Retail foreign exchange and CFDs trading provider Plus500 has announced a share buyback program worth $10 million. The company will finance the purchases of its own stock via its net cash balances that as of the 31st of May stood at $191 million.
The proposal has been amongst 11 resolutions which the board of Plus500 approved at its annual shareholders meeting. The board also reaffirms its base 60 percent pay-out ratio dividend policy, expressing confidence in the firm’s business model and its ability to convert revenues into cash-flow.
The company will continue to be able to pay special dividends or expand the buyback program whenever it generates surplus cash.
Liberum Capital Appointed as Intermediary
The purchases of Plus500’s own stock will be conducted by the company depending on market conditions, contingent on share price, trading volumes and other variables. Liberum Capital Limited has been appointed to run the buyback program.
Plus500’s buyback program will run over three months, ending on the 31st of August 2017. The effort is limited to a maximum of 11,488,837 shares which is 10 percent of the company’s issued share capital.
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Plus500 will pay out $75 million in dividends in July. Those are part of the firm’s current cash coffers of $191 million as of May 31st.
Commenting on the announcement, the CEO of Plus500, Asaf Elimelech, stated: “We are pleased to announce the start of a share buyback program, which will be funded from our significant cash resources. Together with the substantial dividend payments due to be paid in July, our cash generative business model is enabling us to provide good shareholder returns despite current regulatory uncertainties.”
Just before the open of trading on the London Stock Exchange, shares of Plus500 are quoted at £5.19. At present exchange rates the firm has committed about £7.8 million for the effort, which in theory is enough to purchase 1.5 million shares. The current average daily volume of Plus500 shares traded via the LSE is 508,646.
Plus500 Expects FCA Regulatory Measures Impact in H2 2017
In its announcement the company also provided a short trading update, outlining that the current trends in terms of client activity are positive. Plus500 expects stronger revenue and stable margins when compared to the first quarter of 2017. The news comes despite a decline in volatility.
The retail broker also highlights that while no material effects are expected from regulatory changes in Europe, the company is expecting the results from the FCA’s consultation to possibly affect the second half of 2017.