About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
The Right Technology in the Right Market at the Right time; We believe Plus500 has the correct combination of a very strong online trading platform, most efficient online marketing tools, and automated low risk trade execution approach. This, while leveraging its abilities increasing market share in very excited sector of the CFDs [Contracts for Difference]. Strong outlook. In our view, within the next two years the company will increase its market share to about 10% of the UK CFDs market and by 2016, company revenues will increase to about $200m, generating about $85m net income [EPS of 79 GBp] No growth without risk. We see two key risks to our model. The first is unexpected new guidelines for the CFD products in the EU countries or/and in non EU Countries. The second is that the global financial markets appetite for CFDs will change.
$m 2011 2012 YoY % 2013 YoY % 2014e YoY %
Total Revenue 50.0 56.1 12% 115.0 105% 155.3 35%
Operating income 23.7 23.1 -3% 67.1 190% 86.9 30%
% Op. Income 47% 41% -13% 58% 42% 56% -4%
Net income 17.1 17.1 0% 50.6 196% 65.6 30%
EPS $ - 0.12 na 0.47 290% 0.61 30%
2013
Market Cap £m Market Cap $m Price Change PE 2013 PE 2014e Revunues YoY Growth % EBIT Net Profit % Net profit
Plus 500 381 621 160% 12.3 9.5 115 105% 58% 51 44%
IG Group 2,350 3,854 38% 16.5 14.9 621 6% 46% 143 23%
FXCM 488 717 62% 21.7 17.4 485 16% 15% 22 4%
2013
Symbol [AIM] PLUS
Market Price [ GBp ] 397
Market Cap £m 381
Market Cap $m 621
2013 P/E 12.3
2014 P/E [Est.] 9.5
Price Change 160%
Fair Market Cap £m 628
Fair Market Cap $m 982
% UPSIDE 58%
PLUS500 AS OF/19/2/2014
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
Financial Highlights
Revenues: Sales grew by 105% YoY in 2013 to $115m.. We
estimate that in 2014 sales will increase to $155m
EBIT: In 2012, EBIT was about $23m and the EBIT margin
was about 41%. According , In 2013 ,the EBIT rose by 190%
to about $67m , and the EBIT margin is about 58%, We
believe the company will be able to maintain a EBIT margin of
48% in the foreseeable future, in 2014 we expect EBIT will
be about $87m.
Net income: The net income in 2013 grew up to $50m , [and
EPS is reach the 47p], we estimate a $65m as net income in
2014, EPS of 61p.
Free Cash Flow : The free cash flow in 2013 was about
$57m comparing to about $20m in 2012, and we project a
$64m in 2014.
Note : Source Plus500, Forcasast SOLOMON CAPITAL
-
50.0
100.0
150.0
200.0
250.0
2011 2012 2013 2014e 2015e 2016e
Revenues trends [$m]
$0.47
$0.61 $0.70
$0.79
2011 2012 2013 2014e
EPS ,$
23 20
57 64
74 83
2011 2012 2013 2014e 2015e 2016e
Free Cashflow [$m]
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
Main KAI’s
2011 2012 2013 2014e
Revenues $m 50 56 115 155
Advertising cost $m 20 23 35 45
New Customer 33 37 57 69
Active Customer 45 58 86 118
ARPU $ 1,101 962 1,320 1,320
AUAC $ 604 628 632 650
Note : Source Plus500, Forcasast SOLOMON CAPITAL
33 37 57
69
45 58
86
118
-
50
100
150
2011 2012 2013 2014e
New Customer Active Customer
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
CFD Market
Based on IG Group and Investment Trends, 23, Decmber 2013 data, we estimate the total UK CDF’s Market in 2013 was $200-
220m [excluding Spread betting] and about $250-280m including Spread betting. In 2013 plus500 reached about a 5% share of the
UK market.
32% 11% 8% 6% 1%
34%
7% 6% 5% 5%
IG CMC SAXO CAPITAL CITY INDEX PLUS500
UK CFD Market TOP 5 Providers
2012 2013
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
Peer Group Analysis
IG Group Holdings plc [IGG] is a UK based company which provides retail traders with access to the financial markets. Company provides contracts for
difference (CFDs) and spread betting on over 10,000 financial markets, including forex, indices, shares, and commodities. IG has a ABOUT 34% share of
the UK CFD market [Source: Investment Trends, 23, Decmber 2013].
FXCM Inc. (FXCM), is an online provider of foreign exchange (FX) trading and related services to approximately 170,000 active retail
customers globally. The Company offers its customers access to over-the-counter (OTC) FX markets through its technology platform.
2013
Market Cap £m Market Cap $m Price Change PE 2013 PE 2014e Revunues YoY Growth % EBIT Net Profit % Net profit
Plus 500 381 621 160% 12.3 9.5 115 105% 58% 51 44%
IG Group 2,350 3,854 38% 16.5 14.9 621 6% 46% 143 23%
FXCM 488 717 62% 21.7 17.4 485 16% 15% 22 4%
2013
Note : IG, Year end 31 May, FXCM Year end 31 Dec. 2013e- Avg. Estimations
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
The Valuation
Our DCF model is based on a WACC of 11%, standard in the sector. Our TGR is 3%, which we view as reasonable given the current
growth rate.
Asumptions Notes
Risk-free rate (Rf) 3.0% L. T risk-free rate l bonds .
Market premium (Mp) 6.0% Equity Market Risk Premium London
Beta 1.40 Industry Beta Small- firm risk premium 0.0%
Company-specific risk premium 6.0% Based on our assumption, regulation risk and more
Cost of equity (Re) 13.2%
Pretax cost of debt 5.0% Based on the Company L.T Cost of debt
Effective tax rate 25.0% Represents the average long-term effective tax rate
Cost of debt 3.8%
% ofLT equity to total Asset 75.0% Base on the company projections and Peer group analysys
WACC 10.8%
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
Stable growth 3.0% Cost of Capital 10.8%
Stable growth
982 2.5% 3.0% 3.5% 4.0% 4.5%
DCF 179 9.0% 1,133 1,210 1,301 1,410 1,543
Discount Terminal Value 724 9.5% 1,069 1,136 1,213 1,304 1,414
Total Discount Cash Flow 902 10.0% 1,014 1,072 1,138 1,216 1,308
Net Financial Liability 10.5% 965 1,016 1,074 1,141 1,219
Surplus Assets 80 11.0% 922 967 1,018 1,076 1,143
Equity Value 982 11.5% 884 924 969 1,020 1,078
Current Market Cap [£m] 381 Fair Market Value [£m] 603
Current Market Cap [$m] 621 Fair Market Value [$m] 982
Current Share price [p] 397 Fair Market Price [p] 628
Co
st
of
Cap
ital
PLUS-500 DCF VALUATION [$,Millions]
Equity Value
23 20
57 64
74
83
2010 2011 2012 2013 2014e 2015e
Free Cash Flow$ millions
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
2011 2012 2013 2014e 2015e 2016e
16% 35% 18% 12%
50.0 56.1 115.0 155.3 183.2 205.2
Total Revenue 50.0 56.1 115.0 155.3 183.2 205.2 R&D 18.5 - - - - -
M&S 24.2 28.9 44.3 62.1 75.1 84.1
G&A 2.1 4.1 3.6 6.2 7.3 8.2
Operating income 23.7 23.1 67.1 86.9 100.8 112.8
Other income (expense) -0.7 - - - - -
Income before taxes 23.0 23.1 67.1 86.9 100.8 112.8
Provision for income taxes 5.9 6.0 16.5 21.4 24.8 27.7
Net income 17.1 17.1 50.6 65.6 76.0 85.1
25%
Weighted average shares [M] 108 108 108 108
Earnings per share 0.12$ 0.47$ 0.61$ 0.70$ 0.79$
Operating income 23.7 23.1 67.1 86.9 100.8 112.8
Tax Payed -4.7 -3.4 -10.0 -21.4 -24.8 -27.7
Adjustments 4.0 0.1 -0.1 -1.0 -1.0 -1.0
Cash Flow from Op. 23.0 19.8 57.0 64.6 75.0 84.1
PLUS500 LTD [$,Millions]
About Solomon Capital: SOLOMON CAPITAL [A part of DS SOLOMON HOLDINGS Ltd.] is a leading Cross Border Investment bank, providing
investment banking as well as corporate finance services that include; Fundraising, M&A, Financial Restructuring and Business Strategic
Consulting to Israeli, and International companies.. Solomon Capital is an IPO Adviser for Non-UK companies looking for going public on the AIM.
Contact; DS SOLOMON HOLDINGS LTD, www.solomon-capital.com David Solomon, 972-508-695450 [email protected]
SOLOMONCAPITAL PLUS 500 19.2.2014
SAMPLE ONLY
Disclaimer The analysis presented in this report is designed to provide information only, and is in no way to be deemed the expression of an opinion, offer, recommendation or advice regarding the purchase and/or holding of and/or sale of the securities and/or financial assets described herein. The research was conducted on the basis of publicly available information, which DS SOLOMON HOLDINGS Ltd. presume to be reliable, though no independent check was conducted to verify the reliability, accuracy, or completeness of the information. Moreover, the information contained in this report makes no pretense of providing all information a potential investor would require; nor does it claim to provide a full analysis of all the facts and details appearing in the report. The information, details, and analysis herein, including the opinions expressed, are subject to changes without additional clarifications being issued to that effect. This report is solely the product of its preparer’s individual analysis, reflecting his understanding of the companies under review herein as of the date of publication. This report is not to be deemed, in any fashion, an alternative to investment advice that takes into consideration the special needs of a given individual. DS SOLOMON HOLDINGS Ltd., as well as its shareholders, employees, and those working under its auspices, are in no way responsible for any damage or loss that might be incurred from the use of this report, if such damage or loss were to occur. Nor can they provide a guarantee or be responsible for the reliability, accuracy, or completeness of the information set forth in this report. This report is the exclusive property of DS SOLOMON HOLDINGS Ltd. It is not to be conveyed to a third party, or copied, duplicated, quoted, published or made public in any way, printed, photocopied, recorded or copied, in whole or in part, without obtaining express written consent in advance.
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