Online trading firm Plus500 recently announced its new plan to launch share buyback after enjoying a positive start to 2022. Although the profits of Plus500 dropped marginally, it still feels like the company is optimistic about good growth in the near future.
Plus500 enjoyed a sudden rise in online trading thanks to rising in online retail trading during the pandemic. However, that effect has started to grow out, which is also seen in the profits of Plus500.
For 2021, the pre-tax profit of Plus500 was $387 million, which is almost 25% lower than the value of $523 million reported in 2020. In total, the drop in the revenue was 18% which can be attributed to the end of the pandemic trading boost.
However, the active customer base of Plus500 is still 2x than what it was in the year 2019.
According to David (CEO of Plus500), the company enjoyed another year of excellent performance and is hopeful that this year will also be a good one. In total, the planned share buyback program will be worth around $55 million.
The company plans to use this opportunity to highlight that the Plus500 board is very confident about the positive prospects and the healthy financial position of the company.
Besides the share buyback program, the company has also planned to pay $60 million worth of dividends to the shareholders.
Without any doubt, this will send a good signal to the shareholders about the stable financial situation of the company and will also boost the stock outlook.
After this news of the dividend and share buyback program, the shares of Plus500 dropped to 14.60 (around 4%), which is normal under conditions like these.
If we look at the figures from the financial year 2021, it becomes clear that the company had a healthy cash balance, and its customer base also improved. However, the company will have to work on its profitability as that took a dive this year when compared to the results from 2020.
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