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Plus500 Ltd. — Interim / Quarterly Report 2017
Aug 7, 2017
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Interim / Quarterly Report
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RNS Number : 2181N
Plus500 Limited
07 August 2017
7 August 2017
Plus500 Ltd.
("Plus500" or "the Group")
Interim Results for the six months ended 30 June 2017
'Record first half revenues and profits'
Plus500, a leading online service provider for retail customers to trade Contracts for Differences ("CFDs") internationally, is delighted to announce its interim results for the six months ended 30 June 2017.
Financial Highlights:
| H1 2017 | H1 2016 | Change | |
| Revenues | $188.4m | $158.8m | 19% |
| EBITDA1 | $118.5m | $59.1m | 100% |
| Net profit | $90.7m | $44.5m | 104% |
| Earnings per share2 | $0.79 | $0.39 | 103% |
| Cash | $220.7m | $96.2m | 129% |
| ARPU3 | $1,678 | $1,525 | 10% |
| AUAC4 | $836 | $1,328 | -37% |
| Operating cash flow | $84.6m | $36.8m | 130% |
| Operating cash conversion5 | 97% | 95% | 2% |
| Total returns to shareholders · Dividend - payout - per share · Share Buy back Programmes (including initial $10.0m share buy back programme announced on 2 June 2017) Total returns to shareholders |
$27.2m $0.2387 $37.2m $64.4m |
$26.7m $0.2324 -- $26.7m |
· Record first half results, significantly ahead of expectations, benefitting from:
o Active Customers6 - increased 8% to a record level of 112,317 (H1 2016: 104,119)
o New Customers7 - significant growth of 43% to 31,671 in Q2 2017 (Q1 2017: 22,210)
o ARPU - increased 10% due to proportion of high value customers, providing potential for increased
future revenues
o AUAC - a meaningful decrease of 37% in cost per new customer acquired due to optimisation of
marketing activity
· Increased level of shareholder return as percentage of net profit with the adoption of additional share buy
back programme
Operational Highlights:
· Increased contribution from the trading of new financial instruments and new exchanges led to revenue
outperformance
· Enhanced mobile proposition resulted in mobile representing 74% of total revenues (FY 2016: 70%)
· Plus500 already compliant with the latest updates from its different regulators:
o Plus500 welcomes a co-ordinated approach by regulators and consistent conduct rules across all
European jurisdictions:
§ The Financial Conduct Authority ("FCA") and European Securities and Markets Authority ("ESMA") conclusions are expected to create a more cohesive approach to protect customers from poor industry practices
§ Customer balance protection remains a core principle of Plus500's business model and has been since inception
§ Plus500 was already compliant with the outcomes of the recent consultation of the German Federal Financial Supervisory Authority ("BaFin")
o Plus500 has made the adjustments required to comply with all recent regulatory changes, including:
§ Plus500 is now compliant with the outcomes of the recent consultation of the French Autorité des Marchés Financiers ("AMF")
§ Plus500 has fully implemented the Cyprus Securities and Exchange Commission ("CySEC") consultation conclusions (around leverage, bonuses, withdrawals and balance protection) and continues to trade well in this jurisdiction
Current trading:
· Current trading in the third quarter to date has continued to be strong
· Overall, the Group is currently on track to significantly exceed prior market expectations for 2017
Asaf Elimelech, Chief Executive Officer of Plus500, commented:
"Plus500 achieved record first half results, significantly ahead of market expectations. New Customers continue to join and the proportion of both New and Active Customers originating from well regulated markets is growing and continues to expand the Group's community of high quality customers.
"Our efficient marketing activity and retention initiatives led to increased New Customer sign ups during Q2 2017, customer re-activations and high customer trading levels during the first half. Investment Trends described it well saying that Plus500 has caused a noticeable shift in the industry, where CFDs no longer play second fiddle to the traditionally preferred spread betting product.8
"As a leading player in the industry, we are committed to provide all our customers with the most comprehensive product offering alongside best practice regulation. Our trading platform therefore provides all our customers, of all experiences, a protection mechanism to prevent them losing more than their account balance. We believe that the current regulatory changes will promote a consistent set of conduct rules across all European jurisdictions which will ensure a more sustainable industry, of which we intend to continue to be one of the leaders.
"We continue to invest in enhancing our trading platform and in our brand whilst exploring new avenues for growth. This investment together with our highly flexible business model will enable us to deliver further growth, whilst managing the impact of any regulatory changes which are expected to take effect during 2018.
"Overall, our expectations are that with the continuance of the current momentum we will deliver strong year-on-year growth in 2017, which we expect to carry forward into 2018."
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014
1 EBITDA - Earnings before interest, taxes, depreciation and amortisation
2 Earnings per share - calculated based on weighted average number of ordinary shares in issue as of 30 June 2017 - 114,850,572
3 ARPU - Average revenue per user
4 AUAC - Average user acquisition cost
5 Operating cash conversion - Cash generated from operations / EBITDA
6 Active Customers - Customers who made at least one real money trade during the period
7 New Customers - Customers depositing for the first time during the period
8 Investment Trends Leverage Trading report released in June 2017
For further details:
| Plus500 Ltd Elad Even-Chen, Chief Financial Officer [email protected] |
Tel: +972-4-8189503 |
| Liberum - Nomad and Joint Broker Clayton Bush, Neil Elliot, Josh Hughes www.liberum.com |
Tel: 020 3100 2222 |
| Berenberg - Joint Broker Chris Bowman, Mark Whitmore www.berenberg.de/en |
Tel: 020 3207 7800 |
| MHP Communications Reg Hoare, Tim Rowntree, Kelsey Traynor [email protected] |
Tel: 020 3128 8100 |
About Plus500
Company website: www.plus500.com
Plus500 has developed and operates an online trading platform for retail customers to trade CFDs internationally over more than 2,100 different underlying global financial instruments comprising equities, indices, commodities, options, ETFs and foreign exchange. The Company enables retail customers to trade CFDs in more than 50 countries. The trading platform is accessible from multiple operating systems (Windows, smartphones (iOS, Android and Windows Phone), tablets (iOS, Android and Surface) and web browsers). Plus500 retains operating licences and is regulated in the United Kingdom, Australia, Cyprus, Israel, New Zealand and South Africa. Customer care is integral to Plus500: customers cannot lose more than their account balance and there are no commissions on trades. Plus500 offers its customers sophisticated risk management tools to manage their trading positions and a free demo account with live feeds is available on an unlimited basis for platform users.
Business Update
Introduction
The six months ended 30 June 2017 has seen the Group deliver a strong operating performance, which includes record first half revenues and profits and a record number of Active Customers. Despite regulatory changes (which already apply to most of Plus500's business), our core CFD ("Contracts for Difference") market continues to establish itself within the global retail investment community, with growth in CFD traders.
The Group had a record start to 2017 with revenues during the period up 19% to $188.4 million (H1 2016: $158.8 million) and profit before tax up 99% to $116.3 million (H1 2016: $58.5 million). The Group's performance has been driven by its highly successful online marketing campaigns, diverse product offering and its user-friendly platform, which attracted many New Customers and achieved a record number of Active Customers in the period. The high revenues were achieved thanks to the increase in high value customers acquired by the Group. Q2 2017's increased level of ARPU alongside a low churn rate, reflects the strength of the Group and its attractiveness to customers.
Dividends and share buy backs
This solid performance further underpins the Board's commitment to pursuing a generous dividend policy. The Board has resolved to optimise shareholder returns by rewarding them with an interim payout (60% of H1 2017 net profit) comprised of two equal components: 50% as a cash payment ($27.21 million or $0.2387 per share) and 50% ($27.21 million) being used to buy back the Company's shares. The ex-dividend date is 7 September 2017, the record date 8 September 2017 and payment date 23 November 2017. The aggregate cash dividend payout of $27.21 million was calculated based on the number of Company's shares outstanding as of 4 August 2017 and such aggregate amount will be reduced by the amount attributable to any Company's shares repurchased by the Company from 4 August 2017 through the dividend record date of 8 September 2017 pursuant to the buy back programmes.
Having announced a share buy back programme on 2 June 2017 of $10 million through 31 August 2017 (of which $ 6.87 million has been completed as of 4 August 2017), the Board is pleased to announce an additional share buy back programme to purchase up to $27.21 million of the Company's shares. This makes a total of $37.21 million for the two buy backs. The additional buy back programme will run from the date of this announcement to 1 February 2018. Similar to the initial programme, the Company has appointed Liberum Capital Limited ("Liberum") to manage the programme as an irrevocable, non-discretionary share buy-back programme to repurchase on the Company's behalf, and within certain parameters. The Company and its directors have no power to invoke any changes to the above programme and they will be conducted at the sole discretion of Liberum. Purchases may continue during any closed period to which the Company is subject during this period. The maximum number of shares that may be acquired pursuant to the two buy back programmes is 11,488,837, which, in line with UK market practice, represents 10% of the Company's issued share capital. The buy back programme will be funded from the Company's current cash balances which stood at $220.7 million as at 30 June 2017. To the extent that the buy back programme or dividend payments above are not spent this will be rolled forward into future shareholder return as part of our payout ratio.
The total interim payout of both the cash dividend payment and the two buy back programmes will represent a total payout of $64.4m (H1 2016: $26.7 million) in relation to the period.
The Board remains committed to its policy of a 60% payout ratio, to be allocated between cash dividend and buy backs, reflecting the strength of Plus500's business model and its ability to convert net earnings into cash-flow. The Board also retains flexibility to pay special dividends or buy back additional shares, such as the special share buy back programme of $10 million announced on 2 June 2017, when the Company generates surplus cash.
Operational review
Plus500 operates from a strong footprint, principally across Europe and Australasia, with six regulatory licences. Alongside the market share in its core European operations, the Group is currently exploring a number of opportunities to build its brand and further extend its market reach to new territories.
The Group continues to invest in the growth of the business, including by broadening its brand awareness via its main sponsorship of Atlético Madrid and its official sponsorship of Australian professional rugby union team the Plus500 Brumbies as well as introducing mass media events.
The Company has expanded its international footprint and in 2017 was granted a new licence in South Africa and has continued to implement such adjustments to its business model and offering as required by relevant regulatory bodies.
The Company's ability to provide its customers with new financial instruments and new exchanges has attracted New Customers and contributed to the strong revenue increase.
For the half year as a whole, Active customers increased by 8% to a record level of 112,317 (H1 2016: 104,119). Marketing activity in the period was optimized and attracted both a high level of New and Active Customers at a much lower cost. New Customers decreased slightly to 53,881 (H1 2016: 56,929), but this masked a quiet Q1 and a significant 43% increase in New Customers in Q2 in comparison to Q1. Marketing spend for new customers is the principal expense of the Group and has decreased by 40% in H1 2017 to a level of $45.1m (H1 2016: $75.6m). The Group continues to have an otherwise low overhead base.
Overall, the Group was profitable every month in the year to date and Plus500's business model continues to be extremely cash generative with 97% conversion of operating profit to cash flow (H1 2016: 95%). cash stood at $220.7 million as at 30 June 2017 (which included a total of $75.0 million which was subsequently paid out in dividends (final and special) on 3 July 2017) (30 June 2016: cash $96.2 million), all amounts exclude client funds which are held in segregated bank accounts.
Continuous development
The Company is the second largest CFD provider in the UK, based on Investment Trends Leverage Trading report released in June 2017 and continues to be one of the leading companies in its field.
The growing importance of mobile technology within the CFD trading industry and the Group's leadership in this area are reflected in the fact that during H1 2016 over 70% of the Group's total trades executed on its trading platform were completed on a mobile device. Additionally, based on Investment Trends 2017 UK Leverage Trading Report, Plus500's clients are significantly more likely to use their mobile devices to place trades compared to the industry's level. 8 In H1 2017, the adoption of the Group's mobile and tablet offering has continued to grow and now represents 74% of the Group's total revenues.
In April 2017 the Company launched a new website designed to be more user-friendly and easy to use, with improved user interface and user experience; this is expected to enhance customer service and satisfaction whilst creating greater web-site traffic and trading activity.
Plus500 has placed an increased level of focus and investment on customer satisfaction and customer service in order to retain customers whilst providing an additional strong differentiator in New Customer acquisition and retention.
During H1 the Group has invested resources to develop and enhance its customer service initiatives, and some of the benefits are already being reflected by the satisfaction rate of the Group's customers which has increased significantly.
Regulatory update
The industry in which the Group operates is highly regulated. As a result, the Group has continued to invest in its regulatory and compliance personnel as well as its systems and processes with a strong focus on best practice and maintaining an open dialogue with each of its regulators. Overall, the Group has made significant investment in compliance which is reflected in its regulatory culture.
Overall, Plus500 believes that the current changes suggested by various regulators will assist in protecting customers' interests and protect them from illegal and unregulated providers, whilst ensuring the industry will become more sustainable. During the first half of 2017, a number of regulators have issued notices and consultation papers regarding future regulatory changes. In this context, Plus500 welcomes a co-ordinated approach by regulators and consistent conduct rules across all European jurisdictions. Plus500 believes that co-operation and the mutual efforts of the regulators together with providers like Plus500, will assist the regulators in implementing these changes.
The Board would like to emphasise that Plus500 has always offered balance protection and never offered binary options and does not operate a call centre model that solicits customer trading or deposits.
During Q1 2017, Plus500 has fully implemented the required changes raised by various regulators, as follows:
CySEC
CySEC's approach reflects ESMA's view and is in line with the regulatory changes of other regulators. The implemented changes included among others: cancellation of bonus schemes, setting default levels of leverage and enforcing negative balance protection mechanisms. The Company, which since its inception has provided negative balance protection to all its customers, has not found these changes to be an obstacle to doing business or a cause for reduced revenues.
BaFin
Plus500 has always been compliant with the outcomes of BaFin's consultation in Germany and will continue to provide all of its customers with negative balance protection mechanisms.
AMF
Plus500 is compliant with the outcomes of AMF's recent consultation in France.
FCA / ESMA
The FCA has decided to postpone the declaration of its consultation until the European Securities and Markets Authority (ESMA) provides its conclusions to its current consultation which is expected during 2018.
Board changes
During the period we were pleased to announce the appointment of Penelope Judd as the Chairman of the Company. Ms. Judd is also the chairman of the Company's regulatory and risk committee and has served as a non-executive director for one year. She is a chartered accountant with over 30 years of City and financial services experience specialising in compliance, governance, regulation, corporate finance and audit.
In addition, we were pleased to announce the appointment of Steve Baldwin as a Non-Executive Director of the Company. Mr. Baldwin is currently a non-executive director of Elegant Hotels Group plc. and was until recently a non-executive director of Panmure Gordon & Co. plc. He has an extensive corporate finance background and most recently held the position of Head of European Equity Capital Markets and Corporate Broking at Macquarie Capital until February 2015 when he decided to pursue a non-executive career. Prior to this Mr. Baldwin was a Director at JPMorgan Cazenove for ten years and was a Vice President of Corporate Finance at UBS from 1995 to 1998. He qualified as a Chartered Accountant at Coopers & Lybrand.
This strengthens our UK based non-executive directors and our commitment to good governance and best practice regulatory compliance. The Company has incorporated a best practice approach used by London main list companies in its Board composition and its variety of Board committees.
Financial review
Revenues in the first half of 2017 totalled $188.4 million (H1 2016: $158.8 million), representing 19% growth compared to H1 2016. The growth achieved is attributed to the growing number of Active Customers, up 8% to 112,317 in the first half (H1 2016: 104,119) and the high value customers that have started and continued to use Plus500's trading platform.
| Qtr 30/6/17 | Qtr 30/6/16 | Change | H1 2017 | H1 2016 | Change | |||
| Revenues Number of New Customers |
$110,876 31,671 |
$73,614 28,137 |
51% 13% |
$188,417 53,881 |
$158,772 56,929 |
19% -5% |
||
| Number of Active Customers | 80,526 | 70,958 | 13% | 112,317 | 104,119 | 8% | ||
| ARPU | $1,377 | $1,037 | 33% | $1,678 | $1,525 | 10% | ||
| AUAC | $787 | $1,347 | -42% | $836 | $1,328 | -37% |
EBITDA in the first half of 2017 was $118.5 million (H1 2016: $59.1 million), an increase of 100%, with EBITDA margins increasing from 37% in H1 2016 to 63% in H1 2017. Net profit for the period was $90.7 million (H1 2016: $44.5 million), up 104%.
EBITDA and the EBITDA margin increased significantly due to sales growth and the optimisation of customer acquisition resulting from Plus500's lean cost structure and efficient online marketing approach (the latter being reflected in the significantly lower AUAC).
Plus500's total assets increased from $117.6 million in H1 2016 to $250.3 million in H1 2017, an increase of 113%, with cash balances increasing to $220.7 million (H1 2016: $96.2 million), and equity of $148.5 million representing approximately 59% of the balance sheet. Cash balances are stated including a total of $75.0m which was paid out in dividends (final and special) on 3 July 2017.
Current Trading and Outlook
Plus500 has performed strongly and significantly ahead of market expectations in the first half of 2017 and the Board looks ahead with continued confidence. Current trading in the third quarter to date has continued to be strong, benefitting from the New Customers delivering revenues and with margins benefiting from high retention rates of Active Customers.
The outcome of the year will be subject to the balance between the benefit of the positive trading conditions continuing, set against the possible negative impact of the regulatory changes already implemented in the majority of our countries of operation. However, the Board believes that the Group's lean cost structure together with its flexible business model will enable it to adjust to future changes and to continue to be one of the leaders in its industry.
Currently, the announced regulatory changes (by CySec, BaFin and AMF) have not meaningfully affected the Company's business model or performance. The essence and timing of the FCA's and ESMA's potential regulatory changes remains an uncertainty, although the outcome is expected during 2018.
Over the medium to long term, the Board expects margins will benefit from the operational gearing inherent in the Group's low cost fixed overhead business model and its ability to flex marketing expenditure. We also continue to explore opportunities for growth in new territories.
In conclusion, Plus500 has more high value customers, an enhanced trading platform, more robust processes, more routes to market and a stronger brand and the Board is confident that the Group's flexible business model will enable it to adapt to the upcoming regulatory changes and gives the Group a competitive advantage to deliver another excellent performance this year. The Board is confident that Plus500's technology is market leading and is a significant competitive advantage.
Overall, momentum is expected to continue, resulting in strong growth in 2017 significantly ahead of the Group's previous expectations. 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.
PLUS500 LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 JUNE 2017
| As of 30 June | As of 31 December | ||||||
| 2017 | 2016 | 2016 | |||||
| (Unaudited) | (Audited) | ||||||
| U.S. dollars in thousands | |||||||
| Assets | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | 220,611 | 96,137 | 136,481 | ||||
| Short-term bank deposit | 40 | 39 | 37 | ||||
| Restricted deposit | 419 | 356 | 356 | ||||
| Accounts receivable | 14,801 | 17,610 | 9,690 | ||||
| Income tax receivable | 10,023 | - | 4,147 | ||||
| 245,894 | 114,142 | 150,711 | |||||
| NON-CURRENT ASSETS: | |||||||
| Long term restricted deposit | 160 | 25 | 102 | ||||
| Property, plant and equipment, net | 3,506 | 2,985 | 3,429 | ||||
| Intangible assets, net | 93 | 102 | 113 | ||||
| Deferred income taxes | 655 | 329 | 353 | ||||
| 4,414 | 3,441 | 3,997 | |||||
| T o t a l assets | 250,308 | 117,583 | 154,708 | ||||
| Liabilities and equity | |||||||
| CURRENT LIABILITIES: | |||||||
| Trade payables - due to clients | 1,182 | 543 | 1,588 | ||||
| Other accounts payable and accruals: | |||||||
| Service suppliers | 14,548 | 19,765 | 5,827 | ||||
| Other | 5,251 | 3,722 | 7,083 | ||||
| Income tax payable | 3,126 | 2,387 | 1,912 | ||||
| Share-based compensation | 2,054 | 610 | 2,298 | ||||
| Dividend | 75,000 | - | - | ||||
| 101,161 | 27,027 | 18,708 | |||||
| NON- CURRENT LIABILITIES: | |||||||
| Share-based compensation | 638 | 598 | - | ||||
| EQUITY: | |||||||
| Ordinary shares | 317 | 317 | 317 | ||||
| Share premium | 22,220 | 22,220 | 22,220 | ||||
| Cost of Company's shares held by the Company | (3,200) | - | - | ||||
| Retained earnings | 129,172 | 67,421 | 113,463 | ||||
| T o t a l equity | 148,509 | 89,958 | 136,000 | ||||
| T o t a l liabilities and equity | 250,308 | 117,583 | 154,708 | ||||
| Asaf Elimelech | |||||||
| Chief Executive Officer | |||||||
| Elad Even-Chen | |||||||
| Group Chief Financial Officer | |||||||
| Penelope Judd | |||||||
| Non-Executive Director and Chairman | |||||||
Date of approval of the interim financial information by the Company's Board of Directors: 4 August 2017
The attached notes are an integral part of this condensed consolidated interim financial information.
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017
| Year ended | |||||
| Six months ended 30 June | 31 December | ||||
| 2017 | 2016 | 2016 | |||
| (Unaudited) | (Audited) | ||||
| U.S. dollars in thousands | |||||
| TRADING INCOME | 188,417 | 158,772 | 327,927 | ||
| SELLING, GENERAL AND | |||||
| ADMINISTRATIVE EXPENSES: | |||||
| Selling and marketing | 61,227 | 91,488 | 157,277 | ||
| Administrative and general | 8,997 | 8,355 | 20,132 | ||
| INCOME FROM OPERATIONS | 118,193 | 58,929 | 150,518 | ||
| Financial income | 3,264 | 815 | 3,624 | ||
| Financial expenses | 5,128 | 1,235 | 2,160 | ||
| FINANCIAL INCOME (EXPENSE), net | (1,864) | (420) | 1,464 | ||
| INCOME BEFORE TAX ON INCOME | 116,329 | 58,509 | 151,982 | ||
| TAXES ON INCOME | 25,620 | 14,009 | 34,740 | ||
| PROFIT AND COMPREHENSIVE INCOME FOR | |||||
| THE PERIOD | 90,709 | 44,500 | 117,242 | ||
| In U.S. dollars | |||||
| EARNINGS PER SHARE (basic and diluted) | 0.79 | 0.39 | 1.02 | ||
The attached notes are an integral part of this condensed consolidated interim financial information.
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017
| Ordinary | Share | Cost of Company's shares held by | Retained | ||
| shares | premium | the Company | earnings | Total | |
| U.S. dollars in thousands | |||||
| BALANCE AT 1 JANUARY 2017 (audited) | 317 | 22,220 | - | 113,463 | 136,000 |
| CHANGES DURING THE SIX MONTHS ENDED 30 JUNE 2017 (unaudited): | |||||
| Profit and comprehensive income for the period | 90,709 | 90,709 | |||
| TRANSACTION WITH SHAREHOLDERS: | |||||
| Dividend | (75,000) | (75,000) | |||
| Acquisition of the Company's shares by the Company | (3,200) | (3,200) | |||
| BALANCE AT 30 JUNE 2017 (unaudited) | 317 | 22,220 | (3,200) | 129,172 | 148,509 |
| BALANCE AT 1 JANUARY 2016 (audited) | 317 | 22,220 | - | 95,117 | 117,654 |
| CHANGES DURING THE SIX MONTHS ENDED 30 JUNE 2016 (unaudited): | |||||
| Profit and comprehensive income for the period | 44,500 | 44,500 | |||
| TRANSACTION WITH SHAREHOLDERS - | |||||
| Dividend | (72,196) | (72,196) | |||
| BALANCE AT 30 JUNE 2016 (unaudited) | 317 | 22,220 | - | 67,421 | 89,958 |
| BALANCE AT 1 JANUARY 2016 (audited) | 317 | 22,220 | - | 95,117 | 117,654 |
| CHANGES DURING THE YEAR ENDED 31 DECEMBER 2016 (audited): | |||||
| Profit and comprehensive income for the year | 117,242 | 117,242 | |||
| TRANSACTION WITH SHAREHOLDERS - | |||||
| Dividend | (98,896) | (98,896) | |||
| BALANCE AT 31 DECEMBER 2016 (audited) | 317 | 22,220 | - | 113,463 | 136,000 |
The attached notes are an integral part of this condensed consolidated interim financial information.
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017
| Six months ended | Year ended | |||
| 30 June | 31 December | |||
| 2017 | 2016 | 2016 | ||
| (Unaudited) | (Audited) | |||
| U.S. dollars in thousands | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Cash generated from operations (see Appendix A) | 115,519 | 56,212 | 153,294 | |
| Income tax paid, net | (30,474) | (19,502) | (44,548) | |
| Interest received (paid), net | (490) | 86 | 161 | |
| Net cash flows provided by operating activities | 84,555 | 36,796 | 108,907 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
| Purchase of deposits | (52) | - | - | |
| Increase in restricted deposits | (25) | (176) | (253) | |
| Purchase of property, plant and equipment | (399) | (1,190) | (1,905) | |
| Purchase of intangible assets | - | (22) | (47) | |
| Net cash flows used in investing activities | (476) | (1,388) | (2,205) | |
| CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||
| Dividend paid to equity holders of the Company (see note 4) | - | (96,564) | (123,264) | |
| Acquisition of the Company's shares by the Company (see note 5) | (3,200) | - | - | |
| Net cash flows used in financing activities | (3,200) | (96,564) | (123,264) | |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 80,879 | (61,156) | (16,562) | |
| Balance of cash and cash equivalents at beginning of period | 136,481 | 156,497 | 156,497 | |
| Gains (losses) from exchange differences on cash and cash equivalents | 3,251 | 796 | (3,454) | |
| BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 220,611 | 96,137 | 136,481 | |
The attached notes are an integral part of this condensed consolidated interim financial information.
Plus500 LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017
APPENDIX A:
| Six months | Year ended | ||
| ended 30 June | 31 December | ||
| 2017 | 2016 | 2016 | |
| (Unaudited) | (Audited) | ||
| U.S. dollars in thousands | |||
| Cash generated from operations - | |||
| Net income for the period | 90,709 | 44,500 | 117,242 |
| Adjustments required to reflect the cash | |||
| flows from operating activities: | |||
| Depreciation and amortization | 342 | 194 | 479 |
| Taxes on income | 25,620 | 14,009 | 34,740 |
| Interest and foreign exchange losses (gains) on operating activities | (2,918) | (911 ) | 2,942 |
| 23,044 | 13,292 | 38,161 | |
| Operating changes in working capital: | |||
| Decrease (increase) in accounts receivable | (5,111) | (7,842) | 71 |
| Increase (decrease) in trade payables due to clients | (406) | (976) | 69 |
| Increase (decrease) in other accounts payable: | |||
| Service suppliers | 8,721 | 6,374 | (7,564) |
| Other | (1,832) | 242 | 3,603 |
| Liability for share-based compensation | 1,294 | 1,377 | 2,544 |
| Settlement of share-based compensation | (900) | (755) | (832) |
| 1,766 | (1,580) | (2,109) | |
| Cash flows from operating activities | 115,519 | 56,212 | 153,294 |
APPENDIX B: non-cash transactions
On 23 November 2015 the Company declared an interim dividend in an amount of $24.368 million ($0.2121 per share). The dividend was paid to the shareholders on 29 February 2016.
On 5 February 2017, the Company declared a dividend in an amount of $75 million ($0.6528 per share). The dividend was paid to the shareholders on 3 July 2017.
The attached notes are an integral part of this condensed consolidated interim financial information.
Plus500 LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1 - GENERAL INFORMATION
Information on activities of Plus500 Ltd and its subsidiaries (hereafter- the Group)
Plus500 Ltd. (hereafter - the Company) was established in 2008 in Israel as a private limited company with the name Investsoft Ltd. On 18 June 2012, the Company changed its name to Plus500 Ltd. The Company has developed a trading platform for private clients, enabling trading on contracts for differences (hereafter - CFD) on shares, indices, commodities, ETFs, options and foreign exchange.
On 24 July 2013, the Company's shares were listed for trading on the London Stock Exchange in the Company's initial public offering ("IPO").
Plus500UK Limited (hereafter - UK subsidiary or Plus500UK) is a subsidiary of the Company with its main offices located in London, UK. Plus500UK is regulated by the Financial Conduct Authority ("FCA") to offer CFDs.
Plus500AU Pty Ltd (hereafter - AU Subsidiary or Plus500AU) is a subsidiary of the Company with its
main office located in Sydney, Australia. Plus500AU has an Australian Securities and Investments Commission ("ASIC") license, a license from the New Zealand regulator, the Financial Markets Authority ("FMA") and a license from the South African regulatory ("FSB").
Plus500CY Ltd (hereafter - CY Subsidiary or Plus500CY) is a subsidiary of the Company with its main offices located in Limassol, Cyprus. Plus500CY has a Cyprus Securities and Exchange Commission ("CYSEC") license.
Plus500IL Ltd (hereafter - IL Subsidiary or Plus500IL) is a subsidiary of the Company with its main offices located in Tel Aviv, Israel. Plus500IL is regulated by the Israeli Securities Authority ("ISA") to offer CFDs to Israeli customers.
Plus500BOS EOOD (hereafter - BG Subsidiary or Plus500BOS) is a subsidiary of the Company located in Sofia, Bulgaria. Plus500BOS provides only operational services and it is not regulated.
The Group is engaged in one operating segment - CFD trading.
The address of the Company's principal offices is Building 25, Matam, Haifa 31905, Israel.
NOTE 2 - BASIS OF PREPARATION
These condensed consolidated interim financial statements for the six months ended 30 June 2017 have been prepared in accordance with IAS 34 - 'Interim financial reporting'. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with IFRS.
This condensed consolidated interim financial information is reviewed and not audited.
NOTE 3 - ACCOUNTING POLICIES
Significant accounting policies and computation methods used in preparing the interim financial information are consistent with those used in preparing the 2016 annual financial statements, except for the following:
Income tax in interim periods is recognized based on management's best estimate of the annual income tax rate expected.
Plus500 LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 4 - DIVIDEND
The amounts of dividends and the amounts of dividends per share for the years 2016 and 2017 declared and distribute by the Company's Board of Directors are as follows:
| Date of declaration | Amount of dividend in thousands of $ |
| 16 February 2016 | 72,196 |
| 2 September 2016 | 26,700 |
| 5 February 2017 | 75,000 |
On 5 February 2017 the Company declared a dividend in amount of $ 75 million ($0.6528 per share). The dividend was paid to shareholders on 3 July 2017.
The dividends paid in the year ended 31 December 2016 amounted to $123.264 million (along with dividend declared on 23 November 2015 in the amount of $24.368 million and paid to shareholders on 29 February 2016).
Six month payment to 30 June 2016 is $96.564 million being $72.196 million plus $24.368 million and payments in year to December 2016 is $123.264 million being the $96.564 million above and $26.700 million. There are no payments in six months to 30 June 2017.
NOTE 5 - ACQUISITION OF THE COMPANY'S SHARES BY THE COMPANY
On 2 June 2017 the Company announced a proposed share buy back programme (hereafter - the buy back programme) to buy back up to $10 million worth of the Company's shares.
Share purchases will take place in open market transactions and may be made from time to time depending on market conditions, share price, trading volume and other factors. The Company has appointed Liberum Capital Limited ("Liberum") to manage an irrevocable, non-discretionary share buy back programme to repurchase on its behalf, and within certain parameters. The Company and its directors have no power to invoke any changes to the above programme and they will be conducted at the sole discretion of Liberum.
The buy back programme will run from the date of the announcement to 31 August 2017.
The maximum number of shares that may be acquired pursuant to the buy back programme is 11,488,837, which represents 10% of the Company's issued share capital.
The buy back programme will be funded from the Company's current cash balances.
As of 30 June 2017, the Company had acquired 453,661 shares pursuant the buy back programme and spent $3.2 million.
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.
| Six months ended 30 June | Year ended 31 December | ||
| 2017 | 2016 | 2016 | |
| (Unaudited) | (Audited) | ||
| U.S. dollars | |||
| Profit attributable to equity | |||||
| holders of the Company | 90,709,000 | 44,500,000 | 117,242,000 | ||
| Weighted average number of | |||||
| ordinary shares in issue | 114,850,572 | 114,888,377 | 114,888,377 |
Plus500 LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 7- TRADE PAYABLES- DUE TO CLIENTS
| 30 June | 31 December | ||
| 2017 | 2016 | 2016 | |
| (Unaudited) | (Audited) | ||
| U.S. dollars in thousands | |||
| Customers deposits, net* | 72,336 | 72,758 | 63,956 |
| Segregated client funds | (71,154) | (72,215) | (62,368) |
| 1,182 | 543 | 1,588 |
As of 30 June 2017, 2016 and 31 December 2016 the total amount of trade payables due to clients includes bonuses to the clients from all of the subsidiaries.
* Customers deposits, net are comprised of the following:
| 30 June | 31 December | ||||
| 2017 | 2016 | 2016 | |||
| (Unaudited) | (Audited) | ||||
| U.S. dollars in thousands | |||||
| Customers deposits | 99,745 | 84,430 | 83,580 | ||
| Less- financial derivative open | |||||
| positions: | |||||
| Gross amount of assets | (34,770) | (17,257) | (25,902) | ||
| Gross amount of liabilities | 7,361 | 5,585 | 6,278 | ||
| Customers deposits, net | 72,336 | 72,758 | 63,956 |
NOTE 8- SUBSEQUENT EVENTS
On 4 August 2017, the Company declared an interim dividend in amount of $27.21 million ($0.2387 per share) calculated based on the number of issued shares as of 4 August 2017 and an additional buy back programme to buy back $27.21 million worth of the Company's shares.
Share purchases will take place in open market transactions and may be made from time to time depending on market conditions, share price, trading volume and other factors. The Company has appointed Liberum to manage an irrevocable, non-discretionary share buy back programme to repurchase on its behalf, and within certain parameters. The Company and its directors have no power to invoke any changes to the above programme and they will be conducted at the sole discretion of Liberum.
The additional buy back programme will run from 7 August 2017 to 1 February 2018. The maximum number of shares that may be acquired pursuant to the two buy back programmes is 11,488,837, which represents 10% of the Company's issued share capital.
The buy back programme will be funded from the Company's current cash balances.
This information is provided by RNS
The company news service from the London Stock Exchange
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