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Plus500 prospers beneath regulatory axe

The spread-betting specialist more than doubled its cash profit during the first six months of the year
August 8, 2017

Even tighter regulatory restrictions may be looming on the horizon for the spread-betting industry, but Plus500 (PLUS) is speeding ahead in the interim. The Israel-based group – which allows customers to take long or short positions on a variety of market instruments via contracts for difference – doubled its cash profit during the six months to the end of June to $119m (£91.2m). Management announced a further $27.2m share buyback, in addition to the $10m announced in June.

IC TIP: Hold at 730p

A historically low level of volatility during the first quarter of the year meant new customer numbers were down slightly to 53,881 from 56,929 in last year's first half. However, numbers were up 43 per cent during the second quarter. The average cost of acquiring customers also fell more than a third. Active customer numbers (those who made at least one trade in the period) were 8 per cent higher to a record 112,317, while the average revenue per user was up 10 per cent. Management attributed this to a higher level of repeat business, as well as customers trading higher amounts of money.

Plus500 launched a new website in April, intended to be more user-friendly. Its mobile app has also become increasingly important, with almost three-quarters of revenue taken via mobile or tablet devices. 

Analysts at house broker Liberum expect adjusted pre-tax profit of $192m during the 12 months to December 2017, giving EPS of 126ȼ (from $152m and 102ȼ in 2016).

PLUS500 (PLUS)   
ORD PRICE:730pMARKET VALUE:£832m
TOUCH:729-730p12-MONTH HIGH:747pLOW: 296p
DIVIDEND YIELD:9.3%PE RATIO:7
NET ASSET VALUE:130ȼNET CASH:$221m
Half-year to 30 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (ȼ)Dividend per share (ȼ)
201615958.53923.24
20171881167923.87
% change+18+98+103+3
Ex-div:7 Sep   
Payment:23 Nov   
£1=$1.31