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Spreadbetting company Plus500's shares surge on upbeat forecast

Published 07/08/2017, 09:43
Updated 07/08/2017, 09:50
Spreadbetting company Plus500's shares surge on upbeat forecast
PLUSP
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CMCX
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(Reuters) - Shares in Plus500 Ltd (L:PLUSP) rose more than 11 percent on Monday after the British spreadbetting firm doubled its first-half core earnings and said 2017 results would significantly exceed its expectations.

Plus500, an online trading platform for retail customers to trade Contracts for Differences (CFDs) internationally, also said it was exploring a number of opportunities to extend its market reach to new territories.

Shares in the London-listed company hit a high of 730.5 pence after the results, the highest since Sept. 28 last year, and were trading up 11 percent at 0812 GMT.

The provider of online trading tools for retail investors said earning before interest, taxes, depreciation and amortisation for the first six months of 2017 jumped 100 percent to 118.5 million pounds ($154.6 million) as it added customers.

"Overall, momentum is expected to continue, resulting in strong growth in 2017 significantly ahead of the group's previous expectations," the Alternative Investment Market (AIM) listed company said.

"Delivering this performance is expected to enable the board to continue its policy of delivering attractive shareholder returns through generous dividends payments and the additional, enhanced share buy back programme," it said.

Plus500 added 31,671 new customers in the second quarter, 43 percent higher than the 22,210 it added in the first quarter.

CFDs allow people to bet on moves in share prices without having to buy the underlying stock. Binary options are a bet on whether a stock or other instrument will trade above or below a set level in future.

However, regulators have been moving to tighten controls on the fast-growing 3.5 billion pound spreadbetting industry.

Britain's Financial Conduct Authority (FCA) said in December it had found evidence of poor market conduct over the past six years and that people using CFDs lost 2,200 pounds a year on average.

Liberum analysts said in a note that they believed Plus500 was continuing to prove very capable of adapting to changes in its markets.

Shares in the Plus500 have outperformed rival CMC Markets (L:CMCX) so far this year.

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