© Reuters. FILE PHOTO: Traders look at financial information on computer screens on the IG Index trading floor
By Muvija M and Priyanshi Mandhan
(Reuters) – Online trading platform Plus500 (LON:) said on Wednesday it would pay almost $30 million in special dividends and buy back $25 million in shares as it reaped the profits of small-time traders making record bets on financial markets.
But a suggestion that revenue in the current year may not match up to the $872.5 million Plus500 recorded for 2020 dragged shares lower by 2.2% by 0853 GMT. A company-supplied consensus forecast pegged this year’s revenue 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,” Plus500’s Chief Executive David Zruia told Reuters.
The company still expects the revenue to grow from “more normalised levels” it saw in 2019.
It reported a 146% surge in profits in 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 lockdowns bet heavily.
A frenzy around GameStop (NYSE:) and a number of other U.S. stocks has also shone a light on Plus500 and European rivals, 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 stoke volatility on stock, commodity and currency markets.
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.
“A number of market trends emerged and had an influence on the performance of the company during the year,” Plus500 said in Wednesday’s results release.
The company, which offers more than 2,500 financial instruments, including equities, indexes, commodities, options, foreign exchange and cryptocurrencies, said new customer sign-ups rose to 294,728 from 91,388.
“The record FY20 results are due to more than just favourable market conditions,” Liberum analysts wrote in a note.
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