REG - Plus500 Ltd - FY 2023 Preliminary Results
20/02/2024 07:15
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RNS Number : 7484D Plus500 Limited 20 February 2024
20 February
2024
Plus500 Ltd.
("Plus500", the "Company" or together with its subsidiaries the "Group")
Preliminary Results for the year ended 31 December 2023
FY 2023 results significantly ahead of market expectations
Significant additional shareholder returns of $175m announced today
Plus500, a global multi-asset fintech group operating proprietary
technology-based trading platforms, today announces its preliminary unaudited
results for the year ended 31 December 2023.
David Zruia, Chief Executive Officer of Plus500, commented:
"Three years ago, Plus500 presented its new strategic plan to become a global,
multi-asset fintech group, by expanding into new markets, developing new
products and deepening relationships with customers.
2023 saw further progress against all three strategic objectives: we expanded
our US futures businesses, launched a new retail FX OTC trading platform in
Japan and extended our portfolio of global regulatory licences to 13. We
expanded our core product offering to include a share dealing platform, and a
new line of business offering futures and options on futures. Our efforts to
deepen customer relationships were enhanced by our market-leading technology,
and we now have over 26 million customers registered on our platforms. During
the period, we achieved a record high average deposit per active customer
reflecting our on-going focus on higher value customers and the intuitive
nature and reliability of our market-leading technology.
All of this strategic progress has led to our FY 2023 results being
significantly ahead of market expectations and today we are pleased to
announce additional shareholder returns of $175.0m, comprising $100.0m in new
share buyback programmes and $75.0m of dividends."
Financial highlights
H2 2023* H2 2022* Change % FY 2023* FY 2022 Change %
Revenue $357.7m $321.2m 11% $726.2m $832.6m (13%)
EBITDA 1 (#_ftn1) $166.4m $148.5m 12% $340.5m $453.8m (25%)
EBITDA Margin % 47% 46% 2% 47% 55% (15%)
Cash balance at period end $906.7m $930.2m (3%) $906.7m $930.2m (3%)
*Unaudited
Robust financial performance enabled by Plus500's strong market position
· Group revenue was $726.2m, comprising trading income of $674.3m and
interest income of $51.9m
· EBITDA was $340.5m, with an EBITDA margin of 47%
· Basic Earnings Per Share (EPS) was $3.17
· 70% of the Group's costs were variable in nature (FY 2022: 70%)
providing it with a significant competitive advantage, and highlighting
Plus500's lean and flexible business model
· The Company's balance sheet remained extremely strong with cash
balances of $906.7m as at 31 December 2023 with no loans or debt
Significant shareholder returns of $175.0m announced today
· New shareholder returns of $175.0m announced today, in line with
the Group's clear and disciplined capital allocation framework, reflecting its
enduring financial strength and the Company's Board of Directors (the "Board")
continued confidence in its prospects
· These shareholder returns comprise new share buyback programmes of
$100.0m, as well as total dividends of $75.0m
· During FY 2023, Plus500 announced approximately $350m of total
shareholder returns, comprising share buyback programmes of $257.5m,
including $127.5m through the repurchase of shares executed on 13 June
2023, and total dividends of $90.0m
· Since the commencement of Plus500's initial share buyback programme
in 2017 and up to 31 December 2023, the Company has purchased 36,651,165
ordinary shares, amounting to a total of $0.6bn, excluding the amount
announced today, at an average share price of £13.52
Operational highlights
H2 2023 H2 2022 Change % FY 2023 FY 2022 Change %
New Customers 2 (#_ftn2) 40,495 49,274 (18%) 90,944 106,549 (15%)
Active Customers 3 (#_ftn3) 158,846 177,946 (11%) 233,037 280,769 (17%)
AUAC 4 (#_ftn4) $1,487 $1,527 (3%) $1,489 $1,481 1%
ARPU 5 (#_ftn5) $2,252 $1,805 25% $3,116 $2,966 5%
Strategic progress in new markets
· Strong progress made in the US futures market, as evidenced by the
increase in new customers in both B2B (Institutional) and B2C (Retail)
businesses, as well as through additional memberships being secured with the
Futures Industry Association (FIA) and Eurex
· In Japan, the Group launched a localised trading platform for
retail traders which is gaining good traction
· During 2023, Plus500 added two new licences, in the UAE and the
Bahamas, bringing the global portfolio of regulatory licences to 13
New products and technology underpinning the Group's growth
· Launched 'Plus500 Futures', a new proprietary trading platform
designed for the US retail market to trade in futures, bringing innovative
trading solutions to the futures market
· Plus500 rolled out AI and big data models to develop new retention
technologies supported by enhanced customer engagement methodologies
Significant resources committed to improving customer retention
· Significant customer progress was demonstrated during FY 2023 with
a record ARPU achieved of $3,116 (FY 2022: $2,966)
· Customer deposits increased to $2.4 billion (FY 2022: $2.3
billion), with the average deposit per Active Customer growing to a record
high of approximately $10,300 (FY 2022: approximately $8,000)
· In FY 2023, over 87% of the Group's OTC revenue was generated from
customers trading on mobile or tablet devices (FY 2022: over 85%). This
highlights Plus500's industry leadership when it comes to mobile-first
services and its relentless focus on innovation
Outlook
· Given Plus500's significant strategic, operational, and financial
progress over recent years, and the Group's robust financial position, the
Board remains confident about the Group's future prospects
For further details
Plus500 Ltd.
Elad Even-Chen, Chief Financial Officer +972 4 8189503
Owen Jones, Head of Investor Relations +44 (0) 7551 654208
ir@Plus500.com (mailto:ir@Plus500.com)
Dentons Global Advisors
James Melville-Ross +44 (0)20 7664 5095
James Styles Plus500@dentonsglobaladvisors.com (mailto:Plus500@dentonsglobaladvisors.com)
Methuselah Tanyanyiwa
Investor and analyst audiocast
Plus500 will host an audiocast for investors and analysts at 9.00 a.m. UK time
today, which can be accessed via the following link:
https://www.investis-live.com/plus500/65ba5db777117a0c005e4656/rtjwzz
(https://www.investis-live.com/plus500/65ba5db777117a0c005e4656/rtjwzz) . The
audiocast can also be accessed by dialling +44 20 3 936 2999 and using the
following access code: 725869. The presentation materials and a recording of
the audiocast will be available at
https://investors.plus500.com/Reports/Presentation
(https://investors.plus500.com/Reports/Presentation) .
About Plus500
Plus500 is a global multi-asset fintech group operating proprietary
technology-based trading platforms. Plus500 offers customers a range of
trading products, including OTC ("Over-the-Counter" products, namely Contracts
for Difference (CFDs)), share dealing, as well as futures and options on
futures.
The Group retains operating licences and is regulated in the United Kingdom,
Australia, Cyprus, Israel, New Zealand, South Africa, Singapore, the
Seychelles, the United States, Estonia, Japan, the UAE and the Bahamas and
through its OTC product portfolio, offers more than 2,500 different underlying
global financial instruments, comprising equities, indices, commodities,
options, ETFs, foreign exchange and cryptocurrencies. Customers of the Group
can trade its OTC products in more than 60 countries and in 30 languages.
Plus500's trading platforms are accessible from multiple operating systems
(iOS, Android and Windows) and web browsers. Customer care is, and has always
been, integral to Plus500. As such, OTC customers cannot be subject to
negative balances. A free demo account is available on an unlimited basis for
OTC trading 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 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 (http://www.plus500.com) .
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.
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 Group'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", "project",
"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 Management Framework section of the Company's most
recent Annual Report. These forward-looking statements are based on numerous
assumptions regarding the present and future business strategies of the Group
and the environment in which it is and 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 FY 2023
Introduction
Three years ago, Plus500 formulated its new strategic roadmap to become a
global, multi-asset fintech group supported by its proprietary technology and
robust financial position. The strategic roadmap included targets to expand
into new markets, develop new products (including non-OTC products), services
and features, and to deepen relationships with its customers. Since then,
Plus500 has evolved from being a technology company with a leading OTC
proprietary offering, to a diversified, multi-asset global business, offering
a wide range of technologies which provides access to various financial
trading products and services in the futures and options on futures markets,
as well as the Group's share dealing platform.
The Group also continued to enhance its existing OTC offering by harnessing
its market-leading technology and expertise in AI and big data models to
improve its customer retention efforts.
After more than a decade as a highly successful publicly listed company on the
London Stock Exchange, Plus500 has responsibly extended its footprint through
a number of bolt-on acquisitions, deploying capital to acquire businesses in
the US futures market and in the Japanese retail OTC market, providing the
Group with an established position in these strategic, high-growth regions.
In the US, Plus500's B2B (Institutional) business experienced significant
growth across FY 2023 and 'Plus500 Futures', its retail trading platform,
which was launched in 2023, has experienced good levels of traction with
retail traders. The speed with which both the B2B (Institutional) and B2C
(Retail) businesses have developed reflects the innovative and agile nature of
the Group's operational and technological capabilities. In addition, the Group
has developed enhanced trading platforms based on new technological solutions
for these businesses and provides optimised service support, risk management
and other solutions.
In Japan, the Group has developed an OTC FX localised proprietary trading
platform for retail traders, which went live in September 2023 and is
progressing well.
Focus on higher value customers and customer retention is providing attractive
returns to stakeholders
The Group now has more than 26 million customers registered on its platforms
globally, reflecting its continued focus on higher value customers and the
strengths of its intuitive trading platforms.
Customer deposits in FY 2023 stood at $2.4 billion and the average deposit per
Active Customer rose to a record high of approximately $10,300 versus
approximately $8,000 a year earlier. This progress demonstrates the successful
nature of the Group's strategic decision to focus on attracting and retaining
higher value customers, as well as the intuitive nature and reliability of its
market-leading technology.
Good progress made in the US futures market in both B2B (Institutional) and
B2C (Retail) businesses
The opportunities available to Plus500 in the US futures market are
substantial and the Group is focused on delivering real value to shareholders
through its expansion efforts in this market. The US futures market is
sizeable and Plus500's technology-driven value proposition is unlocking a
material, multi-year earnings opportunity through new and growing lines of
business, spanning both B2B (Institutional) and B2C (Retail) channels.
In an industry that has undergone little technological change in recent years,
the Group has developed additional technological capabilities for
institutional customers and launched a unique trading platform for retail
customers. Plus500 now operates in the futures market at a structural
advantage thanks to its high-quality technology, enabling superior customer
service, attractive commercial terms and other innovative operational
capabilities new to this market.
The Group's US futures business performed well during FY 2023, growing revenue
and customer numbers year-on-year. The Group is focused on continuing this
positive momentum in the US and will launch new technologies to support its
already enhanced customer offerings to drive revenue and profit growth.
New memberships secured from Eurex Clearing AG (Eurex) and the Futures
Industry Association (FIA)
The Group is now a provider of market infrastructure services, including
brokerage-execution and clearing services for institutional customers in the
US futures market. During 2023, the business worked to increase the number of
clearing memberships it possesses with other international clearing houses and
will continue to do so.
Since the acquisitions of Cunningham Commodities, a regulated Futures
Commission Merchant (FCM) and Cunningham Trading Systems, a technology trading
platform provider, the Group has secured full clearing memberships with the
CME Group exchanges, as well as with the Minneapolis Grain Exchange (MGEX).
In addition, the Group has recently secured a clearing membership of Eurex
Clearing AG, the clearing house for the entire suite of products traded at
Eurex Exchange, the leading European derivatives exchange and one of the
largest futures and options markets globally. This significant milestone
followed the recent receipt of a primary membership of the Futures Industry
Association (FIA), the leading global trade organisation for futures, options
and centrally cleared derivatives markets.
Obtaining further clearing memberships will enable Plus500 to expand its
network and customer services further and, subsequently, drive revenue growth.
US B2B (Institutional) Opportunity
Good progress was made during the year in increasing the number of onboarded
Introducing Brokers ("IBs") and institutional clients, and efforts to onboard
further IBs will continue during 2024. Additionally, new technologies
dedicated to the needs of the B2B (Institutional) line of business are
expected to be launched later this year.
US B2C (Retail) Opportunity
The launch of 'Plus500 Futures' during the period marked a significant
strategic step for the Group in the US futures retail market, a market with
compelling long-term growth characteristics. Plus500 is proud to offer an omni
set solution enabling customers to be onboarded, deposit and trade with a
seamless and unified experience across all elements of the customer journey.
This significant milestone was enabled by Plus500's technological expertise
and innovative approach. 'Plus500 Futures' is live and already benefitting
from the full support of Plus500's sophisticated proprietary marketing
technology, as well as other offline marketing initiatives such as the Chicago
Bulls sponsorship. In 2024, the Group will continue to invest and support the
'Plus500 Futures' platform by expanding its product offering with new
innovative features.
Plus500's proprietary platform in Japan went live and is gaining good traction
Launched in September 2023, Plus500's localised trading platform catering to
the Japanese retail market, one of the largest retail investor markets
globally, is gaining good traction. The platform's initial offering includes
approximately 50 FX OTC pairings, and the Group aims to enhance its local
product range with additional asset classes and new trading products. The
Group recognises the significance of available opportunities within the
Japanese market and will continue to allocate its financial and technological
resources in order to maximise this opportunity.
Global portfolio of regulatory licences increased to 13
In 2023, Plus500 obtained two new regulatory licences, in the UAE and the
Bahamas, which together take the Group's global portfolio of regulatory
licences to 13. This global portfolio provides a significant source of
competitive advantage and inherent value for Plus500, both in a monetary and
operational sense.
The UAE represents a significant and growing market for the Group and its
business in this region is fully operational and developing quickly. The
Group's customer base in the UAE is growing and Plus500's localised offering
is benefitting from a greater understanding of this particular market. The
Group will continue to develop its localised offering tailored for the UAE
market.
Building on its success of securing new regulatory licences, the Group will
continue to target new regulatory licences globally, in 2024 and beyond, to
support its strategic objective of entering new markets and offering new
products. The Group's experience in obtaining new regulatory licences leaves
it extremely well positioned to execute successfully against this objective.
Plus500 remains committed to sustainability and inclusive access to financial
trading products
Plus500's objective is to provide trusted and intuitive access to financial
products. It seeks to achieve this by offering a broad range of financial
products, aligning its global scale with locally tailored offering, all of
which are powered by a best-in-class proprietary technology stack.
Enabling customers to access the financial markets through the Group's
intuitive, secure and user-friendly platforms forms a core part of Plus500's
purpose-led mission, as is the Group's focus on customer care and best in
class service. The Group has greatly enhanced its educational content
available to its customers, including the launch of an innovative Trading
Academy portal and '+Insights', a big-data, analytical tool designed to
provide access to real time and historical trends, based on the Group's
registered customer base. Plus500 also provides customers with greater
technological solutions which enable more established customer experience and
retention benefits.
Operational and trading overview
In terms of operational performance during FY 2023, the Group delivered a
strong performance in its key metrics despite lower trading volumes in the
global financial markets, supported by its on-going focus on attracting and
retaining higher value customers.
Customer retention has improved in recent years, with 88% of FY 2023 OTC
revenue being derived from customers trading with Plus500 for more than a year
(FY 2022: 87%), 59% from customers trading for more than three years (FY 2022:
40%) and 29% for more than five years (FY 2022: 24%), highlighting the
increasing loyalty of its customers and their confidence in the Plus500
trading platforms. In addition, over 87% of OTC revenue was generated through
mobile or tablet devices (FY 2022: over 85%), highlighting the strength of the
Group's mobile offerings.
ARPU reached a record annual level of $3,116 in FY 2023 (FY 2022: $2,966),
which highlights the depth of the Group's product offering and the quality of
its intuitive trading platforms.
In addition, customer deposits continued to grow, with the average deposit per
Active Customer also reaching a record annual level of approximately $10,300
(FY 2022: approximately $8,000), highlighting the continued strong level of
confidence that customers have in Plus500 and the resilience of the Group's
trading platforms. Total customer deposits in FY 2023 increased to $2.4
billion (FY 2022: $2.3 billion).
With continued investment in strategic markets to attract higher value
customers for the long term, AUAC was $1,489 in FY 2023 (FY 2022: $1,481). The
Group continues to expect that AUAC will rise steadily over time, as the
Group's customer profile further shifts to higher value, long term customers
and as the Group invests in attracting customers to the new trading products
in its portfolio and targeting additional high value customers in strategic
geographies.
The Group onboarded a total of 90,944 New Customers during the year (FY 2022:
106,549). This was underpinned by the continued investment in the Group's
diversified marketing approach, which included its sophisticated proprietary
marketing technology and a range of strategic initiatives and advertising
campaigns.
The number of Active Customers during FY 2023 remained robust at 233,037 (FY
2022: 280,769) thanks to the Group's customer retention, monetisation and
activation technological capabilities.
Financial Overview
Plus500 delivered another strong financial performance in FY 2023, during
which it continued to execute against its strategic objectives whilst
generating significant cash flows and attractive returns for shareholders.
Revenue in FY 2023 was $726.2m (FY 2022: $832.6m), comprising trading income
of $674.3m and interest income of $51.9m. EBITDA for FY 2023 was $340.5m (FY
2022: $453.8m) with an EBITDA margin of 47% (FY 2022: 55%). This robust
performance in FY 2023 was achieved despite lower levels of trading activity
seen across the global financial markets during the year. Against this
challenging macro-economic environment, Plus500 was still able to report on
financial results for FY 2023 ahead of market expectations 6 (#_ftn6) .
Customer Income 7 (#_ftn7) was $600.1m during FY 2023 (FY 2022: $639.6m) and
Customer Trading Performance 8 (#_ftn8) was $74.2m (FY 2022: $193.0m). The
Group expects that the contribution from Customer Trading Performance will be
broadly neutral over time.
Net profit in FY 2023 was $271.4m (FY 2022: $370.4m) and basic earnings per
share was $3.17 (FY 2022: $3.81).
For FY 2023, 70% of the Group's costs were variable in nature (FY 2022: 70%)
providing it with a significant competitive advantage, and highlighting
Plus500's lean and flexible business model. Such a business model provides the
Group with a greater level of flexibility and agility to respond quickly to a
range of possible market conditions and, where applicable, regulatory changes.
Total SG&A expenses were $389.8m during FY 2023 (FY 2022: $382.2m). The
main elements were marketing technological investments of $135.4m (FY 2022:
$157.8m), payment processing costs of $40.0m (FY 2022: $44.9m), employee
benefits and other related expenses of $94.3m (FY 2022: $80.9m) and
commissions and fees of $31.2m (FY 2022: $17.0m).
Net financial expenses (income) were $0.2m in FY 2023 (FY 2022: ($23.9m)),
driven by FX gains and losses as the Group manages its exposure to a range of
operating currencies versus the US dollar. A substantial portion of the
Group's cash is held in US dollars in order to reduce the impact of currency
movements on financial expenses over time.
As of 31 December 2023, total assets on the Group's balance sheet were
$1,004.7m (FY 2022: $1,010.0m), with equity of $699.8m, representing
approximately 70% of the balance sheet.
The Group has remained debt-free since inception, and had a cash and cash
equivalents balance at the end of FY 2023 of $906.7m (FY 2022: $930.2m). This
robust financial position is supported on an on-going basis by the Group's
technology-enabled business model and lean cost base which allow the Group to
invest in its people and its capabilities with a focus on medium to long-term
returns.
Plus500 continues to generate significant returns for shareholders
Since the Company's IPO in 2013, Plus500 has continued to deliver attractive
returns of capital to shareholders of approximately $2.1 billion through
dividends and share buybacks (including returns announced today), having
generated significant levels of cash from operations of approximately $3.2
billion in that timeframe.
Plus500's shareholder returns policy and the Board's capital allocation
framework
The Company's shareholder returns policy is to return at least 50% of net
profits to shareholders through share buyback programmes and dividends, on a
half yearly basis, with at least 50% of this distribution being made by way of
share buybacks. The Board will also consider executing special share buybacks,
or other distributions, on a half yearly basis, dependent on fiscal year
results as well as on investment and growth opportunities. This shareholder
returns policy applies to net profits on a half-yearly basis and is based on a
23% corporate tax rate, for both interim and final distributions.
The Board has a clear capital allocation framework, based on an on-going
assessment of the availability of excess capital going forward, to ensure
there continues to be an optimal balance between shareholder returns,
investments in future growth and in driving business continuity over the long
term. In particular, and aligned to this framework, the Board will continue to
ensure that appropriate levels of available capital are maintained for
required working capital and other factors to drive future growth.
Shareholder returns announced in FY 2023
The Company returned $365.1m to shareholders in FY 2023, which included
$275.3m of share buybacks and $89.8m in dividends.
Plus500 is announcing today additional shareholder returns of $175.0m,
comprising of share buyback programmes of $100.0m and total dividends of
$75.0m. The $100.0m share buyback programme, include a final buyback programme
of $31.0m and a special buyback programme of $69.0m. These programmes will
commence following the completion of the current share buyback programme of
$60.0m, which was announced on 14 August 2023.
The $75.0m of additional dividends include a final dividend of $31.0m,
representing $0.3911 per share, and a special dividend of $44.0m, representing
$0.5551 per share, equating to a total dividend per share of $0.9462. The
final and special dividends have an ex-dividend date of 29 February 2024, with
a record date of 1 March 2024, and a payment date of 11 July 2024. These new
shareholder returns further emphasise the Board's continued confidence in the
prospects for Plus500 and reflect the robust financial position of the Group.
Total dividends paid during 2023 amounted to $89.8m, representing $1.0578 per
share.
At 31 December 2023, the Company held in treasury a total of 35,170,337
ordinary shares, which were purchased since the commencement of Plus500's
initial share buyback programmes in 2017, representing approximately 31% of
the Company's issued share capital (the total treasury shares held by the
Company comprise the shares purchased less issued treasury shares).
Outlook
Based on Plus500's significant strategic, operational and financial progress
over recent years, and the Group's robust financial position, the Board
remains confident about the Group's future prospects.
Plus500's strategic roadmap is designed to position the Group for key growth
opportunities, including new products, services and markets, the expansion of
its OTC, futures and share dealing offerings and the deepening of its customer
engagement and retention initiatives. These growth opportunities will be
accessed by the Group's on-going investment in developing its position as a
global multi-asset fintech group, in particular through further organic
investments in technology, marketing and people, as well as by actively
targeting additional bolt-on acquisitions in selected markets and geographies.
For FY 2024, the Board expects Plus500's performance to be in-line with
current market expectations 9 (#_ftn9) driven by the strength of its market
position, deepening relationship with customers and successful diversification
efforts in the US, Japan and UAE markets.
Over the medium-term, the Group is well placed to take advantage of the
compelling growth opportunities in its end markets. Thanks to its proven
business model, strong financial position and disciplined approach to capital
allocation, the Group is focused on driving the sustainability of its revenues
as it develops and invests in its position as a provider of market-leading B2C
(Retail) and B2B (Institutional) infrastructure services in the US futures
market.
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Year ended
31 December
2023 2022
Note U.S. dollars in millions
Trading income 674.3 832.6
Interest income 2c 51.9 -
REVENUE 726.2 832.6
Selling and marketing expenses 296.9 302.1
Administrative and general expenses 92.9 80.1
OPERATING PROFIT 336.4 450.4
Financial income 6.9 41.3
Financial expenses 7.1 17.4
FINANCIAL EXPENSES (INCOME), NET 0.2 (23.9)
PROFIT BEFORE INCOME TAX 336.2 474.3
INCOME TAX EXPENSE 64.8 103.9
PROFIT AND COMPREHENSIVE INCOME FOR THE YEAR 271.4 370.4
Basic earnings per share (In US dollars) 6 3.17 3.81
Diluted earnings per share (In US dollars) 6 3.12 3.77
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
As of 31 December
2023 2022
Note U.S. dollars in millions
ASSETS
Non-current assets
Property, plant and equipment 9.7 2.6
Goodwill and other intangible assets, net 38.3 38.7
Right of use assets 17.1 5.6
Long term other receivables 7.5 5.8
Total non-current assets 72.6 52.7
Current assets
Income tax receivable 1.0 0.2
Other receivables and others 24.4 26.9
Cash and cash equivalents 906.7 930.2
Total current assets 932.1 957.3
TOTAL ASSETS 1,004.7 1,010.0
LIABILITIES
Non-current liabilities
Lease liabilities (net of current maturities) 15.8 3.6
Deferred tax liability 6.9 6.9
Total non-current liabilities 22.7 10.5
Current liabilities
Share based compensation 3.9 6.3
Income tax payable 142.2 116.4
Other payables 90.7 72.2
Service suppliers 12.6 11.7
Current maturities of lease liabilities 2.6 2.0
Trade payables - due to clients 7 30.2 10.4
Total current liabilities 282.2 219.0
TOTAL LIABILITIES 304.9 229.5
EQUITY
Ordinary shares 4 0.3 0.3
Share premium 22.2 22.2
Cost of Company's shares held by the Company (606.5) (341.1)
Retained earnings 1,283.8 1,099.1
Total equity 699.8 780.5
TOTAL LIABILITIES AND EQUITY 1,004.7 1,010.0
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (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 2022 0.3 22.2 (207.5) 846.3 661.3
CHANGES DURING THE YEAR ENDED 31 DECEMBER 2022
Profit and comprehensive income for the year - - - 370.4 370.4
Share based compensation - - - 7.5 7.5
TRANSACTION WITH SHAREHOLDERS:
Dividend - - - (119.9) (119.9)
Issue of treasury shares to settle equity share based compensation - - 5.2 (5.2) -
Acquisition of treasury shares - - (138.8) - (138.8)
BALANCE AT 31 DECEMBER 2022 0.3 22.2 (341.1) 1,099.1 780.5
CHANGES DURING THE YEAR ENDED 31 DECEMBER 2023
Profit and comprehensive income for the year - - - 271.4 271.4
Share based compensation - - - 13.0 13.0
TRANSACTION WITH SHAREHOLDERS:
Dividend - - - (89.8) (89.8)
Issue of treasury shares to settle equity share based compensation - - 9.9 (9.9) -
Acquisition of treasury shares - - (275.3) - (275.3)
BALANCE AT 31 DECEMBER 2023 0.3 22.2 (606.5) 1,283.8 699.8
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Year ended
31 December
2023 2022
U.S. dollars in millions
OPERATING ACTIVITIES:
Cash generated from operations (see Note 8) 336.6 506.8
Income tax paid, net (39.6) (66.2)
Interest received 51.9 13.5
Net cash flows provided by operating activities 348.9 454.1
INVESTING ACTIVITIES:
Acquisition of subsidiaries, net of cash acquired - (4.6)
Purchase of property, plant and equipment (8.2) (0.8)
Net cash flows used in investing activities (8.2) (5.4)
FINANCING ACTIVITIES:
Dividend paid to equity holders of the Company (89.8) (119.9)
Payment of principal in respect of lease liabilities (2.7) (2.3)
Acquisition of treasury shares (275.3) (138.8)
Net cash flows used in financing activities (367.8) (261.0)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (27.1) 187.7
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 930.2 749.5
Gains (Losses) from effects of exchange rate changes on cash and cash 3.6 (7.0)
equivalents
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR 906.7 930.2
NOTE 1 - GENERAL INFORMATION
Information on activities
Plus500 Ltd. (the "Company" and together with its subsidiaries, the "Group")
is a global multi-asset fintech group operating proprietary technology-based
trading platforms. Plus500 offers customers a range of trading products,
including OTC ("Over-the-Counter" products, namely Contracts for Difference
(CFDs)), share dealing, as well as futures and options on futures. The Company
has developed and operates online trading platforms, enabling its
international customer base of individual customers to trade OTC products on
over 2,500 underlying financial instruments internationally.
The Group's offering is available internationally with main market presence in
the UK, the European Economic Area ("EEA"), Australia, the US, and the Middle
East and has customers located in more than 60 countries worldwide. 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, the Financial Services Authority ("FSA") in
the Seychelles, the Commodities Futures Trading Commission ("CFTC") in the US,
the Estonian Financial Supervision Authority ("EFSA") in Estonia, the
Financial Services Agency ("FSA") in Japan, the Dubai Financial Services
Authority ("DFSA") in the UAE and the Securities Commission of the Bahamas
("SCB") in the Bahamas.
The Company also has a subsidiary in Bulgaria which provides operational
services to the Group.
The Company has been listed since 2013 on the London Stock Exchange. Since
2018, Plus500 Ltd. has been a FTSE 250 listed entity, following the Company's
shares being admitted to the premium listing segment of the Official List and
to trading on the London Stock Exchange Main Market for listed securities.
The Group offers trading products: OTC trading; share dealing; and futures and
options on futures. The Group presents its operation as one operating segment.
NOTE 2 - SUMMARY OF MATERIAL ACCOUNTING POLICIES
a. Basis of accounting and accounting policies
The Group's condensed consolidated financial information as of 31 December
2023 and 2022 and for each of the two years in the periods ended on 31
December 2023 are prepared in accordance with International Financial
Reporting Standards ("IFRS").
The material accounting policies in this financial information have been
applied consistently in relation to all the reporting periods, unless
otherwise stated.
The financial information has been prepared under the historical cost
convention, subject to adjustments in respect of revaluation of financial
assets at fair value through profit or loss presented at fair value.
b. Going concern
The Group has considerable financial resources, a broad range of financial
instruments and a substantial active customer base which is geographically
diversified. As a consequence, the Company's Board of Directors (the "Board")
believes that the Group is well placed to manage its business risks in the
context of the current economic outlook. Accordingly, the Board has a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. The Board therefore
continues to adopt the going concern basis in preparing these condensed
consolidated financial statements.
NOTE 2 - SUMMARY OF MATERIAL ACCOUNTING POLICIES
c. Interest income
During the year ended 31 December 2023, management has updated the accounting
policy regarding the presentation of interest income. Accordingly, interest
income is accrued based on the effective interest rate method, and is
presented as part of the Group's revenue in the statement of comprehensive
income. Previously, interest income was presented as part of financial income
in the statement of comprehensive income. The voluntary change in accounting
policy is intended to provide shareholders with better expression of its
business activities and to enhance the comparability of its financial
statements to its peers. The effect of this change on the consolidated
financial statements in previous periods is not material for the consolidated
financial statements as a whole.
NOTE 3 - 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 1 January
2017 (the "2017
Amendment")
The 2017 Amendment was enacted as part of the Economic Efficiency Law that was
published on 29 December 2016, and is effective as of 1 January 2017. The 2017
Amendment provides new tax benefits, as described below, and is in addition to
the other existing tax beneficial programmes under the Investment Law.
The 2017 Amendment provides that a technology company satisfying certain
conditions will qualify as a Preferred Technological Enterprise ("PTE") 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 PTE, 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.
Company taxation in Israel
The full corporate tax rate in Israel for the years 2023 and 2022 is 23%.
Under 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), would be subject
to reduced corporate tax rates of 12%.
A Preferred Company distributing dividends from technological income derived
from its PTE would generally subject the recipient to a 20% withholding tax
(or lower, if so provided under an applicable tax treaty).
At the beginning of July 2020, the Company received an approval from the
Israeli Innovation Authority ("IIA") that together with the tax ruling
received from the ITA in May 2019, recognises the Company as a PTE for the
years 2017, 2018 and 2019. Accordingly, the applicable tax rate for the
preferred technological income of a PTE for these years was 12%. The Company
was also considered as PTE for the years 2020 and 2021. As a result, the
Company's corporate tax rate for the years 2021 and 2020 was 12%, subject to
the Company complying with the conditions of the Law for the Encouragement of
Capital Investments.
In January 2022, the Company's status as a PTE, as accredited by the ITA under
the tax regime in Israel, has been extended for the years 2022, 2023, 2024,
2025 and 2026, subject to the Company complying with the conditions of the Law
for the Encouragement of Capital Investments. Consequently, the Company's
corporate tax rate for each of these years will be reduced from 23% to 12% and
the withholding tax rate applicable for dividends will be reduced from 25% to
20%.
NOTE 3 - INCOME TAX EXPENSES
Tax assessments
The Company is currently subject to a tax audit in relation to 2020-2022 tax
years. The assessments of amounts of current and deferred taxes require the
Group's management to take into consideration uncertainties that its tax
position will be accepted and of incurring any additional tax expenses. This
assessment is based on estimates and assumptions based on interpretation of
tax laws and regulations, and the Group's past experience. It is possible that
new information will become known in future periods that will cause the final
tax outcome to be different from the amounts that were initially recorded,
such differences will impact the current and deferred income tax assets and
liabilities in the period in which such determination is made.
NOTE 4 - SHARE CAPITAL
Composed of ordinary shares of NIS 0.01 par value, as follows:
Number of ordinary shares
As of 31 December
2023 2022
Authorised 300,000,000 300,000,000
Issued and fully paid 114,888,377 114,888,377
Less treasury shares* (35,170,337) (21,112,648)
Outstanding shares 79,718,040 93,775,729
*Number of accumulated ordinary shares that were purchased by the Company as
part of the share buyback programmes, less issue of treasury shares.
NOTE 5 - DIVIDENDS
The amounts of dividends and the amounts of dividends per share for the years
2023 and 2022 declared and distributed by the Company's Board of Directors
are as follows:
Date of declaration Amount of dividend Amount of dividend Date of payment to shareholders
(US $ in millions)* per share (US $)
15 February 2022 59.9 0.5995 11 July 2022
17 August 2022 60.0 0.6238 11 November 2022
14 February 2023 29.9 0.3234 11 July 2023
14 August 2023 59.9 0.7344 9 November 2023
*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 treasury
shares that are not entitled to dividends. However, this did not affect the
dividend per share as announced on the dividend announcement date.
NOTE 6 - 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.
Year ended 31 December
2023 2022
Profit attributable to equity holders of the
Company (US dollars in millions) 271.4 370.4
Weighted average number of ordinary shares in issue*:
Basic 85,744,552 97,311,485
Dilutive effect of equity share based compensation 1,139,574 943,047
Diluted 86,884,126 98,254,532
Basic earnings per share (In US dollars) 3.17 3.81
Diluted earnings per share (In US dollars) 3.12 3.77
*After weighting the effect of Company's share buyback programmes.
NOTE 7 - TRADE PAYABLES - DUE TO CLIENTS
As of 31 December
2023 2022
U.S. dollars in millions
Customers' deposits, net* 279.8 282.8
Segregated client funds (249.6) (272.4)
30.2 10.4
*Customers deposits, net, are comprised of the following:
Customers' deposits 409.4 411.5
Less - financial derivative open positions:
Gross amount of assets (148.4) (139.0)
Gross amount of liabilities 18.8 10.3
279.8 282.8
*The total amount of 'Trade payables - due to clients' includes bonuses to
clients.
NOTE 8 - CASH GENERATED FROM OPERATIONS
Year ended 31 December
2023 2022
U.S. dollars in millions
Cash generated from operating activities
Net income for the year 271.4 370.4
Adjustments required to reflect the cash flows from
operating activities:
Depreciation and amortisation 1.5 1.4
Amortisation of right of use assets 2.6 2.0
Liability for share based compensation 2.7 11.9
Settlement of share based compensation (10.9) (7.3)
Equity share based compensation 13.0 7.5
Taxes on income 64.8 103.9
Interest expenses in respect of leases 0.7 0.1
Exchange differences in respect of leases 0.7 (0.4)
Interest income (51.9) (13.5)
Foreign exchange losses (gains) on operating activities (5.4) (4.5)
17.8 101.1
Operating changes in working capital:
Decrease (increase) in other receivables and others 2.4 5.2
Increase (decrease) in trade payables due to clients 19.8 9.8
Increase (decrease) in other payables 24.3 24.1
Increase (decrease) in service suppliers 0.9 (3.8)
47.4 35.3
Cash generated from operations 336.6 506.8
Non-cash transactions
During the year ended 31 December 2023, $14.1 million in right of use assets
and lease liabilities were recognised.
NOTE 9 - SUBSEQUENT EVENTS
In January 2024, the Group obtained a clearing membership of Eurex Clearing
AG.
On 20 February 2024, the Company declared a final dividend in an amount
of $31.0 million ($0.3911 per share). The dividend record date is 1 March
2024 and it will be paid to the shareholders on 11 July 2024.
On 20 February 2024, the Company declared a special dividend in an amount
of $44.0 million ($0.5551 per share). The dividend record date is 1 March
2024 and it will be paid to the shareholders on 11 July 2024.
On 20 February 2024, the Company declared the adoption of a share buyback
programme to buy back up to $100.0 million of the Company's ordinary shares,
comprised of a final share buyback programme in the amount of $31.0 million
and a special share buyback programme in the amount of $69.0 million.
1 (#_ftnref1) EBITDA - Revenue (trading income and interest income) minus
operating expenses plus depreciation and amortisation
2 (#_ftnref2) New Customers - Customers depositing for the first time
3 (#_ftnref3) Active Customers - Customers who made at least one real money
trade during the period
4 (#_ftnref4) AUAC - Average User Acquisition Cost
5 (#_ftnref5) ARPU - Average Revenue Per User
6 (#_ftnref6) Market expectations based on compiled analysts' consensus
forecasts, as at 23 October 2023
7 (#_ftnref7) Customer Income - Revenue from OTC Customer Income (customer
spreads and overnight charges) and Non-OTC Customer Income (commissions from
the Group's futures and options on futures operation and from 'Plus500
Invest', the Group's share dealing platform)
8 (#_ftnref8) Customer Trading Performance - Gains/losses on customers'
trading positions
9 (#_ftnref9) Market expectations based on compiled analysts' consensus
forecasts, which can be found on the Investor Relations section of the
Company's website. Consensus forecasts for FY 2024 revenue and EBITDA are
$653.8m and $287.5m, respectively
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