17th Aug 2021 09:29
(Alliance News) - Plus500 Ltd on Tuesday posted a first-half earnings decline, with the contracts-for-difference trading platform unable to match tough comparatives from a year earlier.
Plus500's revenue and profit topped pre-virus levels, however, and the FTSE 250 stock's rose as it also announced plans for another buyback.
Shares in the company were 6.2% higher at 1,518.00 pence each in London on Tuesday morning.
Pretax profit fell to USD188.7 million in the six months that ended June 30 from USD363.2 million a year before. Revenue dropped 39% year-on-year to USD346.2 million from USD564.2 million.
However, earnings were sharply higher than in the first half of 2019, when Plus500 reported pretax profit of USD63.9 million on revenue of USD148.0 million.
Haifa, Israel-based Plus500 said active customers grew by 2% in the first half of 2021 to 333,940, but its new customer additions in the period dropped 31% to 136,980. Average revenue per user was down 40% to USD1,037.
Chief Executive David Zruia said: "Future growth will be delivered through continued organic investments in our business, our technology and targeted bolt-on acquisitions to further expand our CFD offering, launch new trading products, introduce new financial products and deepen engagement with our customers. Having increased our expectations for the outlook for the group, the board is increasingly confident that Plus500 will continue to deliver further growth and consistent levels of cash generation over the medium to long term."
Looking ahead, Plus500 expects revenue for 2021 "to be significantly ahead" of analyst forecasts. Company-compiled consensus forecasts annual revenue of USD476.7 million, which would be down 45% from USD872.5 million. Revenue in 2020 benefited from volatility in financial markets in the wake of the Covid-19 pandemic.
"As a result of the significant positive momentum achieved, supported by the group's further progress in delivering against its new vision to evolve into a global multi-asset fintech group, the board is increasingly confident about the company's performance during the remainder of FY 2021 and beyond," the company added.
Plus500's interim payout was cut by 38% to USD0.5921 per share from USD0.9531 a year earlier. It is up 9.2% from its final 2020 payout of USD0.5422, however.
In addition, Plus500 announced plans for a USD12.6 million buyback. This follows the completion of a USD25.0 million share repurchase programme which it announced in February.
The company noted it completed two buybacks in the first half of 2021, returning USD42.5 million to shareholders.
Commenting on the Plus500 results, Neil Shah at research house Edison Group said: "While these results are nowhere near the record year it saw in 2020, the board remains positive and the company resilient, as predicted revenues remain significantly ahead of current forecasts."
By Eric Cunha; [email protected]
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