Plus500 reports “robust” end to 2019 as volatility boosted customer trading

Online stock trading platform Plus500 Ltd (LON:PLUS) saw its share shares move higher in early deals after its preliminary results revealed a material rise in second half revenue.

Telling the tale of the financial year, Plus500 described the second half performance as “robust” versus a first half that was encumbered by extremely low volatility in quarter one.

The stronger second half was down to an increase in trading opportunities, resulting from more volatile markets.

Second half revenue amounted to US$206.5mln, up about 40% on the preceding six month period, while at US$126.7mln earnings jumped 93% versus the first half of 2019. Similarly, net profit increased 94% to US$100.1mln.

It was the first-year trading under new regulations introduced by European regulators, and, the company said its business has responded.

“We finished 2019 in good financial and operational shape following a period of changes for the industry, which has provided a more certain regulatory outlook for Plus500 and the industry as a whole,” said Asaf Elimelech, Plus500 chief executive.

“We were particularly pleased with the strong improvement in financial performance in the second half of 2019 and believe that customer trading patterns have now adjusted following the regulatory changes introduced in Europe last year.

“We continue to monitor and prepare for any potential product intervention measures that are expected to take place in Australia during 2020.”

Customer trading activity

Plus500 noted that it executed an average of around 3mln customer trades per month during the year, and, at US$5,116 the average deposit per active customer increased by 19%.

The company described “positive momentum” continuing into 2020 with market volatility and ‘global events’ again supporting trading activity on its platform.

Elimelech added: “Looking forward to 2020 we are confident of the prospects for the group as we focus on further strengthening our customer offering and market positions, thereby delivering growth and further strong shareholder returns.”

Shareholder returns

Plus500 proposes to distribute 100% of net profit for 2019 to shareholders, with interim dividends and final dividends totalling US$71.1mln, and, separately via a share buy-back it intends to repurchase US$80mln of equity in 2020.

Having paid out US$30.9mln earlier in the year, the final dividend will amount to US$40.8mln which will be 37.67 cents per share.