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Looks like grumbles of past AGM's regarding director remuneration have not been solved. Over 20% votes against some of the resolutions regarding pay again. They have wheeled out the line about engaging with engaging with shareholders before but it obviously not working.
Shares are not performing well now either for all the crowing about buybacks, market value today now a pound below the average purchase price for $175M worth!
Shareholders not happy about the remuneration report and allotment of treasury shares to the Executive. Rightly so in my view. Executive remuneration should be paid from the P&L before tax and not coming out of shareholder returns post tax. Especially, given the size of these share bonuses which was equivalent to 0.50% of the market cap in the last round of share payouts in January. This needs to stop.
I think this share is absolute proof that once shareholders have lost trust or faith in the Board of Directors it is extremely hard to get it back. People have long memories.......and funnily enough they don't like unnecessary surprises dumped on them out of the blue that costs them alot of money...........which is exactly what Plus is guilty of in the past. Like Tom I've been in this share for quite some time (longer than Tom but it doesn't matter) and although the company has changed considerably over the last 4 years it's going to suffer from past mistakes. Also the Israeli domicility (lack of clarity) and other factors that have been covered extensively in the past on here (and other boards). They will always lag behind their peers...........unless they decided to move to the FTSE or NYSE. That would change everything (and the re-rate would happen immediately imo). Just my two-penneth.
I guess it is just the way it is. I have had shares here since 2017 and there have been some crazy days. I think it is still viewed as very risky yet still seems to keep on making money. As shares are continuously bought back the the eps will rise meaning the shares should rise even if the p/e stays the same in theory.
I just do not understand why this company has such a painfully PE. It regularly serves up great profits but SP hardly moves. T he fear must be that countries will clamp down on its betting but this has not happened. Have been invested in this for four years and made great profits, but the SP should be twice what it is now.
Q1 figures outstanding and nearly 40% of year end profit already secured. Given increased cash position sp looks way too low just now imv.
More likely due to the fact of buybacks ongoing - would not see this as meaningful
Announced increased holding today -positive
I think the cash position is pretty clear. There’s approximately $1.375 billion of cash available for interest income activities. Not all of this will be in USD, perhaps 80% and not all of it will be on deposit at the full base rate.
A working figure of 3% returning $35-45 million of interest rate income during 2023 is probably a reasonable assumption.
The impact of higher interest rates on profits due to client deposits. Ig has outlined the impact and sensitivity in its interim statement.
What do you want them to clarify?
I am not sure we have seen the end of this debate and the company could be asked to clarify. IG has only marginally more active clients than plus and fully 4 billion pounds of client deposits. Our comparable figure is surely 2.2 billion dollars not some fraction of that. Some of this 4 billion is held directly with IG on its balance sheet but a lot with third parties. However, IG makes it crystal clear in its interims that it can still take quite a benefit from the latter. Indeed on USA such balances it takes the full benefit. If interest rates do average 5 in the USA this year then the uplift on own account plus client on balance sheet balances is around 3 per cent of 1.15 billion but in fact the latter figure probably will be higher. Then of course there is the impact of huge client balances not on balance sheet.
Average cash on the balance sheet throughout the year is 840m (this is the average of 2022 and 2021 balance sheet cash)
Average cash not held on the balance sheet in segregate accounts is 310m (this is the average of 2022 and 2021 segregated cash)
Making the total average 1,150m throughout the year.
Using gross amounts to try an estimate interest received is incorrect. For example lets say you inherited 100k tomorrow which was paid into your bank that pays 1% interest. if you took that 100k out the day after to pay off your mortgage you wouldn't earn 1% of 100k (your gross amount) for that year.
I've had a closer look at the accounts, the interest earned as per the cash flow statement was 13.5m in 2022. this is approx 1.2% of the average cash balances of $1,150m.* . This is when the fed rate averaged 1.9% throughout 2022. its currently at 4.75%-5%. if it stays at that level in 2023 that's 2.5 times the rate in 2022. All being equal the impact is interest earned rises from 13.5 to 33m.
Nothing to be sniffed at, but not a game changer either.
(note: i made an incorrect assumption earlier when i used the P&L Financial Income figure)
Average deposit per active customer is 8,000 and with 280,000 active customers that squares with 2.2 billion. Agree that note 7 tells a different story but one should probably use gross amounts. In any case the numbers on interest are going to be very big. Perhaps should clarify with the company.
@ Beauchamp, my understanding is the $3.2 billion quoted in the prelims statement is accumulated deposits throughout the course of 2022. It’s not net deposits. It’s flow. Net deposits is the number that is relevant to interest rate income. The figure of $3.2 billion is a bit of red herring when it comes to the opportunity for interest rate income.
OTC customer net deposits are stated in the Preliminary Results as $282.2m as at 31 December 2023 (Note 7). US segregated customer deposits were $152.9m. Own cash $930.2m. Therefore, by my understanding the total cash available for interest rate income activities is $1,372 billion.
wish this forum would let you edit.
should read:
.... in 2023 it will be more while the Fed...
They are not holding $3.3b of cash.
$2.3bn of customer deposits is only one part of the equation. (that cash is then used and becomes cash on the balance sheet or gets withdrawn)
The relevant section is in note 16 of the accounts, "segregated client funds"- 2022 = $272m, this has actually decreased from £350m
The interest they earned in 2022 is 41m* (from the "finance income" in the P&L), so that is approx 3% of the total cash they are holding in 2022 (inc the segregated funds). in 2022 it will be more while the Fed rate is high. (i assume given that the bulk of their cash is USD its the fed rate that correlates with the interest they earn rather than the Bank of england rate)
*I assume the only finance income here is interest on cash
I do not think cfd brokers give any interest to clients! On the own account cash that the market effectively gave no credit for there as there was no return virtually there is now a big return that goes into earnings. Cmc has until recent drops been valued on a pe well above plus and so was looking vulnerable. There have not really been downgraded eps for ig just a pe drop.
whoops -what I meant to say is that I've never really factored the customer deposits into my 'interest earning' calculations. sorry - there's no edit button. Just for clarity.
I don't really count the customer deposits...........but I guess they'll give 0.5% or 1% interest to their customers and keep the balance (2 or 3% if the overall interest rate they're getting is, say 3-4%.) You're right - that's a hell of a lot of money just from that side, never mind the $930mill they've got themselves (or more now, that's an old figure).
So - $3.3billion earning 3% interest is..........£90mill in interest! And ironically, there are only 91million shares in circulation.....
And yet........it's Plus500..........so the market remains reticent at best, downright negative at worst.
There should be a trading update soon so we should get some clarification on how things are going.
Both CMC and IGG have had huge drops on their most recent trading statements so I think the market is being extremely cautious here.
Does no one have a comment on yesterday’s posts? It seems like we could have a sustainable up shift in pre tax of over 100 million dollars due to higher interest rates. Maybe even 100 million post tax. What pe is that earnings stream worth? Even at 10 it is maybe 1 billion dollars?!
First line of the last prelim statement. Customer deposits reached 2.3 billion dollars. It seems cfd brokers give nothing in deposits so if interest rates go up about 4 per cent it is massive.
@ Beauchamp. How do you arrive at $3 billion of cash deposits?
As at 31 December 2022, I get to a figure of $1.372 billion as follows:
Own funds: $930.2m
OTC segregated client funds: $282.2m
US segregated funds: $159.2m
Maybe they just could not keep up that pace they had for a few days without shifting the balance even more to buybacks against dividends. What excites me is over 3 billion dollars of own deposits and client deposits. On a one year view they are probably getting an extra 4 or so percent on those! That is a huge figure when the company has a market cap around 2.1 billion dollars. We have yet to really see this play out. In addition there has been a lot if volatility in markets.