CFD platform continues to generate lots of cash
Companies: Plus500 Ltd.
Plus500 shares rose 11% early on Friday after the AIM-listed CFD platform announced plans to buy back $10m worth of shares as it confirmed it had enjoyed a good Q2 despite "exceptionally" low levels of market volatility.
The Company said that compared to the first quarter, revenue had since been stronger and profit margins had been maintained, albeit against a backdrop of considerably lower levels of volatility on the VIX index compared to 2016.
Liberum said the update indicated that positive momentum which was seen in Q1 had continued into Q2:
"...risk to consensus forecasts is strongly to the upside. So far there has been no impact to business from the proposed regulatory changes in Plus's markets."
In a separate RNS, PLUS said it would use $10m to buy back shares between today and 31 August, which is in addition to the $75m dividends to be paid out in July.
Today's update follows IG Group's update earlier this week which showed slower revenue growth than analysts had anticipated thanks to quieter financial markets.
CEO Asaf Elimelech said he was pleased to announce the programme, which will be funded by the firm's "significant" cash resources.
"Together with the substantial dividend payments due to be paid in July, our cash generative business model is enabling us to provide good shareholder returns despite current regulatory uncertainties."
