Plus500 today commences a further share buyback program of $60.2 million, which was announced earlier in August. It follows a previous $50 million special buyback program announced in April.
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 10 percent of the company’s current outstanding shares.
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 £1.75 million. Following this news, its stock rose to 1,854 pence, up 2.71 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.
“The purpose of the Share Buyback Programme is to highlight further the Board’s continued confidence in the future prospects of Plus500 and reflects its strong financial position. This confidence is supported by the significant operational and financial momentum achieved by Plus500 over recent years, as the Group continues to make further progress on its strategic roadmap,” the statement reads.
Plus500 revealed earlier in October that it expects annual revenue and earnings to be ahead of analysts’ estimates even as trading levels normalised from record volumes in the third quarter.
As reported by the fintech company in its financial statements submitted to London Stock Exchange, the group’s revenues amounted to $706 million in the nine months through September 2022. This figure was nearly 27 percent higher when weighed against the $557 million it reported for the same period in 2021.
But taking a quarterly perspective, Plus500 reported that its revenue between July and September were $194 million, down by almost 8 percent from $211 million in the third quarter of 2021. The pattern was much the same for its core profits.
At the bottom line, the spread betting and CFDs broker told investors that it earned $407 million so far in 2022, which was also higher by 29 percent from $316 million in 2021. However, Q3 2022’s EBITDA dropped 21 percent to $102 million from $128 million in the same quarter of 2021.