ‘under review’.