Plus500 suffers from high-risk investment betting crackdown
12 February 2020, 08:34
The online trading platform added it has benefited from the economic uncertainty though.
Online trading platform Plus500 saw profits plunge due to a crackdown on high-risk betting, although bosses said the recent economic volatility has helped in recent months.
The company, which offers trading across a range of simple and complex products, said profits for the year to December 31 hit 189.3 million dollars (£146 million) – down from 503 million dollars (£388 million) a year ago.
Chief executive Asaf Elimelech insisted the second half of the year improved, with revenues in the latter period of the year up 40% versus the first half.
Underlying pretax profits in the second half were also up 93% compared with the first and net profit was also up 94%.
He added: “We finished 2019 in good financial and operational shape following a period of changes for the industry, which has provided a more certain regulatory outlook for Plus500 and the industry as a whole.
“We were particularly pleased with the strong improvement in financial performance in the second half of 2019 and believe that customer trading patterns have now adjusted following the regulatory changes introduced in Europe last year.
“We continue to monitor and prepare for any potential product intervention measures that are expected to take place in Australia during 2020.”
The rule changes were introduced to clamp down on high-risk betting – limiting it to experienced and professional investors and warning amateur investors they are likely to lose their money.
Despite the falls, the company also announced plans for a 30 million share buyback – which will see the company buying shares on the open market, which should boost the share price as few shares are in circulation.