Yes, offloading 6% of P500 stock at a slight discount has hardly dented demand. At the same time institutions have been taking profits in smaller slices. Kind of disappointed, a bigger dip would have tempted me to add.
Announced after close of play yesterday, completed before open today. I suppose that takes out the possibility of spooking.
Didn't P500 buy back around this much stock last year? No announcement of a further buy back despite being awash with cash, perhaps a sign that we are nearer fair value territory now.
Two chunky buys at £20M and £12M catch the eye. An equity income IT manager looking for 7% yield or smaller cos growth IT manager looking for 40% pa growth prospects ... I would have thought anyone looking to stake build or take P500 over has missed the boat by now? Unless of course someone wants to offer me £30?
144.79c dividend at current 1.40/GBP fx gives £1.04/share divi.
Whether one has applied for rebate of Israeli WHT or not will give a take-home of roughly 78p or 88p.
Assuming within ISA or divi allowance, and based on at-time-of-writing mid-point of 1118p, this gives a divi corrected share price of 1196p or 1206p, or about 3% below historic high.
Only downside to results was lower average revenue per user, but more than compensated by increasing number of new and active users and far cheaper user acquisition cost.
This still looks very cheap to me based on reduced near-term regulatory threats and the increasing number of markets being licenced, thus increasing revenue and reducing exposure to mid-term regulatory changes in individual countries.
the trading slice in my AJBell pot at 1230p for a 10% gain in a week, and moved on to ALFA hopeful of another quick return. Still a big fan confident of progress to come so I am keeping the rest of my P500 stake for the dividend and the prospect of 1500p later in the year, but I also need to trade hard to repair the damage done by the last few weeks of madness where the signs of recovery have not yet reached my core holdings.
I think shares weak today due to potential placing of certain founders' stock. Last November, Liberum attempted to place 7m of the holdings of founders and certain directors at around 850p and this was all aborted due to price weakness. Today's spectacular results provides ideal background for such a placing. You wouldn't want to buy any today until likelihood of a maybe £90m dump has been resolved.
Re your concern with the 25% Israeli withholding tax, I have always managed to reclaim 10% from Israel through the services of ESOP and obtain full UK tax relief from the 15% balance. You have to obtain a signed confirmation from your UK tax office that you are a UK resident and tax returns all submitted etc , but once this is set up, not too difficult to obtain all subsequent refunds.
I am in since August and topped up from time to time. This is share is still cheap and I just topped up again.
The dividend is great. And they have $241.8m net cash. This share is, in my opinion, pretty safe from any market downturns because PLUS made it clear that they would start a share buyback programme any time they think it would make sense:
"The Board has undertaken buybacks in the past and has the power to implement them at short notice. It will continue to consider share buybacks taking into account market conditions, share price, trading volume and other factors."
So with all the free cash this statement provides a very good protection against any huge fall of the share price in my opinion.
The $200M net profit is where previous signals had indicated but how nice to see it for real. I hate it when updates refer to expectation without saying what that is! My bold view is $300M earnings in 2018 on revenues $550M.
News of momentum was hoped for, echoing comment in last weekend's papers ... the burst of activity caused by Bitcoin et al has stimulated trading and more sign ups, and recent weeks of market volatility has redoubled that effect.
The sp settling back from a deserved spike over 1300p this morning is disappointing, lots of little sells so I wonder if it is private investors taking a gain to repair the bad in their portfolios right now. I agree with Liberum that P500 fair valueis heading over 1500p. Subject to studying the detail in the report Hold and maybe even look to add again.
The cherry on the icing on the cake is a dividend of around 78p after allowing for the awful 25% Israeli witholding tax. Really long fuse though, not paid until 23 Jul and depends on GBP:USD. Repeated commitment to distributing free cash flow to investors, what can you do with zero debt, zero intangible assets, tiny operating costs, cash positive growth ... how else do you defend against a predatory approach?
Surprised P500 does not appear as a major holding in more small-cap and equity income portfolios.
I wish that all of my investments performed as poorly as Plus.Excellent Results,fantastic cash flow,massive increase in dividends & as early as today our CEO is prepared to commit to 2018 trading expected to exceed expectations - he has not previously been prone to hyperbole !
My only regret is that I didnt but more when I first bought around 130p.
To celebrate the arrival of cash into my new AJBell Dealing account this morning, first trade adding to Plus500 holdings for what will hopefully be a pretty quick win. More good news about development of target markets this morning, hopeful next week's results will put impressive numbers to uprated guidance and spice up the sp. 1250 maybe.
A good start with AJBell, generally easy platform the red is a bit alarming, still learning the navigation between trade and research, and (so far, touch wood) pretty responsive customer service from three different agents.
See why IG execs have been so snappy, 4% yield on sp roughly flat over 2 years and earnings growth rolling along at +10% pa. Focussed on a narrow market which is expensive to service with limited room to grow. Only now have they thought about a strategy to expand. No wonder market and broker response to their interims today has been muted.
Meanwhile our red neck Israeli chums have built a really neat platform, cleverly marketed a simple service to retail punters in an expanding number of markets, and operate successfully on what looks like a skeletal staff. They must be really really good and tremendously hard working people. It may have to up its admin and overheads but it seems to be positioned and has regulatory requirements in mind.
Gone are the days 2 and 3 years ago where FT Alphaville devoted an enormous amount of time to criticising this upstart mostly on the grounds that it looked too good to be true, because it couldn't figure out how P500's business model worked and why it was so successful, and so questioning that it may not be ethical or properly governed or honest. Actually Plus500 did need to do some catch up work to get on the right side of compliance issues, but then the rule makers were doing just that ... making up the rules. Still are in fact.
And some of the early management attitude was appalling - we are doing ok because we haven't had a major complaint and we haven't been sued yet. Fortunately those people haven't been in charge of late, brilliant programmers nonetheless.
Not sure I understand the business in the detail, but I am satisfied this is not a flash in the pan and is not a dodgy scheme. P500 have found a neat way of profitting from the enormous retail appetite for speculative trading ... punters gambling on price movements in things like foreign exchange, like other people bet on horses or poker. On the whole I think P500 make their money from transaction fees and margins in the spread rather than book making per se, but there are probably balancing of positions and hedging in the background.
Punters lose money, actually a large number lose quite a lot, mostly to each other. Gambling is ruinous we know. It is not a pick on moral or ethical grounds. I have had a play with the P500 demonstrator and it is terrifying how quickly you can get caught out even when you think you have a safe idea on where, say, oil or gold prices are heading. Way too exciting for me.
A knee jerk reaction to ban all crypto currency trading would be just that, like banning gambling because people bet. A ban would affect everyone. Much better that the regulator concentrates on things like small stake or trading limits for non-professionals, restricting leveraged losses so you can't lose more than your stake, controlling how services are marketed (it is not investing, not even trading, it is betting) so no trashy get-your first-£10-free type of deals, and safeguarding procedures for how new clients are taken on who may be vulnerable, proper money laundering controls etc Just like any other gambling operation. So far without the super-taxes, just virtually unrecoverable Israeli witholding tax at rates in excess of international tax treaty conventions.
Meanwhile P500 sp has surged on earnings growth running at about +30% pa while also delivering 6%+ dividends. Much more in the pipeline. And to rub salt in IGs wounds the board and shareholdrs have just voted the CEO and CFO a splendid bonus ... dare I say it one that seems well deserved.
Going forward to remain as an investor I would be pleased if Plus500 cemented its good fortunes by embracing the concerns of the regulators. Why not be seen to take issues seriously, not just make the right noises actually take pre-emptive steps to enhace controls customer care services and safeguarding procedures, put the right sort of city types in place to deal with city issues, work on some goodwill projects.
An odd press release from Numis on behalf of IG yesterday in response to the Dear CEO public letter about CFD trading concerns (which IG clearly received) in which it said it was largely unaffected and repeated its view that it is more likely that P500 with its "lower class" customer profile would be more heavily affected.
A helpful response from P500 followed, in which it points out that the conduct issues covered by the Dear CEO letter were not relevant to its business model, and in fact Plus500 had not been included in those addressed by the letter. P500 resisted any temptation to comment on anyone else's position.
Pretty disgraceful from Numis and IG (again). I would be considering a "cease and desist" letter of my own to them if I were general counsel at P500.
Well even as good days go that was one and a half. Congratulations to everyone who ignored last month's hiatus and blocked the twerp last Summer shorting this back down to 600p.
My instinct is that we will see the sp up to £12.50 by or when the financial results released late Feb turn this latest super trading update into hard numbers and dividend. I might even add a few on that prospect.
£15 on the next trading update expecting it to show spectactular business growth has not been stalled by regulatory strictures.
Do not be spooked into selling this money maker too early unless you have an even better prospect of a 50% return in the next few months.
Bitcoin's rollercoaster ride powers online trading firm Plus 500
Rising interest in crypto-currencies such as Bitcoin led online trading firm Plus 500 to hit a record number of new customers in 2017
3 January 2018 12:07pm
A surge in the popularity of Bitcoin and other cryptocurrencies led online retail investment firm Plus 500 to hit a record level of quarterly sales at the end of 2017.
The company said it had seen increased interest in the investment products it sells that are linked to cryptocurrencies, as interest in the asset class grew among private investors.
Bitcoin in particular grabbed the attention of currency speculators globally last year after hitting $19,187 in December on the back of a 1,800pc rise compared to the start of 2017.
The cryptocurrency's heady rise and subsequent large fall to $13,472 has been beneficial to Plus 500, as its contracts for difference - or CFDs - allow traders to speculate on the rise or fall of an individual security without actually owning it. This means Plus 500 customers could have backed Bitcoin to fall from its 2017 highs without having to buy any of the cryptocurrency.
As well as reaching an unspecified record quarterly revenue at the end of 2017, Plus 500 said its 246,000 (2016: 104,432) new customers for the year as a whole was also the highest it had achieved.
The comments, which came as part of a short trading update from the company, mean it now expects sales and profits to be ahead of market expectations.
Investors in Plus 500 reacted positively to this, sending its shares up more than 16pc in early trading to £10.27.
Asaf Elimelech, chief executive of Plus500, said the company had started offering trading in cryptocurrencies in 2013, but that interest had risen in 2017.
The update tops off a strong 2017 for the business, which announced a $10m scheme to buy back some of its shares in June and a more than doubling of net profits in the six months to June, as well as a surge in new clients and an increase in existing customers' trading activity.
Plus 500 will publish its full results before the end of February, the company added.
I have read the reports again and commentaries this morning. My real effect is that nervous investors have been tipped into taking their profits before Christmas.
P500 may only be slightly affected by any new restrictions, hence the reasssurance from Liberum. Numis are scathing and think P500 will really suffer while preferring IG's outlook. It is hard to know who to believe.
P500 have a CFD business model which already largely addresses concerns raised by ESMA and are unaffected by binary trading rules since this is not their game. On which basis P500 continues to have fresh licenses awarded to trade in new geographic markets.
The only vulnerabilities in P500's current business model are with bonus incentives and trading inducements to retail investors, and maybe how it does some of its advertising in the CFD space. The changes it needs to make and the potential consequences for the business are slight, underlying growth prospects remain stellar as it expands markets.
My take is that the impact of restrictions could be far harder on the likes of IG who are bleating about it, while P500 are supportive of the ESMA regulatory changes.
A corporate sale by a founder of a large stake which is value-priced (on my projection of forward earnings and dividend) is possible, actually I expected a full buy-out approach attracted by cash generation ... if you were Global Finance Inc why leave your investment under outside control in a country with difficult political and tax-withholding issues.
So the rumour of a stake sale is quite believable ... but the idea that such a move has stalled because of an argument on price from 980p to 940p is not credible, especially as we have dipped below that price point. More likely we are seeing an open market over-reaction to renewed publicity and regulatory concern about financial "brokerage" of binary betting being a ruinous form of gambling.
And ordinary investors sitting on huge paper gains cashing in this year's sp progress. My year end target was 900p+ and here we are still.
The effect of (results and) the previous buy back which ran through August was a powerful improvement from 650p through 800p. I don't know what caused further momentum to peak at 1050p three weeks ago, appreciation of good value and prospects? But it suggests that announcing a further buy back would see us back there. Given that free cash will have continued to roll in and given investors' dislike of the witholding tax, another buy back could well be imminent. Stellar results and an increased bumper final/special dividend next Summer would not surprise me either.
A buy back after Christmas maybe, we don't get results until February but I wonder if they might run a buy back ahead of financials again?
My feeling is to hold for £12 by next Easter wth a 50p+ net div to go with. And that will still be cheap compared to a £15 fair value price.
Plus been plunging due to attempt by founders to sell around 7m shares last week. Placing aborted due to price disagreement. Regrettably this overhang will probably hold price back until cleared.
<b><i>Today's Q3'17 IMS is very strong and once again proves the resilience of the business in what has been a year characterized by increased regulation in Europe. The regulatory barriers could increase further in CY18 as ESMA is due to issue new guidelines in Q1'18. Consequently, we continue to err on the side of caution in relation to our own forecasts but given performance to date, we would not be surprised to see a continuation of the positive trend.</i></b>
BUZZ-Plus500: Touches record high on robust Q3, outlook
* Spreadbetting firm Plus500 up 4.5 pct at a life high and best performer on the FTSE Aim Financial Services Index <.FTAXX8700S>
* Sees FY results ahead of market expectations [nL4N1N250T]
* Reports higher Q3 revenue as rising customer numbers help offset challenges from a sector-wide regulatory clampdown
* Says growth opportunities and lean cost structure are expected to assist in mitigating the impact of any regulatory changes
* Plus500 provides CFDs, which allow people to bet on moves in share prices without having to buy the underlying stock. However, regulators have been tightening controls on the fast-growing 3.5 bln stg spreadbetting industry [nL5N1E11M0]
* "Q3'17 IMS is very strong and once again proves the resilience of the business in what has been a year characterized by increased regulation in Europe," Liberum analysts say
* Liberum analysts raise FY revenue estimates to $385 mln, and EBITDA by 10 pct to $230.9 mln
* Co reported revenue of $327.9 mln and $151 mln in EBITDA for FY 2016
* Stock up 169 pct this yr
Melrose Industries have a fantastic track record of profit sharing. Really great results from PLUS today - as expected - which bodes well for future returns. I'm holding but buying more if the SP dips below £10.
Yet another fantastic update. This company is a money factory, and very shareholder-friendly. I dont know if/where I have seen such capital and earnings profits returned to shareholders in any other company. I cant think of one.
Honestly, all I hope for is an update that supports the same story the chart you posted is telling. And while Im wishing, perhaps an increased focus on share buyback, which doesnt incur the 25% theft on value returned to shareholders that the divi is subject to.
I definitely would not want the company to be taken over as a new owner would surely not have the same policy of returning 60% of profits to shareholders that the current leadership has. Well, unless the company was bought for 20 quid a share and then I might feel different! Probably not on the cards though.
Reporting day next Tuesday - I would hope for notice of application for full listing for PLUS and the divi to be exempted from Israeli taxation. I'd also hope there are other companies sniffing around PLUS' territory, looking for a slice of the action, perhaps with a takeover in mind? Strong performance over the last 2 months, investors are becoming aware of PLUS' presence - the adverts are all over the place! Some of the reviews are disappointing, but to give credit to the company, they do respond and explain the situations in some detail. Shorters seem to have disappeared off the radar, thankfully.
I'd agree, OldJoe, this is a Strong Buy up to next Tuesday when it will all become clear. GLA.
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