Source - RNS
RNS Number : 7147V
Plus500 Limited
11 August 2020
 

 

 

11 August 2020

 

Plus500 Ltd.

("Plus500", "the Company" or with its subsidiaries "the Group")

 

Interim Results for the six months ended 30 June 2020

     

Plus500, a leading technology platform for trading Contracts for Difference ("CFDs") internationally, announces its interim results for the six months ended 30 June 2020.

 

Outstanding performance in H1 2020 across all metrics, resulting in significant shareholder returns:

 

· Total revenue of $564.2 million and EBITDA1 of $361.8 million during H1 2020, representing year-on-year growth of   281% and 452% respectively, driven by heightened volatility in unprecedented market conditions and the high quality and consistent performance of Plus500's technology platform

 

· Record levels of Customer Income2 of $556.9 million, up 218% on H1 2019, highlighting strong underlying performance, with more than 47 million customer trades during the period (H1 2019: 17.5 million customer   trades), with Customer Trading Performance3 contributing just 1% of total revenue

 

· Unprecedented levels of New Customers4 and Active Customers5, with client deposits of $1,653.4 million during the first half of 2020 (H1 2019: $ 467.1 million) representing growth on H1 2019 of 254%, and relatively low levels of customer churn

 

· Attractive shareholder returns continue in line with Company's shareholder returns policy, 60% of H1 2020 Net Profit6 to be distributed to shareholders, through dividends and share buybacks with the Board also considering paying special dividends at each year end

Interim dividend of $101 .0   million declared today, representing $0.9531 per share, up 249% on interim dividend in prior year

Share buyback programmes, amounting to $38.9 million completed during H1 2020

New share buyback programme of $ 67 .3 million announced today

 

Market and technology leadership positions reinforced:

 

· Market leadership positions strengthened in key regions - Plus500 remains the leading CFD provider in the UK7, Germany8 and Spain9

 

· Continued investment in Plus500's platform, including enhanced trading tools, new features, new tailored solutions and new financial instruments introduced during H12020

 

· Plus500's proprietary technology formally recognised as a "Preferred Technological Enterprise" following an extensive process of more than three years

Plus500 is one of the first companies to receive this accreditation under the new tax regime by the Israeli Innovation Authority ("IIA") and Israeli Tax Authority ("ITA")

Immediate and substantial benefit to Plus500 Ltd and its shareholders with a reduced Corporation Tax rate of 12% (from the full tax rate of 23%) estimated to deliver repayments and cash savings of over $100 million, with a c.$47 million rebate already received in July 2020

This will remain in force until the end of the financial year 2021 and has the potential to be extended after that

 

1 EBITDA - Earnings before interest, taxes, depreciation and amortisation

 2 Customer Income - Revenue from customer spreads and overnight charges

 3 Customer Trading Performance - Gains/losses on customers' trading positions

 4 New Customers - Customers depositing for the first time

  5Active Customers - Customers who made at least one real money trade during the period

  6According to the Israeli corporate tax rate (23%)

  7By total number of relationships with UK CFD traders. Investment Trends 2020 UK Leverage Trading Report

  8By total number of client relationships. Investment Trends 2020 Germany Leverage Trading Report

  9By total number of client relationships. Investment Trends 2020 Spain Leverage Trading Report

 

 

 

 

 

Plus500 is well placed for future growth:

 

· Financial position remains extremely robust - Plus500 continues to carry no debt, with cash balances of $587.8 million at end of H1 2020 (H1 2019: $327.3 million), and continued strong operating cash conversion10 of 106% (H1 2019: 68%)

 

· Further strengthening and diversifying the Board:

David Zruia appointed as the Group's Chief Executive Officer, as announced on 7 July 2020

Nomination for appointment at the upcoming annual general meeting ("AGM") of an additional Non-Executive Director, announced today - Anne Grim

New Board Committee on Environmental, Social and Governance established

 

· The Board remains very confident about the outlook for the Company, following H1 2020 performance:

Customer Income so far in H2 2020 is more than double that of the prior year

Heightened market volatility expected to normalise during H2 2020

Aim to deliver revenue growth and consistent levels of cash generation over the medium to long term

 

 

Financial Highlights:

 

H1 2020*

H1 2019*

Change %

Q2 2020*

Q2 2019*

Change %

Revenue

$564.2m

$148.0m

281%

$247.6m

$94.1m

163%

EBITDA

$361.8m

$65.6m

452%

$130.2m

$53.8m

142%

EBITDA Margin %

64%

44%

45%

53%

57%

(7%)

Cash balance at period end

$587.8m

$327.3m

80%

$587.8m

$327.3m

80%

  * Unaudited

 

Operational Highlights:

 

H1 2020*

H1 2019*

Change %

Q2 2020*

Q2 2019*

Change %

Number of New Customers

198,176

47,540

317%

  115,225

26,234

339%

Number of Active Customers

328,409

141,692

132%

  264,557

108,724

143%

ARPU11

$ 1,718

$1,044

65%

$936

$866

8%

AUAC12

$634

$1,079

(41%)

$634

$956

(34%)

  * Unaudited

 

David Zruia, Chief Executive Officer, commented:

"Plus500 delivered an outstanding performance during the first half of the year, driven by the strength and differentiation of our proprietary technology, which enabled our business and our customers to benefit from the unprecedented market volatility and event-driven market conditions experienced during the period.

"I would like to thank our people, who helped to deliver this performance by remaining fully committed to ensuring that we offered our customers a consistently high quality service in challenging circumstances.

"As well as our performance in the first half of 2020, driven by our continued delivery in customer acquisition and customer satisfaction, we have continued to invest in our technology, with a focus on driving its scale, efficiency and attractiveness for customers. This programme of continuous improvement and refinement ensures we will continue to deliver sustainable long term growth."

"Overall, the Board remains very confident about the outlook for the business and our ability to deliver sustainable growth in revenue, with continued strong cash generation, over the medium to long term."

 

 

10 Operating cash conversion - Cash generated from operations / EBITDA

11 ARPU - Average Revenue Per User

12 AUAC - Average User Acquisition Cost

 

Investor/analyst conference call:

 

Plus500 will host a conference call for analysts at 9.00 a.m. UK time today. Please contact MHP Communications to register for the call on +44 20 3128 8591 or [email protected] . The presentation materials will be available today at www.plus500.co.uk/Investors/CompanyReports .

 

 

For further details:

Plus500 Ltd

Elad Even-Chen, Chief Financial Officer

Rob Gurner, Head of Investor Relations

+972 4 8189503

+44 7825 189088

[email protected]

 

MHP Communications

Reg Hoare, Rachel Mann, Pete Lambie

 

+44 20 3128 8570

  [email protected]

 

 

 

 

 

The   information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. 

 

About Plus500

 

Plus500 operates a proprietary technology platform for individual customers to trade CFDs internationally. The Group offers more than 2,500 different underlying global financial instruments, comprising equities, indices, commodities, options, ETFs, foreign exchange and cryptocurrencies. Customers of Plus500 can trade CFDs in more than 50 countries and in 32 languages. The trading platform is accessible from multiple operating systems (Windows, iOS, Android and Surface) and web browsers. Plus500 retains operating licences and is regulated in the United Kingdom, Australia, Cyprus, Israel, New Zealand, South Africa, Singapore and the Seychelles.

 

Customer care is and has always been integral to Plus500, as such, customers cannot be subject to negative balances. A free demo account is available on an unlimited basis for platform users and sophisticated risk management tools are provided free of charge to manage leveraged exposure, and stop losses to help customers protect profits, while limiting capital losses. Plus500 does not utilise cold calling techniques and does not offer binary options.  Plus500 shares have a premium listing on the Main Market of the London Stock Exchange (symbol: PLUS) and are a constituent of the FTSE 250 index. www.plus500.com

 

Forward looking statements

 

This announcement contains statements that are or may be forward-looking statements.  All statements other than statements of historical facts included in this announcement may be forward-looking statements, including statements that relate to the Company's future prospects, developments and strategies. The Company does not accept any responsibility for the accuracy or completeness of any information reported by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions express by the press or other media regarding the Group. The Company makes no representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication.

 

Forward-looking statements are identified by their use of terms and phrases such as "believe", "targets", "expects", "aim", "anticipate", "projects", "would", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions.  The forward looking statements in this announcement are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.  Factors that may cause actual results to differ materially from those expressed or implied by such forward looking statements include, but are not limited to, those described in the risk factors.  These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such entity and the environment in which each will operate in the future.  All subsequent oral or written forward-looking statements attributed to the Company or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. Each forward-looking statement speaks only as at the date of this announcement.  Except as required by law, regulatory requirement, the Listing Rules and the Disclosure Guidance and Transparency Rules, neither the Company nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

Review of H1 2020 Results

 

Plus500 is well positioned to access significant growth opportunities

 

Plus500's key driver of commercial and shareholder value is its in-house technology platform, which powers the Plus500 product, its technological marketing capabilities and back office operations. The customer-centric platform delivers a competitive advantage and enables the Company to access future growth in five key areas:

 

-  Technology enhancements: continuing to develop the technology platform to attract and retain more customers, while maintaining a high quality customer experience;

-  Product extensions: continuing to expand Plus500's wide range of financial instruments;

-  New product lines: targeting new product areas, in addition to CFDs;

-  Increasing the Group presence in existing geographies: to drive market share in those territories;

-  New geographies: expanding into new regulated territories where the Company has no current presence.

 

These growth areas will continue to be primarily accessed through organic means. In addition, supported by the Company's robust financial position, Plus500 will also look to access growth through potential targeted acquisitions, as and when appropriate, particularly in relation to new product lines and new geographies.

 

To support our efforts to access these growth opportunities, the Company has built a robust financial foundation, with a consistently high level of cash generation, a resilient balance sheet, a flexible and lean cost structure, and minimal capital expenditure requirements. In addition, Plus500 has a solid functional infrastructure, with an embedded risk management culture and rigorous compliance procedures and processes .  

 

With these factors in mind, supported by a consistent track record of operational and financial performance since the Company's IPO in 2013, Plus500 remains very well positioned to access the major growth opportunities available to it.

 

H1 2020 market environment and Plus500's market position

 

The industry experienced unprecedented market volatility in H1 2020, primarily driven by the COVID-19 pandemic and associated news-related market movements.

 

In this environment, there was intensified platform usage, with client deposits during H1 2020 of $1,653 .4 million, up from $467.1 million during H1 2019, and average deposits per Active Customer growing significantly to $5,034, from $3,296 in H1 2019.

 

Plus500 was extremely well placed to manage these heightened trading volumes, with its technological capabilities performing consistently through the period and its committed employees ensuring customer service remained at constantly high levels.

 

Plus500 continues to maintain its leading positions in its key markets and, for the third year in a row, remains the largest CFD provider in the UK7, Germany8 and Spain9

 

Results Overview

 

Against this backdrop, Plus500 delivered exceptional results during H1 2020, with considerable growth achieved across all financial and operational metrics. 

 

Total revenue for the first half 2020 was $564.2 million (H1 2019: $148.0 million), including revenues of $247.6 million in Q2 2020 (Q2 2019: $94.1 million). As a result of the revenue growth delivered during the period, EBITDA grew to $361.8 million (H1 2019: $65.6 million), of which $130.2 million was achieved in Q2 2020 (Q2 2019: $ 53.8 million). 

 

The Company's balance sheet position continued to improve, with cash balances at the end of H1 2020 of $ 587.8 million (H1 2019: $327.3 million), supported by high levels of cash conversion of 106% in the period (H1 2019: 68%).

 

Operational review

 

Half Year*

% Change

Q2*

% Change

H1 2020

H1 2019

Q2 2020

Q2 2019

Number of New Customers

198,176

47,540

317%

115,225

26,234

 

339%

Number of Active Customers

328,409

141,692

132%

264,557

108,724

143%

ARPU

$1,718

$1,044

65%

$936

$866

8%

AUAC

$634

$1,079

(41%)

$634

$956

(34%)

 

* Unaudited

 

Plus500's excellent performance in H1 2020 was also reflected across all customer-related metrics, with the Group facilitating record levels of Active and New Customers at attractive levels of ARPU and AUAC.

 

The Company onboarded a total of 198,176 New Customers in H1 2020 (H1 2019: 47,540), including 115,225 in Q2 2020 (Q2 2019: 26,234), as a result of its continued investment in marketing technology during the first half of 2020 and in previous periods. The number of Active Customers in H1 2020 increased by 132% to 328,409 (H1 2019: 141,692), including 264,557 in Q2 2020 (Q2 2019: 108,724).

 

Customer Income during the first half of 2020 peaked during March and April, with levels in May and June in line with previous peak trading levels experienced in the first half of 2018.

 

In H1 2020, in each of the Group reported regions, (the UK, EEA13, Australia and the ROW14), the number of Active Customers more than doubled, compared to H1 2019, and the number of New Customers grew by over 300% on H1 2019.  Consequently, revenue growth in the half was very strong in each region, including 343% in the UK, 316% in EEA, 180% in Australia and 263% in the ROW.  

 

The H1 2020 customer churn rate was relatively low at 8.33% (H1 2019: 34.07%), including 23.03% in Q2 2020 (Q2 2019: 16%), reflecting on-going successful customer service initiatives which provide a better user experience and help to further increase the Group's performance.

 

Customer loyalty remains high, with 65% of the Group's H1 2020 revenues derived from customers trading on the platform for over one year.

 

ARPU also increased significantly in H1 2020 to $1,718 (H1 2019: $1,044), including $936 in Q2 2020 (Q2 2019: $866).

 

AUAC was materially lower during H1 2020 at $634 (H1 2019: $1,079), including $634 in Q2 2020 (Q2 2019: $956). This was due to the record number of New Customers on-boarded during the first half of 2020, which, as stated above, was partly driven by previous investments in the Company's marketing technological capabilities, as well as the investment made during H1 2020. The Group expects that AUAC will rise steadily in the remainder of the year as the Company's customer profile continues to shift to higher value customers, and as the heightened levels of market volatility normalises over time.

 

The Group's market-leading mobile and tablet offering continues to be extremely popular with customers, helping Plus500 to continue driving market share in a number of territories. Over 80% of the Group's revenue was generated from mobile devices during the period (H1 2019: 79%), with more than 70% of all customer trades on a mobile device in the first half of 2020, in line with the prior year.

 

13 EEA - the European Economic Area

14 ROW - Rest of World

 

 

Technology review  

 

The technology powering the Plus500 platform remains a key differentiator to its peers, helping to deliver a high quality service to its customers, to drive the Company's efforts in digital marketing technology and to ensure its back office operations systems are managed efficiently.

 

Plus500's technology enables it to scale its business across new products and markets while delivering a high quality customer experience in existing markets. In addition, the technology is wholly owned and developed by the Company, which allows rapid in-house development and enhancement of its services, enabling Plus500 to quickly react to customer needs, fast emerging market trends and regulatory changes.

 

Plus500 Trading Platform

 

During H1 2020, the Company continued to improve the trading experience for customers, through a number of new features, product enhancements and service optimisations. These included the "Dark Mode" feature, initially introduced last year but rolled out across all operating systems, (iOS and Android) including on mobile platforms, on the back of continued customer demand. In addition, the Company upgraded the trading platform's integrated notification system during the period, enabling the use of additional interactive and visual interfaces. This helped to improve the Company's direct interaction with customers. The Company also introduced a number of new chart enhancement features, including improved charting controls and a multiple charts analysis feature. Plus500 remains fully aligned with customers' requirements and demands, and, consequently, continues to provide tailored solutions across its services, including additional payment methods for customers, where such requirements have arisen.  The "Trader's Guide" was also upgraded during the period, by extending the variety of training tools and tutorial videos in this portal.  

 

The Company also increased the range of CFDs available for its customers to trade during the period, including a variety of new instruments in commodities and equities.

 

Plus500 remains committed to continuously developing and investing in its platform, with a focus on delivering consistently high performance of customer-related metrics. With this in mind, the Group continues to work on additional features, instruments, educational modules, services and technical enhancements, with a view to further improving the best-in-class experience offered to customers across its platform.

 

Customer Acquisition Capabilities

 

Given the predominance of its customers using mobile devices and online platforms, Plus500's marketing focus is online, with the Group continuing to invest in targeted initiatives to drive customer acquisition and satisfaction.

 

In order to grow its customer base cost-effectively and improve customer acquisition initiatives, the Group has developed its own technology-driven marketing system based on data analytics tools and algorithms. This system is a sophisticated analytical platform which allows Plus500 to monitor and control its marketing and customer acquisition spend, ensuring marketing resources are efficiently targeted and that campaigns deliver measurable results.

 

This technology allows the Group to determine the prospective return on investment of any potential customer, based on inputs collected from previous marketing campaigns and trading history.

 

During the first half of 2020, Plus500 increased the level of investment in its marketing technology, both from online campaigns and additional tools to support marketing efforts. 

 

Plus500 believes this unique and wholly-owned marketing technology remains a fundamental driver to the prospects and performance of the Group.

 

To accompany its online technological customer acquisition capabilities, Plus500 also invests in offline marketing strategies, with a particular focus on sports sponsorship. During H1 2020, the Company signed a sponsorship agreement with BSC Young Boys Football Club, the Swiss Super League Champions, for the 2020/21 and 2021/22 seasons, with an option to extend beyond this date. In addition, towards the start of H2 2020, the Company signed a sponsorship agreement with Legia Warsaw, Poland's current national champions, to be its main sponsor for the 2020/21, 2021/22 and 2022/23 seasons.

 

These sponsorship agreements sit alongside the Group's ongoing sponsorship contracts with the Plus500 Brumbies and Club Atlético de Madrid.

 

 

 

 

Regulation

 

Plus500 seeks to remain compliant with, and operate within, global regulatory standards, and remains well positioned for any future regulatory changes, as and when they are implemented, in both existing and new geographies. It is the Company's firm view that regulatory measures support the industry and provide better protection to customers.

 

As highlighted in the Company's previous announcements, the Company continues to closely monitor the regulatory environment in Australia, where it is expected that the Australian Securities and Investments Commission (ASIC) will impose certain restrictions on the sale and marketing of CFDs to retail customers in due course. Plus500 will update the market on the regulatory situation in Australia, as and when appropriate.

 

Risk Management & Client Execution

 

The Group deploys real-time monitoring technology across its customer base to ensure risk is effectively managed, as highlighted by the Group's management of heightened levels of trading volumes during H1 2020 .

 

Furthermore, the Group's risk management technology is fully embedded across the business, as the Group ensures its risk exposures are aligned with its risk appetite across the wide portfolio of the CFD instruments that are offered to customers. The technology supports risk management processes, systems and procedures, with a risk management mindset remaining fundamental to the Group's corporate culture.

 

Consequently, the Company's approach to customer execution is driven in the context of a clear, rigorous risk management framework, which manages its risk exposure in this area through:

 

Real-time monitoring technology, embedded in the platform

Pre-defined risk limits, at Group level and on a customer-by-customer basis

Internal offsetting controls

 

This approach is aligned with the Plus500 technology platform and customer-centric model, through which the Company always seeks to protect customers via various embedded platform features. In particular, the Group offers all types of its customers, on a global basis, negative balance protection, which helps to minimise risk and protect Plus500's customers. These features have been embedded within the platform since its inception, ahead of it being required under relatively new regulatory standards in certain regions. As a result of such features, the Plus500 platform ensures that customers benefit from high quality trading execution.

 

H1 2020 was a period of heightened volumes of trading across global financial markets . While these unprecedented market conditions have resulted in short term fluctuations in Customer Trading Performance, the Company continues to expect that contribution from this revenue component will be broadly neutral over time. Over the last six and a half years, including during H1 2020, Customer Trading Performance accounted for just 1% of total revenue.

 

Corporate Governance and Social Responsibility

 

The Company maintains a best practice corporate governance framework and continues to participate in a number of social responsibility initiatives.

 

During the period, the Group participated in a number of initiatives to support and assist local communities, charities and the Company's employees. These included on-going monetary contributions to various charities, including the Australian bush fire relief, as well as the provision of resource and equipment to a number of charities, non-profit organisations and community centres.

 

In relation to the COVID-19 pandemic, the Company ensured it gave continuous support to employees globally around flexible working, wellbeing issues and concerns, as well as childcare. In addition, the Company provided a monetary donation to a hospital funding the purchase of critical care medical equipment, food packages and supplies to vulnerable communities.

 

There were a number of Board appointments during the period and at the start of H2 2020. David Zruia was appointed as the Group's permanent Chief Executive Officer on 7 July 2020, following his appointment as interim Chief Executive Officer and Executive Director, as announced on 20 April 2020. The diversification of the composition of the Board remains a key priority and there has been further progress in this regard. The Company is pleased to announce that Anne Grim has today been nominated for appointment at the upcoming AGM as Non-Executive Director, helping to expand the range of the Board's experience and further diversifying the composition of the Board.

 

Furthermore, the Board has established, for the first time, an Environmental, Social and Governance Committee, to be chaired by Daniel King, with an objective of regularly reviewing the Company's activities in these areas and ensuring best practice is adhered to on a consistent basis.

 

Update on Group's Corporation Tax status

 

After the end of the period, the Company was delighted to receive approval from both the ITA and the IIA recognising the Company as a "Preferred Technological Enterprise" for the financial years 2017, 2018 and 2019, following an extensive review process conducted by these authorities.

 

Accordingly, Plus500 Ltd's Corporation Tax rate for these three financial years has been reduced from 24%, 23% and 23% in each respective year to 12% in each of these years. Over $100 million of initial repayments and cash savings are expected to be delivered, with a c.$47 million rebate already received from the ITA in July 2020. These amounts are not recognised in the interim financial statements for the six months ended 30 June 2020.

 

Additionally, as a result of the ITA tax ruling and, subject to the Company complying with the statutory R&D spending thresholds, the Company's Corporation Tax rate for the financial years 2020 and 2021 is expected to remain at 12%.

 

In addition, the Withholding Tax rate applicable for dividends has been reduced from 25% to 20%. This is also applicable to the recent final dividend for the financial year 2019 paid to shareholders and onwards for future dividends, up to the financial year 2021. The amount representing the 5% difference in the Withholding Tax rate for the final 2019 dividend will be paid to the Company's shareholders as a direct distribution in due course. 

 

The "Preferred Technological Enterprise" accreditation has been achieved following an extensive process of more than three years, Plus500 is one of the first companies to receive this accreditation under the new tax regime by the IIA and the ITA. This will remain in force until the end of FY 2021 and has the potential to be extended after that. The Company will provide further updates on its tax status in due course.  

 

Financial Review

* Unaudited

 

Half Year*

% Change

Q2*

% Change

H1 2020

H1 2019

Q2 2020*

Q2 2019

Revenues

$148.0m

281%

$247.6m

$94.1m

163%

EBITDA

$361.8m

$65.6m

452%

$130.2m

$53.8m

142%

EBITDA Margin

64%

44%

  45%

53%

57%

(7%)

 

The Group delivered total revenue of $564.2 million in H1 2020 (H1 2019: $148.0 million), including revenues of $247.6 million in Q2 2020 (Q2 2019: $94.1 million).

 

The underlying performance of the business was strong, driven by the extremely high volume of customer trades during the first half of 2020. Customer Income grew to $556.9 million (H1 2019: $175.0 million), including $323.4 million in Q2 2020 (Q2 2019: $93.0 million). Customer Trading Performance for the first half of 2020 was just 1% of total revenue at $7.3 million (H1 2019: $(27) million).

 

Driven by the growth in revenue, EBITDA for the first half of 2020 was $361.8 million (H1 2019: $65.6 million), including $130.2 million in Q2 2020 (Q2 2019: $53.8 million). EBITDA margin in H1 2020 was 64% (H1 2019: 44%), including 53% in Q2 2020 (57% in Q2 2019), despite a considerable increase in marketing investment to attract New Customers.

 

 

Net profit for the period was $320.0 million (H1 2019: $51.6 million). Pursuant to the Israeli corporate tax rate applicable to the Company prior to its recognition as a "Preferred Technological Enterprise" (23%), the Net profit for the H1 2020 would be $280.6 million.

 

Earnings per share for the period were $2.98 (H1 2019: $0.45).

 

Costs remained well controlled and 82% of the Group's costs were variable (H1 2019: 72%), providing the Company with greater level of flexibility. The Group's variable costs are positively correlated to enhanced performance, including marketing and payment processing expenses

 

As the number of New Customers during the first half of 2020 increased to a record level, marketing costs increased by 145% to $125.8 million while AUAC was materially lower during H1 2020 at $634, including $634 in Q2 2020. The increase in marketing costs for FY 2020 is expected to be more moderate, compared to H1 2020.

 

Total SG&A expenses therefore increased by 144% to $203.6 million in the half (H1 2019: $83.5 million).

 

Net financial income amounted to $2.6 million in the first half of 2020 (H1 2019: Net financial expenses of $0.6 million), the majority of which arose from foreign exchange and translation differences. A substantial proportion of the Company's cash is held in US dollars in order to provide a natural hedge, therefore reducing the impact of currency movements on financial expenses. This result reflects an optimisation of financial cash management during the period.

 

Total assets increased by 72% to $614.6 million as of 30 June 2020 (30 June 2019: $357.0 million), with equity of $ 524.6 million representing approximately 85 % of the balance sheet as of 30 June 2020 (30 June 2019: $256.1 million).  

 

The Group remains highly cash generative, with 106 % operating cash conversion during the first half of 2020 (H1 2019: 68%). In addition, the Company requires relatively low levels of capital expenditure as a result of its automation and technological capabilities. The combination of these features means that a high proportion of net income was converted into cash during H1 2020, as with previous periods.

 

Cash generated from operations during the first half of 2020 was $385.0 million (H1 2019: $44.4 million), resulting in current period-end cash balances of $ 587.8 million (H1 2019: $ 327.3 million, FY 2019: $292.9 million).

 

Cash balances reduced during the first half as a result of the completion of two share buyback programmes during H1 2020 ($38.9 million).

 

Note: The consolidated financial statements are presented in US dollars, which is the Company's functional and presentation currency. Foreign currency transactions and balances in currencies different from the US dollar are translated into the US dollar using the exchange rates prevailing on the dates of the transactions or at the balance sheet date.

 

Shareholder returns

 

The Company's shareholder return policy has been to return at least 60% of net profits to shareholders as a normal return on a half yearly basis, with at least 50% of this distribution being made by way of dividends. In addition, the Board will also consider paying of special dividends at each year end.

 

The Board has considered that the benefits of the change in tax rate from the Israeli statutory rate (23%) to 12% are special rather than normal and so this 60% will be assessed according to the full rate (23%).

 

The Board will continue to assess the availability of any excess capital and prioritise its use, as it has done on a consistent basis historically, and carefully evaluate any identified opportunities against the long term benefit of organic investment, potential targeted M&A, as and when appropriate, or additional returns to shareholders.

 

Since the IPO in 2013 including those announced today, the Company has returned $1,086.4 million to shareholders, of which $923.2 million was through dividend payments and $163.2 million was through share buybacks.

 

During H1 2020, the Company continued to execute its share buyback programmes, both of which were completed, with 3,051,527 Ordinary Shares purchased during the period, amounting to a total of $38.9 million, at an average share price of £10.45.

 

With respect to the half year ended 30 June 2020, the Board is pleased to declare an interim dividend of $101.0 million, representing $0.9531 per share, with an ex-dividend date of 20 August 2020, a record date of 21 August 2020 and a payment date of 11 November 2020.

 

The Board is also pleased to announce a new share buyback programme amounting to $ 67 .3 million.

 

Outlook

 

The Board remains very confident about the outlook for Plus500, particularly given the Company's outstanding performance in H1 2020.

 

Customer Income so far in H2 2020 is more than double that of the prior year, supported by on-going heightened levels of market volatility and our increased Active Customer base.

 

However, while it remains difficult to predict the duration of this level of market volatility, we are expecting that it will normalise during the course of H2 2020.

 

Looking further ahead,   Plus500 is well placed for future growth, given its proprietary trading platform, its flexible and scalable business model, its robust financial position and a track record of delivery against key performance metrics.

 

Future growth will continue to be primarily delivered through organic means, focused on product extensions, technology enhancements, and in particular through introducing new product lines, and developing our presence in new and existing geographies, which we will look to access through potential targeted acquisitions, as and when appropriate. 

 

With this in mind, the Group aims to deliver revenue growth and consistent levels of cash generation over the medium to long term.

 

 

 

 

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (UNAUDITED)

 

 

 

Six months

ended 30 June

Year ended

31 December

 

 

2020

2019

2019

 

 

(Unaudited)

(Audited)

 

Note

U.S. dollars in millions

TRADING INCOME

4

564.2

148.0

354.5

Selling and marketing expenses

5

179.4

71.2

138.9

Administrative and general expenses

6

24.2

12.3

25.5

OPERATING PROFIT

 

360.6

64.5

190.1

Financial income

 

7.7

4.0

6.7

Financial expenses

 

5.1

4.6

7.5

FINANCIAL INCOME (EXPENSE) - NET

 

2.6

(0.6)

(0.8)

PROFIT BEFORE INCOME TAX

 

363.2

63.9

189.3

INCOME TAX EXPENSE

8

43.2

12.3

37.6

PROFIT AND COMPREHENSIVE INCOME

 

 

 

 

  FOR THE PERIOD

 

320.0

51.6

151.7

 

 

 

 

 

In U.S. dollars

 

 

 

 

 

EARNINGS PER SHARE (basic and diluted)

9

2.98

0.45

1.35

 

 

 

 

 

The accompanying notes are an integral part of this condensed consolidated interim financial information.

 

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 JUNE 2020 (UNAUDITED)

 

 

 

As of

30 June

As of

31 December

 

 

 

 

2020

2019

2019

 

 

 

 

(Unaudited)

(Audited)

 

 

 

Note

U.S. dollars in millions

 

 

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

  Property, plant and equipment

 

2.7

3.1

2.8

 

 

  Right of use assets

 

4.4

5.9

5.3

 

 

Long term other receivables

 

4.9

1.5

1.2

 

 

Total non-current assets

 

12.0

10.5

9.3

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Income tax receivable

 

7.6

7.1

2.8

 

 

  Other receivables

 

7.2

12.1

11.9

 

 

  Cash and cash equivalents

 

587.8

327.3

292.9

 

 

Total current assets

 

602.6

346.5

307.6

 

 

TOTAL ASSETS

 

614.6

357.0

316.9

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Lease liabilities (net of current maturities)

 

3.3

4.5

4.1

 

 

Share-based compensation

 

2.3

0.7

-

 

 

Total non-current liabilities

 

5.6

5.2

4.1

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Dividend

10

40.6

70.2

-

 

 

Share-based compensation

 

4.6

3.0

4.8

 

 

  Income tax payable

 

3.1

0.8

1.8

 

 

  Other payables

 

22.3

6.7

10.3

 

 

  Service suppliers

 

11.5

13.3

10.0

 

 

  Current maturities of lease liabilities

 

1.5

1.5

1.6

 

 

  Trade payables - due to clients

12

0.8

0.2

0.2

 

 

Total current liabilities

 

84.4

95.7

28.7

 

 

TOTAL LIABILITIES

 

90.0

100.9

32.8

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

  Ordinary shares

 

0.3

0.3

0.3

 

 

  Share premium

 

22.2

22.2

22.2

 

 

  Cost of Company's shares held by the Company

11

(95.9)

(15.8)

(57.0)

 

 

  Retained earnings

 

598.0

249.4

318.6

 

 

Total equity

 

524.6

256.1

284.1

 

 

TOTAL LIABILITIES AND EQUITY

 

614.6

357.0

316.9

 

 

 

 

 

 

 

David Zruia

Elad Even-Chen

Penelope Judd

Chief Executive Officer

Group Chief Financial Officer

Non-Executive Director and Chairman

                 

 

Date of approval of the condensed consolidated interim financial statements by the Company's Board of Directors: 11 August 2020

Registered Company number (Israel): 514142140

 

The accompanying notes are an integral part of this condensed consolidated interim financial information.

 

 

 

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX-MONTH PERIOD EN DED 30 JUNE 2020 (UNAUDITED)

 

 

Ordinary

Share

Cost of Company's shares held by

Retained

 

 

shares

premium

the Company

Earnings

Total

 

 

U.S. dollars in millions

 

 

 

 

 

 

BALANCE AT 1 JANUARY 2020 (audited)

0.3

22.2

(57.0)

318.6

284.1

CHANGES DURING THE SIX MONTHS

ENDED 30 JUNE 2020 (unaudited):

 

 

 

 

 

  Profit and comprehensive income for the period

-

-

-

320.0

320.0

TRANSACTION WITH SHAREHOLDERS:

 

 

 

 

 

  Dividend

-

-

-

(40.6)

(40.6)

Acquisition of treasury shares

-

-

(38.9)

-

(38.9)

BALANCE AT 30 JUNE 2020 (unaudited)

0.3

22.2

(95.9)

598.0

524.6

 

 

 

 

 

 

BALANCE AT 1 JANUARY 2019 (audited)

0.3

22.2

(9.8)

268.0

280.7

CHANGES DURING THE SIX MONTHS

ENDED 30 JUNE 2019 (unaudited):

 

 

 

 

 

  Profit and comprehensive income for the period

-

-

-

51.6

51.6

TRANSACTION WITH SHAREHOLDERS:

 

 

 

 

 

  Dividend

-

-

-

(70.2)

(70.2)

Acquisition of treasury shares

-

-

(6.0)

-

(6.0)

BALANCE AT 30 JUNE 2019 (unaudited)

0.3

22.2

(15.8)

249.4

256.1

 

 

 

 

 

 

BALANCE AT 1 JANUARY 2019 (audited)

0.3

22.2

(9.8)

268.0

280.7

CHANGES DURING THE YEAR

ENDED 31 DECEMBER 2019 (audited) :

 

 

 

 

 

  Profit and comprehensive income for the year

-

-

-

151.7

151.7

TRANSACTION WITH SHAREHOLDERS:

 

 

 

 

 

  Dividend

-

-

-

(101.1)

(101.1)

Acquisition of treasury shares

-

-

(47.2)

-

(47.2)

BALANCE AT 31 DECEMBER 2019 (audited)

0.3

22.2

(57.0)

318.6

284.1

 

 

 

The accompanying notes are an integral part of this condensed consolidated interim financial information.

 

 

 

 

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (UNAUDITED)

 

 

Six months ended

Year ended

 

30 June

31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

OPERATING ACTIVITIES:

 

 

 

Cash generated from operations (see note 13)

385.0

44.4

170.1

Income tax paid, net

(49.6)

(28.0)

(47.6)

Interest received, net

1.9

2.2

4.8

Net cash flows provided by operating activities

337.3

18.6

127.3

INVESTING ACTIVITIES:

 

 

 

Purchase of property, plant and equipment

(0.2)

(0.1)

(0.1)

Net cash flows used in investing activities

(0.2)

(0.1)

(0.1)

FINANCING ACTIVITIES:

 

 

 

Dividend paid to equity holders of the Company

-

-

(101.1)

Payment of principal in respect of leases liabilities

(0.9)

(0.9)

(1.8)

Acquisition of own shares (see note 11)

(38.9)

(6.0)

(47.2)

Net cash flows used in financing activities

(39.8)

(6.9)

(150.1)

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASHEQUIVALENTS

297.3

11.6

(22.9)

 

 

 

 

BALANCE OF CASH AND CASH EQUIVALENTS AT

 

 

 

  BEGINNING OF THE PERIOD

292.9

315.3

315.3

Gains (losses) from exchange differences on cash

 

 

 

  and cash equivalents

(2.4)

0.4

0.5

BALANCE OF CASH AND CASH EQUIVALENTSAT

 

 

 

  END OF THE PERIOD

587.8

327.3

292.9

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of this condensed consolidated interim financial information.

 

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

NOTE 1 - GENERAL INFORMATION

 

Information on activities

 

Plus500 Ltd. (hereafter - the Company) and its subsidiaries (hereafter - the Group) has developed and operates an online and mobile trading platform within the CFD sector enabling its international customer base of individual customers to trade CFDs on over 2,500 underlying financial instruments internationally. The Group currently offers CFDs referenced to equities, indices, commodities, options, ETFs, cryptocurrencies and foreign exchange.

 

The Group's offering is available internationally with a significant market presence in the UK, Australia, the European Economic Area (EEA) and the Middle East and has customers located in more than 50 countries. The Group operates through operating subsidiaries regulated by the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investments Commission (ASIC) in Australia, the Cyprus Securities and Exchange Commission (CySEC) in Cyprus, the Israel Securities Authority (ISA) in Israel, the Financial Markets Authority (FMA) in New Zealand, the Financial Sector Conduct Authority (FSCA) in South Africa, the Monetary Authority of Singapore (MAS) in Singapore and the Financial Services Authority (FSA) in the Seychelles (Obtained in January 2020).

 

The Company also has a subsidiary in Bulgaria which provides operational services to the Group. 

 

On 24 July 2013, the Company's shares were admitted to trading on AIM market of the London Stock Exchange in the Company's initial public offering ("IPO"). On 26 June 2018, the Company's shares were admitted to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange PLC's Main Market for listed securities and trading of the Company's shares on the AIM market of London Stock Exchange PLC was cancelled.

 

The Group is engaged in one operating segment - CFD trading.

 

NOTE 2 - BASIS OF PREPARATION

 

Basis of accounting and accounting policies

These condensed consolidated interim financial statements for the six-month period ended 30 June 2020 have been prepared in accordance with IAS 34 - 'Interim financial reporting' as issued by the International Accounting Standards Board. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2019, which have been prepared in accordance with IFRS. These condensed consolidated interim financial information are reviewed and not audited.

 

Going concern

The Group has considerable financial resources, a broad range of financial instruments and a geographically diversified business. As a consequence, the Directors believe that the Group is well placed to manage its business risks in the context of the current economic outlook. Accordingly, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors therefore continue to adopt the going concern basis in preparing these condensed consolidated interim financial statements.

 

 

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

 

NOTE 3 - ACCOUNTING POLICIES

 

Significant accounting policies and computation methods used in preparing the condensed consolidated interim financial information are consistent with those used in preparing the 2019 annual financial statements, except for the following:

 

Income tax in interim periods is recognised based on management's best estimate of the annual income tax rate expected. (See note 8)

 

NOTE 4 - TRADING INCOME

 

The Trading income attributed to geographical areas according to the location of the customer is as follows:

 

 

Six months

ended 30 June

Year ended 31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

 

 

 

 

  European Economic Area (EEA)*

254.8

61.2

150.9

  United Kingdom

71.7

16.2

38.6

  Australia

63.3

22.6

51.2

  Rest of the World

174.4

48.0

113.8

 

564.2

148.0

354.5

 

 *Other than the United Kingdom which is presented separately in the table above.

 

NOTE 5 - SELLING AND MARKETING EXPENSES

 

 

Six months

ended 30 June

Year ended 31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

 

 

 

 

  Payroll and related expenses

8.9

7.5

14.9

  Variable Bonuses

5.7

0.8

2.2

  Share-based compensation

2.7

0.2

1.9

  Commission to agents

10.7

4.4

8.1

  Advertising and technology costs

115.1

46.9

87.5

  Commissions to processing companies

30.1

7.2

15.8

  IT and data feeds costs

4.2

3.6

7.2

  Third party customer support

0.4

0.2

0.4

  Sundry

1.6

0.4

0.9

 

179.4

71.2

138.9

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

 

NOTE 6 - ADMINISTRATIVE AND GENERAL EXPENSES

 

 

Six months

ended 30 June

Year ended 31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

 

 

 

 

Payroll and related expenses

4.2

4.4

7.7

  Variable Bonuses

5.4

1.2

3.0

Share-based compensation

2.2

0.1

1.8

Professional and regulatory fees

8.6

2.9

5.8

Office expenses 

1.2

1.4

2.8

Travelling expenses

0.1

0.3

0.5

Public company expenses

0.5

0.5

0.9

Non-refundable VAT

0.8

0.4

0.8

Depreciation and amortisation

1.2

1.1

2.2

 

24.2

12.3

25.5

 

NOTE 7 - OPERATING EXPENSES

 

The presentation below reflects the breakdown of operating expenses by nature of expense.

 

 

Six months

ended 30 June

Year ended 31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

 

 

 

 

Employee benefit expenses

 29.1

 14.2

 31.5

IT and Technology costs

 33.9

 14.6

 28.6

  Commissions to processing companies

 30.1

 7.2

 15.8

Advertising, marketing and commission to agents

96.1

40.3

74.2

Professional and regulatory fees

8.6

2.9

5.8

Depreciation and amortisation

1.2

1.1

2.2

Other

4.6

3.2

6.3

 

203.6

83.5

164.4

 

In the year ended December 31, 2019 and the six months periods ended June 30, 2020 and June 30, 2019, IT and Technology costs together with additional allocated other technological related costs were $40.3 million, $39.7 million and $19.1 million, respectively.

 

 

 

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

 

NOTE 8 - INCOME TAX EXPENSES 

 

Law for the Encouragement of Capital Investments, 5719-1959

 

The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets) by "Industrial Enterprises" (as defined under the Investment Law).

 

New Tax benefits under the 2017 Amendment that became effective on January 1, 2017 (
"2017 Amendment")

 

The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on December 29, 2016, and is effective as of January 1, 2017. The 2017 Amendment provides new tax benefits for two types of Technology Enterprises, as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.

 

The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a Preferred Technology Enterprise and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as Preferred Technology Income, as defined in the Investment Law.

 

Dividends distributed by a Preferred Technology Enterprise, paid out of Preferred Technology Income, are generally subject to withholding tax at source at the rate of 20% or such lower rate as may be provided in an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate). However, if such dividends are paid to an Israeli company, no tax is required to be withheld. If such dividends are distributed to a foreign company and other conditions are met, the withholding tax rate will be 4% (or a lower rate under a tax treaty, if applicable, subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate).

 

a.  Company taxation in Israel

 

Under the amendment of the Encouragement of Capital Investment Law which became effective in January 2017 (the "2017 Amendment"), provided the conditions stipulated therein are met, technological income derived by Preferred Companies from "Preferred Technological Enterprise"  (as defined in the 2017 Amendment) (hereafter - "PTE"), would be subject to reduced corporate tax rates of 12%. A Preferred Company distributing dividends from technological income derived from its PTE, would subject the recipient to a 20% tax (or lower, if so provided under an applicable tax treaty). The 2017 Amendment further provides that, in certain circumstances, a dividend distributed to a corporate shareholder who is not an Israeli resident for tax purposes, would be subject to a 4% tax. Such taxes would generally be withheld at source by the distributing company.

 

In May 2019 the Company obtained a tax ruling from the Israeli Tax Authorities (hereafter - "ITA") and subject to the Company complying with the conditions stipulated by the tax ruling which the company met and the Encouragement of Capital Investment Law, The Company is considered as PTE. As a result, the corporate tax rate for the years 2020 and 2021 is 12%.

 

As for tax years 2017-2019, refer to note 15.

 

 

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

 

NOTE 8 - INCOME TAX EXPENSES (continued)

 

b.  Taxes on Income included in the consolidated income statements for the reported periods

 

 

Six months

ended 30 June

Year ended 31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

 

 

 

 

Current taxes:

 

 

 

Current taxes in respect of current period's profit 

46.9

12.3

37.3

 

 

 

 

Deferred income taxes:

 

 

 

  Change of deferred taxes asset 

(3.7)

-

0.3

Taxes on income expenses

43.2

12.3

37.6

 

c.  Tax assessments

 

The Company has final tax assessments for the year 2016. Tax audit for the years 2017-2018 is currently taking place. 

 

NOTE 9 - EARNINGS PER SHARE

 

Earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. See note 11.

 

Six months ended 30 June

31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

 

 

 

Profit attributable to equityholders of the

 

 

 

  Company (in U.S dollars)

320,009,932

51,609,966

151,657,311

 

 

 

 

  Weighted average number of ordinary shares 

 

 

 

   in issue*

107,238,303

113,446,671

112,460,599

 

  *After weighting the effect of the buyback programme.

 

 

 

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

 

NOTE 10 - DIVIDEND

 

The amounts of dividends and the amounts of dividends per share for the years 2020 and 2019 declared and distributed by the Company's Board of Directors are as follows:

 


 

Date of declaration

Amount of dividend in millions of $ (*)

 

Amount of dividend

Per share $

 

Date of payment to

Shareholders

12 February 2019

70.2

0.6191

9 July 2019

13 August 2019

30.9

0.2734

28 November 2019

12 February 2020

40.6

0.3767

13 July 2020

 

(*) Between the dividend announcement date and the record date of the dividend, the number of issued and outstanding Ordinary Shares of the Company decreased as a result of the repurchase by the Company of Ordinary Shares during such period and the classification of such repurchased Ordinary Shares as dormant shares that are not entitled to dividends. However this did not affect the dividend per share as announces on dividend announcement date.

 

NOTE 11 - ACQUISITION OF THE COMPANY'S SHARES BY THE COMPANY

 

The Board approves buyback programmes. The buyback programmes are funded from the Company's net cash balances.

 

 

 

Period

Number of ordinary shares that were purchased

Aggregate purchase amount (US $ in millions)

 

Average price of shares bought back

Year ended December 31, 2019

4,746,566

47.2

£8.19

Six months ended June 30, 2019

487,500

6.0

£10.13

Six months ended June 30, 2020

3,051,527

38.9

£10.45

 

 

 

 

 

NOTE 12 - TRADE PAYABLES - DUE TO CLIENTS

 

 

 

As of 30 June

As of 31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

Customers deposits, net* 

404.0

151.1

162.8

Segregated client funds

(403.2)

(150.9)

(162.6)

 

0.8

0.2

0.2

 

 

 

 

*Customers deposits, net are comprised of the following:

 

 

 

Customers deposits 

432.1

189.3

221.1

Less - financial derivative open positions:

 

 

 

  Gross amount of assets

(82.3)

(48.9)

(68.3)

  Gross amount of liabilities

54.2

10.7

10.0

 

404.0

151.1

162.8

 

* The total amount of 'Trade payables - due to clients' includes bonuses to the clients.

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

 

NOTE 13 - CASH GENERATED FROM OPERATIONS

 

 

Six months

ended 30 June

Year ended 31 December

 

2020

2019

2019

 

(Unaudited)

(Audited)

 

U.S. dollars in millions

Cash generated from operations activities

 

 

 

Net income for the period

320.0

51.6

151.7

Adjustments required to reflect the cash flows from

 

 

 

  operating activities:

 

 

 

Depreciation and amortisation

0.3

0.3

0.6

Amortisation of right of use assets

0.9

0.8

1.6

Liability for share-based compensation

4.9

0.3

3.7

Settlement of share-based compensation

(5.1)

(7.5)

(7.5)

Taxes on income

43.2

12.3

37.6

Interest expenses in respect of leases

0.1

0.1

0.3

Exchange differences in respect of leases

(0.1)

0.1

0.3

Interest income

(1.9)

(2.2)

(4.8)

  Foreign exchange losses (gains) on operating activities

1.6

 (0.1)

(0.3)

 

43.9

4.1

31.5

Operating changes in working capital:

 

 

 

Decrease (increase) in other receivables

4.7

(0.1)

0.1

Increase (decrease) in trade payables due to clients

0.6

(0.1)

(0.1)

Increase (decrease) in other payables

14.3

(10.1)

(8.8)

Increase (decrease) in Service suppliers

1.5

(1.0)

(4.3)

 

21.1

(11.3)

(13.1)

Cash flows from operating activities

385.0

44.4

170.1

 

Non-cash transactions

In February 12, 2020, the Company declared a dividend in an amount of $40.6 million ($0.3767 per share). The dividend was paid to shareholders on 13 July 2020. See note 10.

 

NOTE 14 - FINANCIAL RISK MANAGEMENT

 

Financial risks arising from financial instruments are analysed into market, credit, concentration and liquidity risks. These condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements. Details of how these risks are managed are discussed in the financial risk management note of the 2019 Plus500 Ltd Annual Report.

 

There has not been a significant change in the Group's financial risk management processes or policies since the year end.

 

 

 

 

 

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

 

NOTE 15 - SUBSEQUENT EVENTS

 

At the beginning of July 2020, the Company received an approval from the Israeli Innovation Authority that together with the tax ruling received from the Israeli Tax Authority ("ITA") in May 2019, recognising the company as a Preferred Technology Enterprise ("PTE") for the years 2017, 2018 and 2019. Accordingly, the applicable tax rates for the preferred technological income of a PTE for these years is 12%. Corporate tax rate for the years 2017, 2018 and 2019 was 24%, 23% and 23%, respectively.

In July 2020 the Company received approximately $47.0 million rebate (including interest) reflecting the reduced tax rate for 2018. A rebate in regards to the years 2017 and 2019 is also expected to be received by the ITA. These amounts are not reflected in the condensed consolidated interim financial statements for the period ended 30 June 2020.

 

On 11 August 2020 the Company declared an interim dividend in an amount of $101.0 million ($0.9531 per share). The dividend record date is 21 August 2020 and it will be paid to the shareholders on 11 November 2020.

 

On 11 August 2020, the Board approved a programme to buy back an amount of up to $67.3 million of the Company's Ordinary Shares.

 

 

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
IR DBGDIDDBDGGG
Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account.