Plus500 kicks off share repurchase, returns $100M to shareholders

abdelaziz Fathi

Plus500 today commences a further share buyback program of $70 million, which was announced earlier this month. It follows a previous $60 million share buyback program announced in November.

Plus500

The Israel-based, UK-listed online trading platform broker released a statement that it will be buying back a maximum of 9,959,828 ordinary shares, or up to 11 percent of the company’s 92 million outstanding shares.

The fintech group outlined that the transaction includes a $42.4 million final buyback program and a $27.6 million special one. The move is part of its previously announced plan that will put $100 million back into shareholders’ pockets after the online trading platform revealed bumper profits for 2022. That includes paying a $30 million dividend to shareholders.

The extra payouts take the year’s buyback programs to $180.2 million and bring total returns to shareholders in 2022 to $270.2million.

Maintaining a balanced approach between funding growth in key channels and returning excess liquidity to shareholders, Plus500 said that it has updated its shareholder returns policy, keeping the current return of at least 50% of the net profit but only via share buybacks. This compares with the previous policy of returning the profit through dividends and share buyback programs, with at least 50% made by way of dividends.

The company said the move demonstrates the substantial opportunities that are available to drive future ‎growth, as well as its high cash generation. ‎Recent estimates suggest that Plus500’s current market capitalisation is £1.97 ‎million. Following this news, its stock rose to 1,796 pence, up 0.73 percent on Tuesday.

The board revealed that it aims to reduce ‎the company’s share capital by means of purchasing its ordinary shares from time ‎to time using existing cash resources. The company added that special share buybacks or other distributions will be considered on a half-year basis.

Plus500 revealed earlier this month that its revenues amounted to $832 million, up 16 percent from $718 million in 2021.

As reported by the fintech company in its financial statements submitted to the London Stock Exchange, total customer deposits in FY 2022 increased to $2.3 billion, up from $2.1 billion in 2021. At the bottom line, the spread betting and CFDs broker told investors that it earned $454 million in 2022, which was also higher by 17 percent from $387 million in 2021.

Notably, the group continued to add fewer active accounts, saying that 106,000 new accounts were added during FY 2022. The figure was down by 46 percent from the 196,336 clients it onboarded the previous year. As a result, the group’s base of active clients was 280,000 during the year just ended, down by nearly a third from 407,000 in 2021.

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