Share Buyback Program Started by Plus500
The First Half of 2019 Interim Results for Plus500 was released this week. The results noted that the firm is starting a new stock buyback program that’ll help traders in the harsh market conditions their facing. Nearly $50 Million of Plus500’s cash reserves are being used towards the new program. This announcement has allowed for their stock to jump by 20% by Tuesday, August 13th.
This announcement comes during horrendous market conditions that have seen European finance firms drop significantly in revenue. Plus500 saw its incomes drop by 68% in the last twelve month, meaning the firm earned only $148 Million. This amount is considerably lower than the second half of 2018, with a 42% drop in revenue.
Plus500’s Net Profits in the last twelve months have dropped by 80%, and by 56% in comparison to the second half of 2018. However, even in this challenging market, the firm’s still earning a profit. Their cash reserves have increased by 4%, making them $511.9 Million in reserve funds. This is considerably higher than the $327.3 Million they held at this time last year. While the declines might be apparent, there have been small factors that allow for Plus500 to remain a dominant force in the space.
Plus500 Client Activity
The second half of this year saw the overall performance metrics for Plus500 improve after a horrendous first quarter in 2019. Plus500 noted in their interim results that the second quarter for the last two years had been the best period for trading. This has been the case since the European Securities and Markets Authority introduced its product intervention measures the previous year.
This doesn’t mean that in the first, third & fourth quarters of the year that trading isn’t present on Plus500. During the first quart of 2019, the exchange saw an increase of 23% for new clients. Subsequently, this allowed for the active client percentage to rise by eleven. In the first half of 2019, Plus500 has seen 47+ thousand new clients sign up with their services. Unfortunately, the number of active clients in the first half of this year was substantially lower. There have only been 141,692 thousand active traders for Plus500.
Popularity outside EU Increasing
Surprisingly, in the first half of this year, 48% of the revenue earned by Plus500 came from countries outside of the European Union. This allowed for an 8% increase in revenue when compared in the second quarter of 2018. The total income from swaps & spreads was $175 Million. The deposits made from outside the European Union rose by 41% in the second half of 2019, and the interim results showed a slight decrease in chum percentages for clients. However, these are the lowest figures for Plus500 since their IPO in 2013.
AsafElimelech, the CEO of Plus500, spoke about the company’s performance so far in 219. He stated: “Our first-half performance, and trading to date in the third quarter of 2019, is consistent with current expectations for 2019. Underlying operational performance and new customer acquisition metrics remain robust.