Plus500 eyes US listing after UK listing rules shake-up
London-listed brokerage house Plus500 Ltd (LON:PLUS) is reportedly considering a listing on a U.S. stock exchange following the City watchdog’s plans to shake up the rules companies must follow to list on the London Stock Exchange.
One of the changes proposed by the FCA is to allow companies to ignore best practices on corporate governance and still avoid being listed as “premium.” The FCA also aims to simplify regulations to make the UK more competitive with foreign stock markets and make it easier for candidate companies to enter the market. Additionally, there may be greater tolerance of dual-class shares and an exemption from holding votes on acquisitions. However, some are concerned that these changes could undermine shareholder rights.
According to a recent report by The Times, the FTSE 250 company is eyeing a potential dual listing in New York as Plus500 executives are unhappy with the current valuation, considering that it could be worth considerably more in the US where valuations for similar firms tend to be higher.
The Haifa, Israel-based multi-asset trading platform said earlier this year that it aims to achieve an annualised revenue objective of $500 million over a five-year span. To achieve its self-invented metric for annual revenue, Plus500 set goals of expanding existing products, introduction of new products, deepening customer engagement and expanding into new geographies, including the U.S.
Plus500, which has a market value of £1.42 billion and has been a top performer on the FTSE All-Share Index in terms of shareholder returns since it went public ten years ago. If the decision is confirmed, it will be interesting to see how it navigates the U.S. regulatory environment and competes with other established players in the market.
As outlined in the Q1 2023 filing, Plus500’s revenues between January and March were $208 million, up by almost two thirds from $127 million in the fourth quarter of 2022. However, Q1 revenue was down 23 percent YoY from $271 million a year earlier.
At the bottom line, the spread betting and CFDs broker told investors that it earned $101 million in Q1 2023’s EBITDA, which was also lower by 37 percent from $161 million in Q1 2022. Compared to the previous quarter, the figure shot up by 116 percent when weighed against $46.7 million in the three months thought December 2022.
