Plus500 Initiates $60M Share Repurchase

Plus500 Initiates $60M Share Repurchase

After initiating a $70 million share buyback program earlier in the year, publicly-listed London broker Plus500 (LSE: PLUS) has unveiled a new repurchase initiative valued at $60 million. The decision to begin this second phase is attributed to the impending completion of the first buyback agenda.

Emphasizing its robust financial standing, Plus500 asserts that the latest buyback program underscores its financial strength. The program allows for the repurchase of a maximum of 8,032,980 shares, adhering to permissions granted during the general meeting held on July 24, 2023.

Liberum Capital Limited will oversee the execution within defined parameters, independent of the company or its board members. The repurchased shares will be categorized as treasury (dormant) shares, not eligible for dividends or voting rights at general meetings.

This buyback initiative will remain active until the preliminary results for the year ending December 31, 2023, are disclosed, even during the company’s closed periods.

In its official statement, Plus500 expresses, “This Share Buyback Program further emphasizes the Board’s ongoing confidence in the prospects of Plus500, reflecting the Group’s strong financial position and ability to deliver impressive future shareholder returns.” The company cites its operational and financial momentum achieved over recent years.

This marks the second asset buyback program by the broker in 2023. The first was announced in February as a continuation of the previous share buyback phase, part of a broader plan to distribute $100 million among investors.

After reaching record levels early in 2023, Plus500’s share price declined by nearly 30% from February to August, currently priced at 1400 pence from the 2000 pence peak. However, shares rebounded from 14-month lows in June.

The decrease in share value can be attributed, in part, to the broker’s declining revenue performance, influenced by reduced consumer and retail investor activity in the markets during H1 2023.

The Rise In Returns

Last week, Plus500 disclosed its interim results for H1 2023, showcasing mixed performance. Despite improvement compared to the previous six months, the results indicated a 28% year-on-year revenue decline.

The London-headquartered fintech firm reported first-half revenues of $368 million, down $142 million from the previous year’s $511 million. Trading contributed $346 million to this, with $22 million from interest income.

In H1 2023, Plus500’s customer turnovers were $42 million, a sharp decline from the prior year’s $172 million, signifying reduced customer engagement and investment interest.