Plus500 Regulatory News (PLUS)

14 August 2023

Plus500 Ltd.

("Plus500", the "Company" or together with its subsidiaries the "Group")

Interim results for the six month period ended 30 June 2023

Further progress and execution against Plus500's strategic plans

Significant additional $120.0m shareholder returns announced today, with total shareholder returns of $347.4m so far in FY 2023

Strategic expansion of geographic footprint achieved by obtaining new regulatory licences

FY 2023 expected to be in line with current market expectations[1]

Plus500, an established global multi-asset fintech group operating proprietary technology-based trading platforms, today announces its interim results for the six month period ended 30 June 2023[2].

Robust performance[3], underpinned by market-leading technology platforms, diversified revenue streams and continued ability to attract and retain higher value customers

Financial Highlights:

- Group revenue (comprising trading income of $346.2m and interest income of $22.3m), up 15% to $368.5m, compared to H2 2022 (H2 2022: $321.2m, H1 2022: $511.4m)

- Customer Income[4], a key measure of the Group's underlying performance, up 2% to $304.3m, compared to H2 2022 (H2 2022: $299.8m, H1 2022: $339.8m)

- EBITDA[5] up 17% to $174.1m, compared to H2 2022 (H2 2022: $148.5m, H1 2022: $305.3m)

- EBITDA margin up 2% to 47% compared to H2 2022 (H2 2022: 46%, H1 2022: 60%)

- Basic Earnings Per Share) EPS) up 19% to $1.61, compared to H2 2022 (H2 2022: $1.35, H1 2022: $2.46)

Significant additional $120.0m shareholder returns announced today:

- $60.0m dividend declared today ($0.7344 per share), comprising of an interim dividend of $33.7m ($0.4125 per share) and a special dividend of $26.3m ($0.3219 per share). Both dividends have an ex-dividend date of 24 August 2023, a record date of 25 August 2023 and a payment date of 9 November 2023

- $60.0m new share buyback programme announced today, comprising of an interim buyback programme of $33.7m and a special buyback programme of $26.3m, both to commence following completion of the existing programme

- Strength of the Group's financial performance, combined with highly cash generative earnings model and robust balance sheet, continued to generate compelling value during the period. Total shareholder returns announced to date in FY 2023 is $347.4m, including dividends and share buybacks

Operational Highlights:

Plus500 has evolved from a business providing a single OTC-based product, into the diversified, global multi asset fintech group of today, offering a wide range of products, services and instruments across its OTC, share dealing and futures verticals. The Group caters to a wide customer base in more than 50 countries, all underpinned by the Group's differentiated technology capabilities.

- Over 25 million customers registered on the Group's platforms, providing significant inherent value over time

- Customer cohort record with 55% of OTC revenue derived from customers trading with Plus500 for more than three years (H2 2022: 41%, H1 2022: 36%), demonstrating depth of client relationships, loyalty and enhanced customer engagement

- Average deposit per Active Customer[6] of approximately $6,450 in H1 2023 (H2 2022: approximately $6,400, H1 2022: approximately $5,400)

- Strong ARPU[7] at $2,097 during H1 2023 (H2 2022: $1,805, H1 2022: $2,357), driven by the Group's excellent revenue performance and its ability to attract high value long term customers

Strategic expansion of geographic footprint:

- New regulatory licence obtained in the high growth UAE market in February 2023, with rapid progress made in developing Plus500's position in this significant market

- New regulatory licence obtained in the Bahamas in July 2023, further positioning Plus500 as a global multi asset fintech group which holds 13 different regulatory licenses. This new regulatory licence will enable a comprehensive range of trading products

Delivering against strategic objectives - significant progress made in capitalising on attractive US futures market growth opportunity:

- Strong progress made in accessing the US futures market, representing a multi-year growth opportunity for Plus500:

o  B2B Institutional opportunity - continued to develop strategic position as a B2B market infrastructure provider, through the onboarding of various regulated introducing brokers in the US futures market, supporting institutional clients with brokerage-execution and clearing services

o  B2C Retail opportunity - recently launched 'Plus500 Futures', a new B2C intuitive proprietary futures trading platform. This is in addition to last year's launch of the 'TradeSniper' platform, which now also offers trading on 'event-based contracts'

Robust and liquid balance sheet, with clear capital allocation policy supported by strong cash generation and high-quality operating model:

- Cash balances amounted to $849.0m at the end of H1 2023 (FY 2022: $930.2m, H1 2022: $995.5m)

- No debts or loans since the Company's inception, enabling consistent reinvestment and facilitating shareholder returns

- Significant capital maintained for required regulatory purposes, working capital and other factors to enable additional growth both organically or through bolt-on acquisitions

Plus500's Board of Directors (the "Board") remains confident about the outlook for Plus500 for FY 2023 and beyond:

The Board remains confident about the Group's performance for FY 2023, despite quieter market conditions, and anticipates that the Group's revenue and EBITDA for the current financial year will be in line with current market expectations.

David Zruia, Chief Executive Officer, commented:

"2023 marks the 10th anniversary of our listing on the London Stock Exchange and I am immensely proud of the progress we have delivered over that time in becoming the trusted, differentiated and diversified multi-asset fintech leader we are today.

In the first half of the year, we executed on our strategy to produce a strong performance, thanks to the power of Plus500's market-leading proprietary technology and our consistent ability to attract and retain higher value customers over the long term. Our increasingly diversified revenue streams, broadened product offering, deep customer relationships and the structural growth drivers in our end markets, mean we are able to deliver both growth and attractive shareholder returns.

With continued operational and financial momentum being achieved, we also made substantial progress in delivering against our strategic priorities, particularly in harnessing the attractive growth opportunities in the US futures market and obtaining new regulatory licences in the high growth UAE market and very recently in the Bahamas.

Our track record of delivering outstanding shareholder returns puts us amongst the top cohort of companies on a total returns basis within the FTSE All-Share Index over the past ten years.

We have announced total shareholder returns so far in FY 2023 of $347.4m, including $257.5m in share buybacks and $89.9m in cash dividends. This demonstrates the strength of our balance sheet and the Board's continued confidence in the Group's prospects. Our cash generative earnings model, combined with our continued strategic, operational and financial position, ensures Plus500 is well placed to deliver sustainable growth and strong returns in the medium to long term."

Investor/analyst conference call:

Plus500 will host an audiocast for investors and analysts at 9.00 a.m. UK time today, which can be accessed via the following link: https://www.investis-live.com/plus500/64c798619b8a600d003fe6c0/plus500-half-year-2023-results. The audiocast can also be accessed by dialling +44 800 358 1035 and using the following access code: 667703.

The presentation materials and a recording of the audiocast will be available in due course at https://investors.plus500.com/Reports/Presentation.

About Plus500

Plus500 is an established global multi-asset fintech group operating proprietary technology-based trading platforms. Plus500 offers customers a range of trading products, including OTC ("Over-the-Counter" products, namely Contracts for Difference (CFDs)), share dealing, as well as futures and options on futures.

The Group retains operating licences and is regulated in the United Kingdom, Australia, Cyprus, Israel, New Zealand, South Africa, Singapore, the Seychelles, the United States, Estonia, Japan, the UAE and the Bahamas and through its OTC product portfolio, offers more than 2,500 different underlying global financial instruments, comprising equities, indices, commodities, options, ETFs, foreign exchange and cryptocurrencies. Customers of the Group can trade its OTC products in more than 50 countries and in 30 languages.

Plus500's trading platforms are accessible from multiple operating systems (Windows, iOS and Android) and web browsers. Customer care is and has always been integral to Plus500, as such, OTC customers cannot be subject to negative balances. A free demo account is available on an unlimited basis for OTC trading platform users and sophisticated risk management tools are provided free of charge to manage leveraged exposure and stop losses to help customers protect profits, while limiting capital losses.

Plus500 shares have a premium listing on the Main Market of the London Stock Exchange (symbol: PLUS) and are a constituent of the FTSE 250 index. www.plus500.com.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. 

Forward looking statements

This announcement contains statements that are or may be forward-looking statements. All statements other than statements of historical facts included in this announcement may be forward-looking statements, including statements that relate to the Group's future prospects, developments and strategies. The Company does not accept any responsibility for the accuracy or completeness of any information reported by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions express by the press or other media regarding the Group. The Company makes no representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication.

Forward-looking statements are identified by their use of terms and phrases such as "believe", "targets", "expects", "aim", "anticipate", "projects", "would", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements in this announcement are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. Factors that may cause actual results to differ materially from those expressed or implied by such forward looking statements include, but are not limited to, those described in the Risk Management Framework section of the Company's most recent Annual Report. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of the Group and the environment in which it is and will operate in the future. All subsequent oral or written forward-looking statements attributed to the Company or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. Each forward-looking statement speaks only as at the date of this announcement. Except as required by law, regulatory requirement, the Listing Rules and the Disclosure Guidance and Transparency Rules, neither the Company nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Review of H1 2023 Results

Robust first half performance both financially and operationally

In H1 2023, Plus500 again delivered a robust performance, demonstrating the capability and strengths of the Group's high-quality operating model, its best-in-class leading proprietary technology and the increasingly diversified nature of the business.

Even in calmer financial markets, Plus500's ability to attract and retain customers, driving higher lifetime values, shows the inherent strengths of the Group's trusted, innovative platforms and its ability to deliver value for shareholders through the macroeconomic cycle.

Thanks to its strong balance sheet, including cash balances of $849.0m at period end, the Group is able to invest in its future growth, both organically and through a disciplined approach to strategic bolt on acquisitions. This approach enables Plus500 to enhance its offering for customers by accessing new markets and adding new products, services and features. In turn, this healthy financial position enables to deliver attractive and sustainable returns to shareholders, through share buybacks and dividends.

Customer deposits in the period reached $1.1 billion (H2 2022: $1.1 billion, H1 2022: $1.2 billion), emphasising ongoing customer confidence in Plus500 and the reliability of the Group's trading platforms. The average deposit per Active Customer also increased to approximately $6,450 in H1 2023 (H2 2022: approximately $6,400, H1 2022: approximately $5,400), despite more subdued trading volumes across global financial markets.

Customer loyalty remained strong, with 85% of H1 2023 OTC revenue derived from customers trading with Plus500 for more than a year (H2 2022: 81%, H1 2022: 82%), 55% for more than three years (H2 2022: 41%, H1 2022: 36%) and 32% for more than five years (H2 2022: 27%, H1 2022: 15%), again demonstrating the depth of client relationships, loyalty and enhanced engagement.

Plus500 continually invests in technology to drive innovation and an enhanced user experience. With many customers taking a mobile-first approach to trading, the Group saw 87% of its OTC revenue in H1 2023 generated from customers trading on mobile or tablet devices (H2 2022: 86%, H1 2022: 85%). In addition, 82% of OTC customer trades took place on mobile or tablet devices in H1 2023 (H2 2022: 83%, H1 2022: 82%). This highlights Plus500's industry leadership when it comes to mobile-first services and its relentless focus on innovation.

Delivering against strategic roadmap 

During the period, Plus500 continued to execute against its long-term strategy, enhancing its position as an established global, market-leading multi-asset fintech group with distinct core strengths underpinned by its differentiated technology platforms.

Further progress was made across a number of important areas:

Geographic diversification

Further optimisation of Plus500's growing position in the substantial US futures market

Excellent traction was made during the period in the substantial US futures market where the Group is targeting a number of major growth opportunities.

Plus500 has established a strong and growing position in the futures market in the US, supported by the Group's best-in-class technology and its robust financial position.

US B2B Opportunity

Plus500 has established a new line of business with the formation of a B2B vertical and good progress was made in developing the Group's position as a provider of market infrastructure services for institutional clients in the US futures market, supporting them with brokerage-execution and clearing services. This B2B offering highlights the increasingly diversified nature of Plus500's model, its market leadership and proven operational capabilities. It also provides a significant growth opportunity which has been enhanced by the Group's status as a full Clearing Firm Member of the CME Group and the Minneapolis Grain Exchange (MGEX), with other clearing memberships in the pipeline.

US B2C Opportunity

In addition to the B2B opportunity, Plus500 recently launched 'Plus500 Futures', a new and intuitive trading platform, specifically designed and tailored for retail traders. This offering is performing well and as the retail trading community in the US grows, the Group's ability to apply its innovative and intuitive technology to this vertical, presents an attractive opportunity to further expand its diversified revenue streams. The Group's successful partnership with the Chicago Bulls, the iconic NBA team, continues to increase brand awareness and visibility.

The launch of 'Plus500 Futures' follows the launch of the 'TradeSniper' trading platform which took place in Q3 2022. Plus500 is also proud to include a new set of offerings within the 'TradeSniper' platform, 'event-based contracts', now available on iOS and Android applications.

Both 'Plus500 Futures' and 'TradeSniper' uniquely offer customers a fully holistic solution of onboarding, depositing and trading in futures, and will continue to be developed by Plus500 to provide a consistent, best‐in‐class experience for its customers. This represents an industry first, with Plus500 having successfully leveraged its best-in-class technology and expertise to build an end-to-end, one-stop shop that caters for all the needs of US retail investors in accessing new trading opportunities in futures. Looking ahead, these platforms keep the Group in a strong position to capitalise on the continued growth in retail trading volumes in the US futures market.

Expanding international licences - significant progress made in the high growth UAE market and a new licence obtained in the Bahamas

A new regulatory licence in the high growth UAE market was obtained during the period, further expanding Plus500's geographic footprint and highlighting its leading status with a broad and growing portfolio of international licences. The Group's operation in the UAE is already fully functioning and the Group is pleased to be in line with its strategic roadmap driven by the rapid progress made in developing Plus500's market position in this significant market.

In July 2023, a new regulatory licence was obtained from the Securities Commission of the Bahamas.

Plus500's global portfolio of regulatory licences represents a unique and valuable asset. Considered together, these regulatory licences serve as an economic moat around the Group's business, heightening also the entry barriers to the industry. Additionally, the Group's experience and expertise in obtaining regulatory licences leaves it ideally positioned, as it looks to secure additional licences in new territories.

Expanding product portfolio

Bringing an ever more comprehensive array of products to customers

Plus500 is committed to leveraging its expertise to expand its product offering, introducing innovative new asset classes, instruments and features and deepening its customer relationships at the same time. To this end, the Group continued to make good progress with the launch of innovative new products in the US.

The Group continues to target the expansion of its OTC, share dealing and futures offering, either organically by establishing a regulated operation or via acquisitions.

Class-leading technology

Investing behind R&D and technology to maintain and strengthen competitive advantages

As part of the Group's disciplined capital allocation policy and in order to position itself strongly for the future, Plus500 is committed in investing in technology, innovation and cutting-edge products. During the period, Plus500 maintained this approach to investment behind its people, products and its R&D centres in Israel in order to attract, retain and deepen its relationship with customers, driving growth and value for all stakeholders.

The Board is incredibly proud to have built up a base of over 25 million customers registered on the Group's platforms, a record for the business. This reflects the Group's focus on delivering a superior customer service and the trust that customers continue to place in Plus500's platforms.

With on-going investments in technology and people, particularly at the Company's R&D centres in Israel, the Group will continue leveraging this latent base of over 25 million customers registered on its platforms, through retention, activation and monetisation initiatives, including a premium service offering, which continues to be rolled out to additional high value customers.

Ongoing delivery against operational KPIs

Across its key operational metrics, the Group registered a strong performance in H1 2023, building on the cumulative progress of recent years and underpinned by a constant focus on delivering a high-quality customer service.

55% of OTC revenue was derived from customers trading with Plus500 for more than three years (H2 2022: 41%, H1 2022: 36%).

50,449 New Customers were onboarded during the period (H2 2022: 49,274, H1 2022: 57,275), including 22,248 New Customers onboarded in Q2 2023 (Q2 2022: 23,535). Again, the enduring strengths of the Plus500 brand and customer proposition become clear when this performance is considered against a period of quieter trading volumes across the wider market.

The number of Active Customers during H1 2023 remained robust at 175,762 (H2 2022: 177,946, H1 2022: 216,928), including 122,833 in Q2 2023 (Q2 2022: 145,506). Customer Churn[10] in H1 2023 was 29.6% (H2 2022: 40.7%, H1 2022: 29.7%), including 26.6% in Q2 2023 (Q2 2022: 31.0%).

Over a longer time period, the virtues of Plus500's high-quality earnings model can be evidenced by looking at the cumulative average revenue from OTC Active Customers who first deposited during 2018, which was approximately $4,100 as at the end of H1 2023 (H2 2022: approximately $3,900, H1 2022: approximately $3,700). This demonstrates not only the trust customers place in the Group's trading platform, but also their long-term value.

Owing to the trust and confidence that customers have in Plus500's platforms, customer deposits stayed at a high level in H1 2023 of $1.1 billion (H2 2022: $1.1 billion, H1 2022: $1.2 billion), with an average deposit per Active Customer of approximately $6,450 (H2 2022: approximately $6,400, H1 2022: approximately $5,400). This provides a testament for the store of future value for the Group.

Similarly, ARPU lifted to $2,097 in H1 2023 (H2 2022: $1,805, H1 2022: $2,357), including $1,308 in Q2 2023 (Q2 2022: $1,653). This was driven by the Group's strong revenue performance, combined with the intuitive nature and reliability of its market-leading technology platform that drives customer loyalty.

AUAC was $1,490 in H1 2023 (H2 2022: $1,527, H1 2022: $1,441), including $1,627 in Q2 2023 (Q2 2022: $1,478). Plus500 has a strong track record in delivering high ROI on marketing spend, which is expected to continue, thanks to its unique technological capabilities.

Financial Review - performing strongly

Plus500 delivered a strong financial performance in H1 2023, generating high returns and further enhancing the Group's cash position.

Total revenue in H1 2023 was $368.5m (H2 2022: $321.2m, H1 2022: $511.4m), comprising $346.2m in trading income and $22.3m in interest income, which is also included in EBITDA for the period, including revenue of $160.6m in Q2 2023 (Q2 2022: $240.5m). EBITDA for H1 2023 was $174.1m (H2 2022: $148.5m, H1 2022: $305.3m) with an EBITDA margin of 47% reported during the period (H2 2022: 46%, H1 2022: 60%).

Customer Income, a key measure of the Group's underlying performance, remained consistent during H1 2023 at $304.3m (H2 2022: $299.8m, H1 2022: $339.8m), including $146.5m in Q2 2023 (Q2 2022: $151.8m). Customer Trading Performance[11] was $41.9m during H1 2023 (H2 2022: $21.4m, H1 2022: $171.6m), including $(8.2m) in Q2 2023 (Q2 2022: $88.7m). The Group continues to expect that the contribution from Customer Trading Performance will be broadly neutral over time. Interest income during the period increased, owing to wider global interest rate rises, as central banks lifted base rates.

Net profit in H1 2023 was $146.5m (H2 2022: $126.3m, H1 2022: $244.1m) and basic earnings per share was up 19% to $1.61, compared to H2 2022 (H2 2022: $1.35, H1 2022: $2.46).

Plus500 operates a disciplined approach to managing its cost base, which continues to be positively heavily weighted towards variable costs. This provides a critical advantage, giving the Group great flexibility and agility to respond quickly to market conditions in an uncertain and dynamic economic environment, as has been seen in recent periods. During H1 2023, 70% of the Group's costs were variable (H2 2022: 67%, H1 2022: 73%), with the Group maintaining a flexible and well contained cost base.

Total SG&A expenses were $196.2m during H1 2023 (H2 2022: $174.4m, H1 2022: $207.8m), the main elements of which were marketing technological investment of $75.2m (H2 2022: $75.3m, H1 2022: $82.5m), commissions to processing companies of $21.3m (H2 2022: $21.2m, H1 2022: $23.7m) and employee benefits and other related expenses of $53.5m (H2 2022: $38.1m, H1 2022: $42.8m).

Net financial income amounted to $2.6m in H1 2023 (H2 2022: $14.9m, H1 2022: $9.0m). A substantial proportion of the Group's cash is held in US dollars in order to provide a natural hedge, thereby reducing the impact of currency movements on financial expenses.

Total assets were $940.1m at the end of the period (H2 2022: $1,010.0m, H1 2022: $1,072.5m), with equity of $690.8m, representing approximately 73% of the balance sheet, following the shareholder returns in H1 2023.

Plus500 operates a highly cash generative earnings model, driven by strong cash conversion and supported by relatively low levels of capital expenditure as a result of its automation and technological capabilities.

The Group remains debt-free, with a cash and cash equivalents balance at the end of H1 2023 of $849.0m (H2 2022: $930.2m, H1 2022: $995.5m).

Plus500's strong cash generation and cash balances again enabled it to invest in growth, whilst delivering significant levels of shareholder returns. On 14 February 2023 the Company announced a share buyback programme totalling $70.0m and separately, on 13 June 2023, the Company repurchased shares for a total cash consideration of $127.5m.

In H1 2023, the Company executed share buybacks totalling $214.1m, comprising the outstanding amount of the previous year's ongoing programme which was $29.4m as at 31 December 2022, the $70.0m programme announced on 14 February 2023, of which, by 30 June 2023, $12.8m was remaining and will be completed in the second half of 2023, and the repurchase of shares on 13 June 2023 in the amount of $127.5m. In addition, $29.9m was declared as final and special dividends on 14 February 2023 in relation to FY 2022 and paid to shareholders on 11 July 2023.

The consolidated financial statements are presented in US dollars, which is the Company's functional and presentation currency. Foreign currency transactions and balances in currencies different from the US dollar are translated into the US dollar using the exchange rates prevailing on the dates of the transactions or at the balance sheet date.

A proven track record built on responsible leadership, risk management and customer care

Plus500 is a responsible and trusted market leader. Investing in regulatory compliance, implementing and maintaining industry leading governance and controls remains a top priority across the Group, providing it with a key competitive advantage. The Group takes a customer-centric approach, for example by providing negative balance protection to Plus500's customers on a global basis, meaning that customers cannot lose more than the funds they have on their account. Plus500 complies with global regulatory standards and operates within an established regulatory network, managed by its regulated subsidiaries and co-ordinated centrally.

Plus500's innovative offering, '+Insights', continues to receive positive take-up and feedback from customers and demonstrates Plus500's on-going focus on customer care and delivering on customer requirements. Furthermore, the Group's end-to-end proprietary tech stack enables it to react rapidly to changing regulation, facilitating a robust risk management approach. The Group's sophisticated risk management tools are provided free of charge for customers to manage leveraged exposure, including measures such as stop losses.

A purpose-led Group committed to sustainability

Plus500 is dedicated to operating responsibly and sustainably in all aspects of its business and believes this approach is both its duty and an essential part of effective management.

Enabling people to access the financial markets through the Group's intuitive, secure and user-friendly platforms is of great importance to Plus500, as is the Board's emphasis on protecting and supporting customers. The Group is continuing to make strong progress in providing educational content and information on the inherent risks related to trading, through prominent risk warnings and an increasing number of training tools and features on its platforms, including the launch of a Trading Academy portal in 2022.

Earlier this year, Plus500 also introduced a new ESG trading suite to its OTC and share dealing platforms. The suite consists of ESG scores for the Group's wide variety of stocks, as well as exclusive tradeable ESG Impact Indices, tracking companies that strive for accountability and aligning with customers' ethical investing requirements.

Under the leadership of the Company's highly respected Chair, Professor Jacob A. Frenkel, Plus500 places the utmost importance on governance, transparent investor engagement, sustainability and social responsibility. The Board's balance of skills and experience continues to develop, as well as continuing maintain its high level of gender diversity, with 50% female Board members.

Growth and capital returns

Plus500's track record of delivering outstanding shareholder returns puts the Company amongst the top cohort of companies on a total returns basis within the FTSE All-Share Index, since its IPO in 2013. In that time, Plus500 has generated approximately $3.0 billion of cash from operations and returned approximately $1.9 billion to shareholders through share buybacks and dividends. In H1 2023, this trend continued, with returns totalling $347.4m, of which $120.0m in dividends and buybacks was announced today, $127.5m through the repurchase of shares executed on 13 June 2023 and $99.9m in dividends and buybacks as announced on 14 February 2023.

Shareholder returns related to H1 2023

The Board today announces a total return of $120.0m in relation to H1 2023, including a new share buyback of $60.0m, comprising of an interim share buyback programme of $33.7m and a special share buyback programme of $26.3m. In addition, a total dividend was announced today of $60.0m[12], ($0.7344 per share), comprising of an interim dividend of $33.7m ($0.4125 per share) and a special dividend of $26.3m ($0.3219 per share). Both dividends have an ex-dividend date of 24 August 2023, a record date of 25 August 2023 and a payment date of 9 November 2023.

Demonstrating the Board's confidence in the Company's prospects, its robust financial position and ability to deliver significant future shareholder returns, the Board has resolved to conduct a new share buyback programme to acquire up to $60.0m of the Company's shares, which will commence following the completion of the current share buyback programmes.

During H1 2023, the Company executed share buyback programmes, with 11,485,961 ordinary shares purchased during the period, amounting to a total of $214.1m, at an average share price of £14.93. The remaining share buyback programmes announced on 14 February 2023, as of 30 June 2023, amounted to $12.8m and will continue to run during the second half of 2023, in addition to the new share buyback programme of $60.0m announced today.

At 30 June 2023, the Company held in treasury a total of 32,582,466 ordinary shares (which are not entitled to dividends and have no voting rights at the Company's general meetings), which were purchased following the commencement of Plus500's initial share buyback programmes in 2017, representing 28.4% of the Company's issued share capital at such time (the total treasury shares held by the Company comprise the shares purchased less issued treasury shares).

FY 2023 outlook unchanged, well placed to seize the opportunities ahead

The Board remains confident about the Group's performance for FY 2023 and anticipates that Plus500's revenue and EBITDA for the current financial year will be in line with current market expectations. Plus500's market leading position, the increasingly diversified nature of its revenue streams and the strength of its customer relationships leaves the Group ideally positioned to continue scaling, while creating sustainable earnings growth and value for all stakeholders. 

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023 (UNAUDITED)

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 JUNE 2023 (UNAUDITED)

Date of approval of the condensed consolidated interim financial information by the Company's Board of Directors: 14 August 2023

Registered Company number (Israel): 514142140

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023 (UNAUDITED)

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023 (UNAUDITED)

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

NOTE 1 - GENERAL INFORMATION

Information on activities

Plus500 Ltd. (the "Company" and together with its subsidiaries, the "Group") is a global multi-asset fintech group operating proprietary technology-based trading platforms. Plus500 offers customers a range of trading products, including OTC ("Over-the-Counter" products, namely Contracts for Difference (CFDs)), share dealing, as well as futures and options on futures. The Company has developed and operates an online trading platform within the OTC sector, enabling its international customer base of individual customers to trade OTC products on over 2,500 underlying financial instruments internationally.

The Group's offering is available internationally with main market presence in the UK, the European Economic Area ("EEA"), Australia, the US, and the Middle East and has customers located in more than 50 countries worldwide. The Group operates through operating subsidiaries regulated by the Financial Conduct Authority ("FCA") in the UK, the Australian Securities and Investments Commission ("ASIC") in Australia, the Cyprus Securities and Exchange Commission ("CySEC") in Cyprus, the Israel Securities Authority ("ISA") in Israel, the Financial Markets Authority ("FMA") in New Zealand, the Financial Sector Conduct Authority ("FSCA") in South Africa, the Monetary Authority of Singapore ("MAS") in Singapore, the Financial Services Authority ("FSA") in the Seychelles, the Commodities Futures Trading Commission ("CFTC") in the US, the Estonian Financial Supervision Authority ("EFSA") in Estonia, the Financial Services Agency ("FSA") in Japan, the Dubai Financial Services Authority ("DFSA") in the UAE and the Securities Commission of The Bahamas ("SCB") in the Bahamas.

The Company also has a subsidiary in Bulgaria which provides operational services to the Group.

The Company has been listed since 2013 on the London Stock Exchange. Since 2018, Plus500 Ltd. has been a FTSE 250 listed entity, following the Company's shares being admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange Main Market for listed securities.

The Group operates in three operating sectors: OTC trading; share dealing; and futures and options on futures. The Group presents its operation as one operating segment.

The address of the Company's principal offices is Building 25, Matam, Haifa 3190500, Israel.

NOTE 2 - BASIS OF PREPARATION

Basis of accounting and accounting policies

These condensed consolidated interim financial information for the six month period ended 30 June 2023 have been prepared in accordance with IAS 34 - 'Interim financial reporting' as issued by the International Accounting Standards Board. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2022, which have been prepared in accordance with IFRS. This condensed consolidated interim financial information is reviewed and not audited.

Going concern

The Group has considerable financial resources, a broad range of financial instruments and a substantial active customer base which is geographically diversified. As a consequence, the Company's Board of Directors (the "Board") believes that the Group is well placed to manage its business risks in the context of the current economic outlook. Accordingly, the Board has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Board therefore continues to adopt the going concern basis in preparing this condensed consolidated interim financial information.

NOTE 3 - ACCOUNTING POLICIES

Significant accounting policies and computation methods used in preparing the condensed consolidated interim financial information are consistent with those used in preparing the 2022 annual financial statements, except for the following:

Income tax in interim periods is recognised based on management's best estimate of the annual income tax rate expected (see note 8).

During the six month period ended 30 June 2023, management has updated the accounting policy regarding the presentation of interest income. Accordingly, interest income is accrued based on the effective interest rate method, and is presented as part of the Group's total revenue in the statement of comprehensive income. Previously, interest income was presented as part of financial income in the statement of comprehensive income.

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued)

NOTE 3 - ACCOUNTING POLICIES (continued)

The voluntary change in accounting policy is intended to provide shareholders with better expression of its business activities and to enhance the comparability of its financial statements to its peers. The effect of this change on the consolidated financial statements in previous periods is not material for the consolidated financial statements as a whole.

NOTE 4 - TRADING INCOME

The trading income attributed to geographical areas according to the location of the customer is as follows:

NOTE 5 - SELLING AND MARKETING EXPENSES

NOTE 6 - ADMINISTRATIVE AND GENERAL EXPENSES

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued)

NOTE 7 - OPERATING EXPENSES

The presentation below reflects the breakdown of operating expenses by nature of expense:

In the year ended 31 December 2022 and the six month periods ended 30 June 2023 and 30 June 2022, IT and technology costs together with additional allocated other technological related costs, were $74.4 million, $39.8 million and $33.3 million, respectively.

NOTE 8 - INCOME TAX EXPENSES 

Law for the Encouragement of Capital Investments, 5719-1959

The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the "Investment Law", provides certain incentives for capital investments in production facilities (or other eligible assets) by "Industrial Enterprises" (as defined under the Investment Law).

New Tax benefits under the 2017 Amendment that became effective on 1 January 2017 (the "2017Amendment")

The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on 29 December 2016, and is effective as of 1 January 2017. The 2017 Amendment provides new tax benefits, as described below, and is in addition to the other existing tax beneficial programmes under the Investment Law.

The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a Preferred Technological Enterprise ("PTE") and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as Preferred Technology Income, as defined in the Investment Law.

Dividends distributed by a PTE, paid out of Preferred Technology Income, are generally subject to withholding tax at source at the rate of 20% or such lower rate as may be provided in an applicable tax treaty.

a. Company taxation in Israel

The full corporate tax rate in Israel for the years 2023 and 2022 is 23%.

Under the 2017 Amendment, provided the conditions stipulated therein are met, technological income derived by Preferred Companies from "Preferred Technological Enterprise" (as defined in the 2017 Amendment), would be subject to reduced corporate tax rates of 12%.

A Preferred Company distributing dividends from technological income derived from its PTE would generally subject the recipient to a 20% withholding tax (or lower, if so provided under an applicable tax treaty).

At the beginning of July 2020, the Company received an approval from the Israeli Innovation Authority ("IIA") that together with the tax ruling received from the ITA in May 2019, recognises the Company as a PTE for the years 2017, 2018 and 2019. Accordingly, the applicable tax rate for the preferred technological income of a PTE for these years was 12%. The Company is also considered as PTE for the years 2020 and 2021. As a result, the Company's corporate tax rate for the years 2021 and 2020 was 12%, subject to the Company complying with the conditions of the Law for the Encouragement of Capital Investments.

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued)

NOTE 8 - INCOME TAX EXPENSES (continued)

In January 2022, the Company's status as a PTE, as accredited by the ITA under the tax regime in Israel, has been extended for the years 2022, 2023, 2024, 2025 and 2026, subject to the Company complying with the conditions of the Law for the Encouragement of Capital Investments. Consequently, the Company's corporate tax rate for each of these years will be reduced from 23% to 12% and the withholding tax rate applicable for dividends will be reduced from 25% to 20%.

b. Tax assessments

The Company has final tax assessments up to the year 2019.

The assessments of amounts of current and deferred taxes require the Group's management to take into consideration uncertainties that its tax position will be accepted and of incurring any additional tax expenses. This assessment is based on estimates and assumptions based on interpretation of tax laws and regulations, and the Group's past experience. It is possible that new information will become known in future periods that will cause the final tax outcome to be different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

c. Taxes on income included in the consolidated income statement for the reported periods

NOTE 9 - 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 period.

*After weighting the effect of Company's share buyback programmes (see note 11).

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued)

NOTE 10 - DIVIDENDS

The amounts of dividends and the amounts of dividends per share for the years 2023 and 2022 declared and distributed by the Board are as follows:

On 14 August 2023, the Company declared an interim dividend and a special dividend in the amounts of $33.7 million and $26.3 million, respectively (see note 15).

*Between the dividend announcement date and the record date of the dividend, the number of issued and outstanding ordinary shares of the Company decreased as a result of the repurchase by the Company of its ordinary shares during such period and the classification of such repurchased ordinary shares as treasury shares that are not entitled to dividends. However, this did not affect the dividend per share as announced on the dividend announcement date.

NOTE 11 - COST OF COMPANY'S SHARES HELD BY THE COMPANY

The Board approves share buyback programmes. The share buyback programmes are funded from the Company's net cash balances.

During the six month periods ended 30 June 2023 and 2022, the Company issued a total of 16,143 and 14,165, respectively, of its treasury shares.

NOTE 12 - TRADE PAYABLES - DUE TO CLIENTS

* The total amount of 'Trade payables - due to clients' includes bonuses to clients.

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued)

NOTE 13 - CASH GENERATED FROM OPERATIONS

Non-cash transactions

On 14 February 2023, the Board declared a dividend in an amount of $29.9 million ($0.3234 per share). The dividend was paid to shareholders on 11 July 2023 (see note 10). In addition, $8.9 million in right of use assets and lease liabilities were recognised during the six month period ended on 30 June 2023.

NOTE 14 - FINANCIAL RISK MANAGEMENT

Financial risks arising from financial instruments are analysed into market, credit, concentration and liquidity risks. The condensed consolidated interim financial information does not include all financial risk management information and disclosures required in the annual financial statements. Details of how these risks are managed are discussed in the financial risk management note of the 2022 annual financial statements.

Further to the mentioned above, there has not been a significant change in the Group's financial risk management processes or policies since year end 2022.

NOTE 15 - SUBSEQUENT EVENTS

In July 2023, the Group obtained a regulatory licence in the Bahamas, granted by the Securities Commission of The Bahamas (SCB).

On 14 August 2023 the Board declared an interim dividend in an amount of $33.7 million ($0.4125 per share). The dividend record date is 25 August 2023 and it will be paid to the shareholders on 9 November 2023.

On 14 August 2023 the Board declared a special dividend in an amount of $26.3 million ($0.3219 per share). The dividend record date is 25 August 2023 and it will be paid to the shareholders on 9 November 2023.

On 14 August 2023, the Board approved a new programme to buy back an amount of up to $60.0 million of the Company's ordinary shares, comprised of an interim share buyback programme in the amount of $33.7 million and a special share buyback programme in the amount of $26.3 million.

[1] Market expectations based on compiled analysts' consensus forecasts, which can be found on the Investor Relations section of the Company's website. As at 7 August 2023, consensus forecasts for FY 2023 revenue and EBITDA are $614.2m and $274.9m, respectively 

[2] All figures for the six month period ended 30 June 2023, for the six month period ended 31 December 2022 and for the six month period ended 30 June 2022, included in this announcement are unaudited

[3] H2 2022 provides a more meaningful comparator versus H1 2023, given the significantly heightened volatility experienced in H1 2022 across financial markets

[4] Customer income - Revenue from OTC Customer Income (customer spreads and overnight charges) and Non-OTC Customer Income (commissions from the Group's futures and options on futures operation and from 'Plus500 Invest', the Group's share dealing platform)

[5] EBITDA - Revenue (trading income and interest income) minus operating expenses plus depreciation and amortisation

[6] Active Customers - Customers who made at least one real money trade during the period

[7] ARPU - Average Revenue Per User

[8] New Customers - Customers depositing for the first time

[9] AUAC - Average User Acquisition Cost

[10] Customer Churn: [(Active Customers (T) + New Customers (T+1)) - Active Customers (T+1)]/ Active Customers (T)

[11]  Customer Trading Performance - gains/losses on customers' trading positions

[12]  The total estimated dividend payout of $60.0m is based on 81,695,875 ordinary shares issued as at 13 August 2023. The total dividend payout will be subject to the ordinary shares that will be repurchased between 14 August 2023 and the dividend record date of 25 August 2023, which will be held in treasury and therefore will not be entitled to a dividend and the actual aggregate dividend payout will be reduced accordingly.