Plus500 returns money to shareholders, eyes expansion despite profit drop

By Anchal Rana

(Reuters) -Online trading platform Plus500 announced on Monday it would return $120 million to shareholders through dividends and share buybacks and said it was looking at further international expansion through acquisitions.

The London-listed company posted a 43% slump in core profit in the first half as market volatility declined. However, earnings were up 17% sequentially from the second half of last year.

Shares in the company rose by as much as 6%.

Trading platforms are dealing with a slowdown in client activity, as market volatility eased from highs witnessed during Russia's invasion of Ukraine last year and the pandemic.

"We are very much positive about the future for the second half ....we don't know how the volatility will look like but with the diversification and with the entrance to new products, we will keep improving year by year," Chief Financial Officer Elad Even-Chen told Reuters.

The Israeli company has been expanding its revenue stream by entering new markets and acquiring businesses to diversify and mitigate against market volatility.

In first-half, it held a soft-launch in the U.S. futures and retail trading market via its in-house platforms.

"We're very much targeted to put more resources, monetary ones and also operational ones, in order to extend ourselves in the U.S.," said CEO David Zruia on call with Reuters.

"We're very much looking for additional acquisitions on a international geographic level" Zruia added.

The company has been aiming to increase its footprint around the world and obtained a regulatory license for the UAE market in the period. It also expects to launch a product tailored to the Japanese market.

Plus500 added 12% fewer new customers and active customers on its platform fell by 19% year-on-year.

Core profit for the period fell to $174.1 million, from $305.3 million a year earlier.

The company will return $60 million through share buybacks and the rest in dividends.

(Reporting by Anchal Rana in Bengaluru; Editing by Rashmi Aich)