Plus500 expects to grow from more normal levels in 2021
Plus500, the online trading platform, has confirmed the company will buy back $25m worth of shares, as well as paying a special $30m dividend.
The announcement comes as Plus500 posts record pre-tax profits of $523.3m, up from $189.3 in 2019.
The company announced astonishing revenue growth which came about as small time traders flocked to the platform throughout the coronavirus pandemic, said Rob Murphy, managing director at Edison Investments.
“Key figures were in line with the record earnings already reported in the trading update in January, driven by the volatility of markets throughout the Covid-19 pandemic,” said Murphy.
“EBITDA soared by 168% to $516m in the year to the end of December while revenue and customer income increased 146% to $873m and 161% to $998m respectively.”
A question mark remains over Plus500’s ability to sustain its performance into 2021. Rob Murphy anticipates revenue will retreat to more normal levels over the course of the coming year.
“After what management as ‘an exceptional year’ in 2020, revenues and profit will be under pressure in 2021. Revenues are expected to grow from more normalised 2019 levels but these were 59% lower than in 2020,” said Murphy.
“Evidence of this is already clearly apparent in the Q4 figures which saw revenues down 4% yoy to $91.9m and EBITDA down 65% to $19.9% as margins shrank from 59% to 22%.”
Following a close at 1,3790p, Plus500’s share price dropped as low as 1,334.32p on Wednesday morning as the company managed expectations around its revenue. Into mid-morning the share price steadied around 1% down.
Over the last 12 months Plus500’s share price has risen by 55% from 878.6p to 1,366.29p.
Plus500 is a UK FTSE 250 company listed on the London Stock Exchange’s Main Market for Listed Companies