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* Plus500 reports jump in revenue, profits
* Shares reverse direction to move higher in late trading
* Results due to more than just favourable market conditions
-
Liberum analysts
(Adds CEO comments, graphic; updates share move)
By Muvija M
Feb 17 (Reuters) - London-listed online trading platform
Plus500 plans to venture into North America after a
surge in profits for 2020 as company benefited from a boom in
small-time traders making big bets on financial markets.
Plus500 is currently available in more than 50 countries,
and if it establishes a base in the United States, it could
become a rival to the likes of trading app Robinhood.
"We do plan to enter a new geography, obviously North
America is one of them," Chief Executive David Zruia told
Reuters. "The United States is one of the largest markets that
we still aren't operating in," he said. Zruia did not disclose
specifics on timing.
Plus500's rival IG has just announced plans to buy
U.S. trading platform tastytrade for $1 billion after a strong
year for these new retail investment brokerages.
Plus500 reported a 146% surge in profits for 2020 to $516
million, as it signed up nearly 300,000 new customers, triple
the equivalent figure from a year earlier as traders kept at
home by coronavirus lockdowns bet heavily.
Plus500 also said it plans to pay almost $30 million in
special dividends and buy back $25 million in shares.
The results were also driven by the rise of easy access
trading apps that require little more than a credit card and a
mobile phone to access.
NOT A NORMAL YEAR
Plus500 shares, which fell in early trading on Wednesday,
were 3% higher by 1453 GMT.
A trading frenzy around GameStop and a number of
other U.S. stocks has shone a light on Plus500 and other
players, such as IG and CMC.
Historically more focused on heavily-leveraged bets on
currency prices, all have seen their main measures of
performance boom since the pandemic helped to increase
volatility on stock, commodity and currency markets.
"A number of market trends emerged and had an influence on
the performance of the company during the year," said Plus500,
which offers more than 2,500 financial instruments, including
equities, indexes, commodities, options, forex and
cryptocurrencies.
"The record FY20 results are due to more than just
favourable market conditions," Liberum analysts wrote in a note.
Plus500 suggested that revenue in the current year may not
match up to the $872.5 million it recorded for 2020, with a
company-supplied consensus forecast pegging this year's number
at $433.3 million.
"We don't know where this year could go. 2020 was an
unprecedented year. We cannot treat it as a normal year in any
aspect," Zruia said.
The company still expects the revenue to grow from "more
normalised levels" it saw in 2019.
(Reporting by Muvija M and Priyanshi Mandhan in Bengaluru;
Editing by Patrick Graham, Rashmi Aich and Barbara Lewis)
