Plus500 shares surge as fintech platform reveals £73m payout in dividends and buyback scheme following strong performance
- The London-listed firm also announced $60m in dividend payouts for investors
- There was a 20% increase in customers who made at least one real money trade
- Plus500 is developing a new research and development facility in Tel Aviv, Israel
Shares in fintech platform Plus500 were the top riser on the FTSE 250 today after the firm revealed another stock buyback programme on top of very positive trading results.
They were up by 5.4 per cent to 15.06 this afternoon as the Israeli-based group said first-half underlying profits soared by over a fifth to $154.1million from the previous six months while revenues rose 12 per cent to $308.3million.
The London-listed business said it had continued to benefit from the volatility caused by the Covid-19 pandemic as well as the considerable investment it has made into its technology platform.
Payback: Plus500 announced a further $12.6million share purchase scheme today alongside interim dividend payouts for investors totalling $60million
It attracted almost 137,000 first-time depositing customers compared to less than 100,000 in the second half of 2020 and a 20 per cent increase in customers who made at least one real money trade.
But measured against the same period last year, the number of new traders was about 60,000 lower whilst the level of active customers was only 2 per cent larger.
Trading income was also 39 per cent lower and pre-tax profits plunged by nearly half to $165.1million, although its cash balance jumped by 23 per cent to $722.5million.
Nonetheless, it announced a further $12.6million share purchase scheme today alongside interim dividend payouts for investors totalling $60million, having already completed two buyback programmes worth $42.5million during the period.
‘The unique market environment, which emerged during early 2020, and the sustained levels of volatility that it produced across global markets, has driven an unparalleled number of opportunities for customers to trade,’ the firm stated.
‘This highly attractive market environment has continued into 2021 and is a significant potential driver of growth and value for the group, for its customers and for its prospective customers, including the new and emerging generation of traders with a technology-focused attitude to trading and investment.’
New members: Plus500 attracted almost 137,000 first-time depositing customers in the first half of the year against less than 100,000 in the second half of 2020
To further boost its business, Plus500 is developing a new research and development facility in Tel Aviv as part of an investment of approximately $50million over the next three years to scale its technology platform.
It has already hired several highly skilled workers involved in engineering, programming, web design and product management to work at the centre, which will create new products, services and other innovations.
The firm specialises in trading contracts for difference (CFD), a form of legal agreement involving a person agreeing to pay the difference between the value of an asset when the contract is made and its value when it concludes.
But it has also expanded into the futures and options market following its acquisition of technology trading platform CTS and Chicago-based Cunningham and recently launched Plus500 Invest, a share dealing platform, in Europe.
The group said its plans to roll out the platform across more European countries during the latter half of the year.
Thanks to these results, the group said it was ‘increasingly confident’ about its outlook and is forecasting annual revenues to be ‘significantly ahead’ of analysts’ forecasts.
Russ Mould, an investment analyst at AJ Bell, said the company’s guidance has ‘helped dispel fears that its lockdown-related success is due to come to a juddering halt.
He added: ‘Profit for the half year fell, which was expected given the comparison with a period in the early stages of the pandemic which, thanks to significant market volatility, created lots of opportunities for traders.’
He warned though that investors would no longer give the firm the ‘benefit of the doubt…if momentum stalls and the threat of increased regulation remains a pretty constant cloud on the horizon as the authorities look to ensure people are protected from racking up substantial losses.’