Plus500 increased first-half revenue by 12% to $462.9m as customer income reached a five-year high, while the trading-platform group announced a further $182.5m of dividends and share buybacks.
Customer income rose 24% year on year to $460.8m during the six months to 30 June, the strongest first-half figure for five years. Trading income increased 15% to $441.8m, while total revenue reached its highest level for a six-month period in three years.
EBITDA increased more slowly, rising 1% to $187.5m from $185.1m a year earlier. The EBITDA margin consequently fell from 45% to 41%.
Plus500 attributed the margin movement to higher customer-acquisition expenditure, growing revenue-linked costs within the US operation, and a foreign-exchange headwind from the stronger Israeli shekel.
Basic earnings per share rose 6% to $2.17. Active customer numbers increased to 197,294 from 179,931, while new customers rose to 65,723 from 56,165. Total customer deposits reached $3.4bn, up from $3.1bn a year earlier.
The figures show stronger customer activity running ahead of profit growth. That distinction is significant for a group investing in expansion while continuing to return substantial amounts of capital to shareholders.
Plus500 has increasingly been developing activities beyond its traditional over-the-counter trading products. Revenue from non-OTC operations grew by around 30% in the first half and accounted for approximately 15% of group revenue, compared with about 13% in the equivalent period last year.
That expansion includes US futures and prediction-market activities. The diversification gives the company additional sources of revenue outside its established OTC operation and increases its exposure to regulated exchange-based markets in the United States.
The group ended the period with cash and cash equivalents of about $861m and continues to operate without debt. Its latest shareholder-return package comprises $100m of share buybacks and $82.5m of dividends.
That takes total returns announced since the company’s 2013 flotation to around $3.1bn. The scale of those distributions remains a defining feature of the group’s capital allocation.
A cash-generative trading business can accumulate substantial liquidity when customer activity and market conditions are favourable, leaving management to choose between retaining capital, investing in expansion, making acquisitions, or returning money to shareholders.
Plus500 is combining investment and distributions. Customer-acquisition spending and US expansion increased during the half, while buybacks and dividends continued. The lower EBITDA margin shows the near-term cost of that strategy even as revenue and customer income improved.
The composition of revenue is also changing. Interest income has become a smaller contributor as interest-rate conditions have shifted, while trading income increased. That reduces the extent to which earnings depend on returns generated from cash balances and places greater weight on customer trading activity.
The US business also brings different economics from the company’s core OTC products. Exchange-based futures activities involve additional clearing, infrastructure, and transaction-linked costs, which can increase the expense base as volumes grow.
Plus500 is therefore accepting some margin pressure while attempting to build a broader operating platform. Whether that trade-off improves long-term earnings will depend on the rate at which newer activities reach sufficient scale.
The balance will remain important during the second half. Strong customer engagement can lift revenue quickly, but trading businesses are exposed to changes in market volatility, acquisition costs, customer behaviour, and regulatory conditions.
The group’s cash position provides capacity to continue investing without taking on debt. At the same time, its established pattern of dividends and buybacks means shareholders are likely to continue assessing expansion against the returns that could otherwise be distributed.
The first-half figures show revenue growth materially ahead of EBITDA growth, but also demonstrate higher customer numbers and stronger income from the core business. Basic earnings per share still increased despite the margin reduction, helped in part by the continuing effect of repurchases on the number of shares outstanding.
Plus500 enters the second half with higher customer income, a growing non-OTC operation, and further capital returns already committed. The next measure of the strategy will be whether investment in the US and customer acquisition can translate into faster profit growth without requiring a prolonged reduction in margins.
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