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UPDATE 1-Plus500 profit tanks, regulatory threat looms in Australia

Published 13/08/2019, 04:45 pm
© Reuters.  UPDATE 1-Plus500 profit tanks, regulatory threat looms in Australia
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Aug 13 (Reuters) - Online trading platform Plus500 Ltd PLUSP.L reported a slump in first-half earnings, citing financial markets that were "very stable" which it said limited trading opportunities for investors even as it signed on new customers.

The company, which has been hard hit by a regulatory clamp-down in Britain and the European Union on certain complex financial products, said on Tuesday that the Australian securities watchdog had received new powers to address any abuses in the sale and marketing of a range of such complex products.

Plus500's net profit fell to $51.6 million for the six months ended June 30 from $117.3 million a year earlier, partly hurt by low levels of volatility in the markets earlier in the year when investors held back their positions amid the U.S.-China trade wars and Brexit uncertainty.

"The group performed well during what was a difficult period for the entire industry. Financial markets from February 2019 to April 2019 were very stable, providing a limited number of trading opportunities for customers," Chief Executive Officer Asaf Elimelech said.

Plus500 said it was on track to meet current expectations for 2019 and announced plans to buy back up to $50 million of its shares. It also revised its distribution policy to return 60% of net profit to shareholders, with at least 50% of that through dividends.

The company, which competes with IG Group IGG.L and CMC Markets CMCX.L , reported a 19% jump in new customers to 47,540 in the first half compared to the second half of last year.

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