17 August 2021

Plus500 Ltd.

("Plus500", the "Company" or together with its subsidiaries the "Group")

Interim results for the six month period ended 30 June 2021

Plus500, a global multi-asset fintech group operating technology-based trading platforms, today announces its interim results for the six month period ended 30 June 2021.

Significant positive financial and operational momentum achieved in H1 2021, with performance ahead of pre-pandemic levels:

-       Group revenue of $346.2m (H1 2020: $564.2m; H2 2020: $308.3m)

-       EBITDA¹ of $187.6m (H1 2020: $361.8m; H2 2020: $154.1m)

-       136,980 New Customers² onboarded (H1 2020: 198,176; H2 2020: 96,552)

-       Further increase in base of Active Customers³ to 333,940 (H1 2020: 328,409; H2 2020: 278,566)

Further attractive returns delivered to shareholders:

-       $60.0m interim dividend declared today, representing $0.5921 per share

-       New share buyback programme of $12.6m announced today

-       $42.5m invested in two share buyback programmes completed during the period

-       Enabled by continued strong operating cash conversion⁴ of 87%, with cash balances of $722.5m at the end of H1 2021 (H1 2020: $587.8m, H2 2020: $593.9m)

Entry into Futures and Options on Futures market in the US - a major growth opportunity for Plus500:

-       Enabled through acquisition of Cunningham Commodities LLC. ("Cunningham"), a regulated Futures Commission Merchant, and Cunningham Trading Systems LLC. ("CTS"), a technology trading platform provider, completed in July 2021 and integration already underway

-       Provides immediate access to the significantly growing, but under-penetrated, US retail trading market in futures and options on futures, with global addressable market estimated to be approximately $2 billion⁵ 

Significant milestone achieved through launch of new 'Plus500 Invest' share dealing platform in Europe:

-       Available initially in selected geographies from July 2021, with further roll-out across Europe planned for remainder of H2 2021

-       Presents important additional revenue opportunities and helps to drive customer retention through wider product choices for customers  

Focus on continued transition into a global multi-asset fintech group:

-       Supported by further investment in Plus500's technology platform, including incremental R&D investment of approximately $50m over the next three years, including establishment of new R&D centre, to drive scale and innovation

-       On-going focus on targeted bolt-on acquisitions to diversify product portfolio and expand geographic footprint

Further improvements in governance and risk management approach:

-       High calibre new Chairman (Prof. Jacob A. Frenkel) and two new Non-Executive Directors (Ms. Sigalia Heifetz and Ms. Tami Gottlieb) appointed in H1 2021 to complement the existing skill set and expertise of the Board of Directors of the Company (the "Board") and to further diversify its composition

-       Implementation of focused targeted hedging to reduce market risk, as appropriate

Given the significant positive momentum achieved, the Board is increasingly confident about the outlook for Plus500:

-       The Board expects revenue to be significantly ahead of current compiled analysts' consensus forecasts⁶, with sustainable growth to be delivered over the medium to long term 

Financial Highlights:

*Unaudited

Operational Highlights:

*Unaudited

David Zruia, Chief Executive Officer, commented:

"Plus500's outstanding performance in H1 2021 was driven by the ability of our technology to capture the current market opportunities and to consistently provide high service levels to our customers.  

"We are also delighted to have made significant progress in delivering on our vision to become a global multi-asset fintech group, with the acquisition of Cunningham and CTS, which brings access to the substantial futures and options on futures market in the US and the recent launch of the 'Plus500 Invest' share dealing platform in Europe. Both investments help us to diversify our range of products and further broaden our geographic footprint.

"Future growth will be delivered through continued organic investments in our business, our technology and targeted bolt-on acquisitions to further expand our CFD offering, launch new trading products, introduce new financial products and deepen engagement with our customers. Having increased our expectations for the outlook for the Group, the Board is increasingly confident that Plus500 will continue to deliver further growth and consistent levels of cash generation over the medium to long term."

Investor/analyst conference call:

Plus500 will host a conference call for analysts at 9.00 a.m. UK time today. Please contact MHP Communications to register for the call on +44 20 3128 8591 or plus500@mhpc.com. The presentation materials will be available today at www.plus500.co.uk/Investors/CompanyReports.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. 

1 EBITDA - Earnings before interest, taxes, depreciation and amortisation

2 New Customers - Customers depositing for the first time                                                                                                       

3 Active Customers - Customers who made at least one real money trade during the period

4 Operating cash conversion - Cash generated from operations / EBITDA

5 Source: Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, Intercontinental Exchange, Futures Industry Association and internal estimates. This figure is approximate

6 Compiled analysts' consensus forecasts can be found on the Investor Relations section of the Company's website

7 ARPU - Average Revenue Per User

8 AUAC - Average User Acquisition Cost

About Plus500

Plus500 is a global multi-asset fintech group operating technology-based trading platforms. Plus500 offers customers a range of trading products, including Contracts for Difference ("CFDs") and share dealing, as well as futures and options on futures in the US.

The Group retains operating licenses and is regulated in the United Kingdom, Australia, Cyprus, Israel, New Zealand, South Africa, Singapore and the Seychelles and through its CFDs product portfolio, offers more than 2,500 different underlying global financial instruments, comprising equities, indices, commodities, options, ETFs, foreign exchange and cryptocurrencies. Customers of the Group can trade CFDs in more than 50 countries and in 30 languages. Plus500 does not permit customers located in the US to trade CFDs.

In 2021, the Company acquired Cunningham, a Futures Commission Merchant, and CTS, a technology trading platform provider, both of which operate in the futures and options on futures market in the US, enabling Plus500 immediate access to that sizable and growing market. Also in 2021, the Company launched a new share dealing platform, 'Plus500 Invest', across a number of product offerings, including a wide range of financial instruments comprising of the world's most popular equities and ETFs, listed on major exchanges worldwide.

Plus500 does not utilise cold calling techniques and does not offer binary options. Plus500's trading platforms are accessible from multiple operating systems (Windows, iOS, Android and Surface) and web browsers. Customer care is and has always been integral to Plus500, as such, customers cannot be subject to negative balances. A free demo account is available on an unlimited basis for CFD platform users and sophisticated risk management tools are provided free of charge to manage leveraged exposure, and stop losses to help customers protect profits, while limiting capital losses.

Plus500 shares have a premium listing on the Main Market of the London Stock Exchange (symbol: PLUS) and are a constituent of the FTSE 250 index. www.plus500.com

Forward looking statements

This announcement contains statements that are or may be forward-looking statements.  All statements other than statements of historical facts included in this announcement may be forward-looking statements, including statements that relate to the Company's future prospects, developments and strategies. The Company does not accept any responsibility for the accuracy or completeness of any information reported by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions express by the press or other media regarding the Group. The Company makes no representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication. Forward-looking statements are identified by their use of terms and phrases such as "believe", "targets", "expects", "aim", "anticipate", "projects", "would", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions.  The forward-looking statements in this announcement are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.  Factors that may cause actual results to differ materially from those expressed or implied by such forward looking statements include, but are not limited to, those described in the risk factors.  These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such entity and the environment in which each will operate in the future.  All subsequent oral or written forward-looking statements attributed to the Company or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. Each forward-looking statement speaks only as at the date of this announcement.  Except as required by law, regulatory requirement, the Listing Rules and the Disclosure Guidance and Transparency Rules, neither the Company nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Review of H1 2021 Results

Highly attractive market environment for Plus500

The unique market environment, which emerged during early 2020, and the sustained levels of volatility that it produced across global markets, has driven an unparalleled number of opportunities for customers to trade.

This highly attractive market environment has continued into 2021 and is a significant potential driver of growth and value for the Group, for its customers and for its prospective customers, including the new and emerging generation of traders with a technology-focused attitude to trading and investment.

Driven by the strength and adaptability of its technology, Plus500 has the ability to access the significant market opportunities that are currently available to it, with a broad and diversified product portfolio across a number of asset classes, supported by best-in-class product execution and platform delivery.

This is supplemented by Plus500's proprietary marketing technology, including big data optimisation techniques and artificial intelligence initiatives, driving greater customer accessibility via digital channels, with Plus500's technology-based approach ensuring the Group is extremely well placed to continue to serve its existing customers and to attract more new customers.

Plus500 continues to lead the industry across the mobile and tablet space, replicating the same customer experience across devices. Over 82% of the Group's CFD-related revenue was generated from mobile or tablet devices with more than 78% of CFD-related customer trades took place on mobile or tablet devices in H1 2021 (H1 2020: over 80% of revenues with more than 70% of customer trades). As a result, and reflecting Plus500's technological capability and flexibility, the Group is able to address directly the emerging, increasingly technology-focused, generation of traders.

Furthermore, the Group has continued to manage successfully heightened trading volumes, supported by its technological capabilities and its skilled and dedicated employees.

Continued strategic progress towards our transition to becoming a global multi-asset fintech group

During H1 2021, the Company made further progress in delivering against its new vision to evolve as a global multi-asset fintech group, supported in particular by further investment in Plus500's market-leading proprietary technology platform as well as continued execution of targeted bolt-on acquisitions.

The Company's organic investments programme includes an incremental investment of approximately $50m over the next three years in its R&D capability designated to develop new products, features and services, drive innovation and scale its technology platform. This investment is primarily focusing on the Company's newly established R&D centre in Tel-Aviv, Israel, where highly skilled engineers, programmers, web designers and product managers have already been recruited in H1 2021.

Through this approach of organic investments and targeted acquisitions, as well as potential strategic partnerships, the Company aims to access future growth by:

-      Expanding its CFD offering geographically in new and existing markets;

-      Launching new trading products;

-      Introducing new financial products; and

-      Deepening engagement with customers.

This approach ensures that the Group can continue to successfully retain its customers, by offering them a wide range of products and services, and to attract new customers and enter new geographies.

On 19 July 2021, a major strategic landmark for Plus500 was achieved through the completion of the acquisition in the US of Cunningham, a regulated Futures Commission Merchant, and CTS, a technology trading platform provider, originally announced in April 2021. This acquisition represents a major growth opportunity for Plus500, by instantly expanding its geographic footprint and product offering in the significantly growing, but under-penetrated, US retail trading market in futures and options on futures, with the global addressable market estimated to be approximately $2 billion¹. 

The acquisition, for which integration is already underway, enables Plus500 to leverage its best-in-class technology to drive market access for the millions of potential US customers looking for new trading opportunities, through a wide range of asset classes.

Another major milestone in executing against this vision was also achieved in July 2021 with the launch of 'Plus500 Invest', the Company's new share dealing platform, initially in selected geographies in Europe and across a number of product offerings, including a wide range of financial instruments comprising of the world's most popular equities and ETFs, listed on major exchanges worldwide. Plus500 will continue rolling out 'Plus500 Invest', to ensure the further expansion of the Group's product range and geographic footprint, and to provide customers with additional product optionality.

Plus500 will continue to make organic investments and to execute additional targeted bolt-on acquisitions, as well as potential strategic partnerships, in the future, to help facilitate its strategic objectives, with a view to further driving its position as a global multi-asset fintech group.

Further development of the Plus500 technology stack

Plus500's market-leading technology allows the Company to respond with agility to customer requirements, fast emerging market developments and regulatory changes. To ensure the Company continues to retain this edge, the Company will incrementally invest approximately $50m over the next three years in its R&D capability, as outlined above. 

There was further investment in the Company's systems architecture during the period, which has remained highly resilient to support customers' requirements. This included the continued implementation of Google Cloud Services to provide further flexibility, security and scale to the platform, additional server capacity and redundancy, as well as enhanced data analysis, data processing and business intelligence capabilities.

During H1 2021, there was much focus on ensuring that 'Plus500 Invest' was aligned with the advanced and intuitive characteristics of Plus500's existing CFD offering, ahead of its launch in July 2021. This included ensuring that the Web App product was fully mobile compatible, providing a user interface consistent with the existing CFD trading experience, offering a wide range of financial instruments for customers to trade, supporting the new 'Plus500 Invest' product with an appropriate and attractive pricing structure, providing advanced charting and analysis tools, offering an optimised customer support and ensuring a streamlined on-boarding process. Additional features are being developed and will be included in the product offering, as it is rolled out across various platforms (such as iOS and Android) and new geographies.

The Group delivered a consistently high level of service for customers during the period, during which time heightened levels of trading volumes and platform usage were being managed by the Group's technological infrastructure.

Plus500 continues to invest in targeted marketing technology initiatives to further drive customer acquisition and retention.

Plus500 maintained a relatively high level of investments in these initiatives in H1 2021, including big data optimisation and artificial intelligence programmes, to access the substantial opportunities available to on-board New Customers at an anticipated attractive return-on-investment and to drive further retention.

This unique and wholly-owned marketing technology remains a fundamental driver to the prospects and performance of the Group, driving customer retention and cohort value over the long term.

1 Source: Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, Intercontinental Exchange, Futures Industry Association and internal estimates. This figure is approximate

Another strong period of operational performance during H1 2021

The Group's positive momentum during H1 2021 was evidenced by another very strong period of customer acquisition, with the Group onboarding a total of 136,980 New Customers in H1 2021 (H1 2020: 198,176, H2 2020: 96,552), including 47,574 in Q2 2021 (Q2 2020: 115,225). This compares to 91,388 New Customers on-boarded in the pre-pandemic environment of FY 2019.

This performance reflected the Group's on-going success in onboarding a substantial number of New Customers through continued significant investments in the Company's marketing technology, to drive attractive return-on-investment.

In addition, there was a continued high level of activity within the trading platform driven by an Active Customer base which has grown significantly over the last few years. The number of Active Customers in H1 2021 was 333,940 (H1 2020: 328,409, H2 2020: 278,566), including 209,465 in Q2 2021 (Q2 2020: 264,557). This figure also includes previously dormant customers which returned to the Plus500's trading platform during the period, and compares to 199,720 Active Customers during FY 2019.

This has been delivered as a result of Plus500's increasing focus on customer retention in recent years, while at the same time driving brand awareness, with an ambition to deliver consistently deeper customer engagement over time.

Customer Churn¹ in H1 2021 returned to more normalised levels of 29.3% (H1 2020: 8.3%, H2 2020: 44.6%), including 40.0% in Q2 2021 (Q2 2020: 23.0%), following the unprecedented environment in the prior year. This compares to Customer Churn of 64.4% in FY 2019.

To highlight the long-term value creation being delivered by Plus500's business model, around $348m of revenue has been delivered over the last 3.5 years from customers who registered in 2018, following marketing investment of $125m in that year. This represents a 2.8x return on initial marketing investment, clearly demonstrating the long-term revenue opportunities to be derived from Plus500's operating model.

Client deposits remained high in H1 2021 at $1.1 billion (H1 2020: $1.7 billion, H2 2020: $1.2 billion), highlighting the continued confidence of customers in Plus500.

Customer loyalty remained high, with 31% of the Group's H1 2021 revenues derived from customers trading on the trading platform for more than three years (H1 2020: 27%) and 14% for more than five years (H1 2020: 12%).

ARPU remained resilient at $1,037 in H1 2021 (H1 2020: $1,718, H2 2020: $1,107), including $683 in Q2 2021 (Q2 2020: $936). As evidence of the long-term value of the Group's customer base, the cumulative average revenue from Active Customers who first started trading during 2015 was approximately $5,000 as at the end of H1 2021.

AUAC was $622 in H1 2021 (H1 2020: $634, H2 2020: $988), including $903 in Q2 2021 (Q2 2020: $634), supported by high levels of historic marketing technology investment, advanced marketing technologies employed by the Company during the period and Plus500's continued strong brand presence.

While AUAC is relatively low, compared to historic periods, it is expected to rise steadily over time, as previously highlighted, as the Group's customer profile continues to shift to higher value customers and as the Company starts to invest in attracting customers to the new products in its portfolio, in particular futures and share dealing, as well as targeting customers in strategic geographies.

[1]1 Customer Churn - [(Active Customers (T) + New Customers (T+1)) - Active Customers (T+1)]/ Active Customers (T)

Strong financial performance delivered during the period

The Group's financial performance in H1 2021 compares very strongly to the performance in the pre-pandemic environment of H1 2019, reiterating the strong progress being made over a longer trading period.

During H1 2021, the Group generated total revenue of $346.2m (H1 2020: $564.2m, H2 2020: $308.3m), including revenue of $143.0m in Q2 2021 (Q2 2020: $247.6m).

The underlying performance of the business remained robust, driven by the high volume of customer trades throughout the period, with Customer Income¹ of $379.2m (H1 2020: $556.9m, H2 2020: $440.6m), including $157.7m in Q2 2021 (Q2 2020: $323.4m).

Supported by the Group's lean and flexible cost base, EBITDA for H1 2021 was $187.6m (H1 2020: $361.8m, H2 2020: $154.1m), including $65.9m in Q2 2021 (Q2 2020: $130.2m).

EBITDA margin remained strong during H1 2021 at 54% (H1 2020: 64%, H2 2020: 50%), including 46% in Q2 2021 (Q2 2020: 53%).

Net profit in H1 2021 was $165.1m (H1 2020: $320.0m, H2 2020: $180.1) and basic earnings per share was $1.62 (H1 2020: $2.98, H2 2020: $1.73), supported in H1 2021 by the updated Corporate Tax rate of 12% for Plus500 Ltd.  

This follows the Company becoming in 2020 one of the first companies to receive approval from both the Israeli Tax Authority (ITA) and the Israeli Innovation Authority (IIA) under the new tax regime, recognising the Company as a "Preferred Technological Enterprise" (PTE). The Company's Corporation Tax rate was consequently updated to 12% for FY 2020, and subject to the Company complying with statutory thresholds, is expected to remain at 12% for FY 2021. In addition, the Withholding Tax rate applicable for dividends has been reduced from 25% to 20%, up to FY 2021.

Costs remained well controlled and 73% of the Group's costs were variable (H1 2020: 82%), with the Group maintaining a flexible cost base. The Group's variable costs remain positively correlated to enhanced performance and higher volumes, including marketing investment and payment processing expenses.  

Marketing technological investment was $85.2m (H1 2020: $125.8m, H2 2020: $95.3m). This dynamic marketing technology investment will continue to be made to ensure that the Company is able to capture opportunities to drive future anticipated attractive return-on-investment.

Total SG&A expenses were $159.8m during the half (H1 2020: $203.6m, H2 2020: $155.3m), the major elements of which were the marketing investment outlined above, processing costs of $22.0m (H1 2020: $30.1m, H2 2020: $22.9m) and payroll and related expenses of $14.6m (H1 2020: $13.1m, H2 2020: $12.9m).

Net financial income amounted to $2.3m in H1 2021 (H1 2020: $2.6m, H2 2020: $7.1m), predominantly due to foreign exchange and translation differences, in addition to interest received related to fixed deposits and tax rebates. A substantial proportion of the Group's cash is held in US dollars in order to provide a natural hedge, thereby reducing the impact of currency movements on financial expenses.

As at the end of H1 2021, total assets were $770.0m (H1 2020: $614.6m) with equity of $597.1m representing approximately 78% of the balance sheet.

The Group remains highly cash generative, supported by the relatively low levels of capital expenditure as a result of its automation and technological capabilities, with 87% operating cash conversion achieved during H1 2021 (H1 2020: 106%).

Cash generated from operations during the period was $163.4m (H1 2020: $385.0m).

During H1 2021, two share buyback programmes were completed, totalling $42.5m. In addition, $84.9m were declared in February 2021 as final and special dividends to shareholders and paid in July 2021 (H1 2020: share buyback programme totalled $38.9m and dividends declared were $40.6m, which were paid to shareholders in July 2020).

The Group continued to be debt-free, as it has been since its inception in 2008, with cash balances and cash equivalents at the end of H1 2021 significantly increasing to $722.5m (H1 2020: $587.8m).

The consolidated financial statements are presented in US dollars, which is the Company's functional and presentation currency. Foreign currency transactions and balances in currencies different from the US dollar are translated into the US dollar using the exchange rates prevailing on the dates of the transactions or at the balance sheet date.

1 Customer Income - Revenue from customer spreads and overnight charges

Plus500 remains a compliant and risk-focused operator  

The Group maintains a highly robust, customer-centric approach to compliance and risk management, supported by its expertise in the applicable global regulatory standards and its strong relationships with the regulators in the markets in which it operates. Furthermore, the Company has the technological skills and capabilities to ensure that it is able to efficiently react with speed and agility to any regulatory changes that occur. This approach has continued to deliver consistent results and has helped to support the Group's performance since the inception in 2008.

In addition, with its strong balance sheet and high level of cash balances to cater for applicable regulatory capital requirements, the Group continued to deliver robust financial results, while serving its customers and maintaining collaborative relationships with the regulators in the markets in which it operates.

The Group continues to ensure its risk exposures are aligned with its risk appetite across its product portfolio, managing risk through real-time monitoring technology, embedded in the platform, and pre-defined risk limits. With this in mind, during H1 2021, the Company implemented a focused, targeted hedging, to help reduce market risk, which will continue to be deployed in certain circumstances going forward, as and when appropriate.  

From a regulatory perspective, the Group supports measures introduced by regulators in the industries in which it operates, with a view to ensuring better protection for all customers.

The Australian Securities & Investment Commission implemented its regulatory changes for the CFD industry in Australia on 29 March 2021. The Group remains supportive of, and compliant with, these changes, which are expected to enhance the CFD trading landscape and provide additional protection for customers.

The impact of the regulatory changes in Australia is as expected, at this early stage. The outcome of these changes will continue to be assessed by the Board, which is confident that Plus500 has the requisite experience, knowledge and technological capability to ensure it continues to perform strongly in the CFD market in Australia, which remains a highly attractive opportunity for the Group.

The Group remains well positioned for potential future changes to the regulatory environment across the markets in which it operates.

Continued focus on Environmental, Social and Governance ("ESG") matters

The Company made good progress in further improving its approach to social responsibility and governance matters, remaining highly engaged with key stakeholders across the ESG investment community, including specialist investors, shareholder advisory bodies and ratings agencies in this space.

Plus500 continues to ensure that the care and protection of its customers remains a key priority, by educating and informing customers of the potential risks involved in trading, through prominent risk warnings and an increasing number of educational features on its platform and websites. In addition, measures such as negative balance protection and maintenance margin protection are embedded in Plus500's technology since the inception of the Company and remain crucial in ensuring customers are well protected.

Plus500 operates in an entrepreneurial, innovative environment with a culture that creates continuous improvement in employee development, which ultimately leads to enhancements in the capability of our technology. The Group's employees are offered rewarding careers with opportunities for training, development and career progression. In addition, the Group is dedicated to the health, safety and wellbeing of its employees and aims to provide them with the most optimal working conditions to support a healthy and balanced work environment.

From a governance perspective, there were a number of Board appointments in the period, including the appointment of Professor Jacob A. Frenkel as Chairman of the Board, as announced earlier this year. Professor Frenkel is a renowned global economist and business leader, with more than 40 years of experience in leading and advising multi-national financial institutions, including JP Morgan Chase International and Merrill Lynch International. He has also been Chairman and CEO of the G-30 and Governor of the Bank of Israel.

In addition, as previously announced, the Company appointed Ms. Sigalia Heifetz as an Independent Non-Executive Director and Ms. Tami Gottlieb as an External and Independent Non-Executive Director. These appointments further expand the range of the Board's expertise and experience and also continue to diversify its gender composition, which remains a key priority for the Board, as it continues to improve its overall approach to ESG matters. In addition, these appointments ensure that the representation of women on the Board is ahead of the 33% target set by the Hampton-Alexander Review.

The Company is also taking steps to diversify its investments within the sustainability eco-system. For example, during the year, Plus500 worked with a key relationship bank to re-classify a portion of its fixed bank deposits as "Green Deposits", which the bank uses to invest in areas such as energy-efficiency activities and renewable energy projects.

Ensuring value is delivered through appropriate level of shareholder returns

The Company's shareholder return policy is to return at least 50% of net profits to shareholders as a normal return on a half yearly basis, with at least 50% of this distribution being made by way of dividends. This shareholder return policy is based on a 23% corporate tax rate, for both future interim and final dividends. In addition, the Board will continue to consider paying special dividends at each year end.

The Board continues to assess the availability of excess capital going forward, to ensure there continues to be an optimal balance between shareholder returns, investments in future growth and in driving business continuity over the long term, in particular to ensure that appropriate levels of available capital are maintained.

Since its IPO in 2013, including those announced today, the Company has returned $1,269.0m to shareholders, of which $1,068.1m was through dividend payments and $200.9m was through share buybacks. At 30 June 2021 the Company held a total of 13,556,847 ordinary shares, representing 11.8% of the Company's issued share capital. The total shares held comprise the purchased shares during the abovementioned period less issued treasury shares.

During H1 2021, the Company completed its most recent share buyback programmes, with 2,192,074 ordinary shares purchased during the period, amounting to a total of $42.5m, at an average share price of £14.14.

With respect to the half year ended 30 June 2021, the Board is pleased to declare an interim dividend of $60.0m¹, representing $0.5921 per share, with an ex-dividend date of 26 August 2021, a record date of 27 August 2021 and a payment date of 11 November 2021.

The Board is also pleased to announce a new share buyback programme amounting to $12.6m.

The Board is increasingly confident about the outlook for Plus500

As a result of the significant positive momentum achieved, supported by the Group's further progress in delivering against its new vision to evolve into a global multi-asset fintech group, the Board is increasingly confident about the Company's performance during the remainder of FY 2021 and beyond.

With this in mind, the Board expects revenue to be significantly ahead of current compiled analysts' consensus forecasts².

Plus500's market-leading proprietary technology platforms, flexible and scalable business model, its recently diversified product portfolio and robust financial position leave the Group well positioned to deliver sustainable growth over the medium and long term.

1 The total estimated dividend payout of $60.0m is based on that 101,331,530 Ordinary Shares are issued as at 16 August 2021. In the event that the Company enters into the New Share Buyback Programme and that Ordinary Shares are repurchased between 17 August 2021 and the dividend record date of 27 August 2021 pursuant to the New Share Buyback Programme, such Ordinary Shares will be held in treasury and therefore will not be entitled to a dividend and the actual aggregate dividend payout will be reduced accordingly.

2 Compiled analysts' consensus forecasts can be found on the Investor Relations section of the Company's website

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2021 (UNAUDITED)

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 JUNE 2021 (UNAUDITED)

Date of approval of the condensed consolidated interim financial information by the Company's Board of Directors: 17 August 2021

Registered Company number (Israel): 514142140

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2021 (UNAUDITED)

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2021 (UNAUDITED)

The accompanying notes are an integral part of the condensed consolidated interim financial information.

Plus500 LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

NOTE 1 - GENERAL INFORMATION

Information on activities

Plus500 Ltd. (hereafter - the "Company") and its subsidiaries (hereafter - the "Group") is a global multi-asset fintech group operating technology-based trading platforms. Plus500 offers customers a range of trading products, including Contracts for Difference ("CFDs") and share dealing, as well as futures and options on futures in the US. The Company has developed and operates an online and mobile trading platform within the CFD sector enabling its international customer base of individual customers to trade CFDs on over 2,500 underlying financial instruments internationally. As at 30 June 2021, the Group only offered CFDs referenced to equities, indices, commodities, options, ETFs, cryptocurrencies and foreign exchange (See note 15).

The Group's CFD offering is available internationally with a significant market presence in the UK, Australia, the European Economic Area (EEA) and the Middle East and has customers located in more than 50 countries. The Group operates through operating subsidiaries regulated by the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investments Commission (ASIC) in Australia, the Cyprus Securities and Exchange Commission (CySEC) in Cyprus, the Israel Securities Authority (ISA) in Israel, the Financial Markets Authority (FMA) in New Zealand, the Financial Sector Conduct Authority (FSCA) in South Africa, the Monetary Authority of Singapore (MAS) in Singapore and the Financial Services Authority (FSA) in the Seychelles.

The Company also has a subsidiary in Bulgaria which provides operational services to the Group. 

On 24 July 2013, the Company's shares were admitted to trading on AIM market of the London Stock Exchange in the Company's initial public offering ("IPO"). On 26 June 2018, the Company's shares were admitted to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange Main Market for listed securities.

As at 30 June 2021, the Group was engaged in one operating segment - CFD trading.

NOTE 2 - BASIS OF PREPARATION

Basis of accounting and accounting policies

These condensed consolidated interim financial information for the six-month period ended 30 June 2021 have been prepared in accordance with IAS 34 - 'Interim financial reporting' as issued by the International Accounting Standards Board. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2020, which have been prepared in accordance with IFRS. These condensed consolidated interim financial information are reviewed and not audited.

Going concern

The Group has considerable financial resources, a broad range of financial instruments and a geographically diversified business. As a consequence, the Directors believe that the Group is well placed to manage its business risks in the context of the current economic outlook. Accordingly, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors therefore continue to adopt the going concern basis in preparing these condensed consolidated interim financial information.

NOTE 3 - ACCOUNTING POLICIES

Significant accounting policies and computation methods used in preparing the condensed consolidated interim financial information are consistent with those used in preparing the 2020 annual financial statements, except for the following:

Income tax in interim periods is recognised based on management's best estimate of the annual income tax rate expected (See note 8).

NOTE 4 - TRADING INCOME

The trading income attributed to geographical areas according to the location of the customer is as follows:

 *Other than the United Kingdom which is presented separately in the table above.

NOTE 5 - SELLING AND MARKETING EXPENSES

NOTE 6 - ADMINISTRATIVE AND GENERAL EXPENSES

NOTE 7 - OPERATING EXPENSES

The presentation below reflects the breakdown of operating expenses by nature of expense:

In the year ended 31 December 2020 and the six months periods ended 30 June 2021 and 30 June 2020, IT and Technology costs, together with additional allocated other technological related costs, were $70.3 million, $22.5 million and $39.7 million, respectively.

NOTE 8 - INCOME TAX EXPENSES 

Law for the Encouragement of Capital Investments, 5719-1959

The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets) by "Industrial Enterprises" (as defined under the Investment Law).

New Tax benefits under the 2017 Amendment that became effective on 1 January 2017 ("2017
Amendment")

The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on 29 December 2016, and is effective as of 1 January 2017. The 2017 Amendment provides new tax benefits for two types of Technology Enterprises, as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.

The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a Preferred Technology Enterprise and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as Preferred Technology Income, as defined in the Investment Law.

Dividends distributed by a Preferred Technology Enterprise, paid out of Preferred Technology Income, are generally subject to withholding tax at source at the rate of 20% or such lower rate as may be provided in an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate).

a.    Company taxation in Israel

The full corporate tax rate in Israel for the years 2021 and 2020 is 23%.

Under the amendment of the Encouragement of Capital Investment Law which became effective in January 2017, provided the conditions stipulated therein are met, technological income derived by Preferred Companies from "Preferred Technological Enterprise" (as defined in the 2017 Amendment) ("PTE"), would be subject to reduced corporate tax rates of 12%.

A Preferred Company distributing dividends from technological income derived from its PTE, would subject the recipient to a 20% tax (or lower, if so provided under an applicable tax treaty).

In May 2019 the Company obtained a tax ruling from the Israeli Tax Authorities ("ITA") and subject to the Company complying with the conditions stipulated by the tax ruling which the Company met and the Encouragement of Capital Investment Law, the Company is considered as a PTE.

At the beginning of July 2020, the Company received an approval from the Israeli Innovation Authority that together with the tax ruling received from the ITA in May 2019, recognises the Company as a PTE for the years 2017, 2018 and 2019. Accordingly, the applicable tax rates for the preferred technological income of a PTE for these years is 12%. The Company is also considered as PTE for the years 2020 and 2021. As a result the Company's corporate tax rate for the years 2020 and 2021 is 12%.

In July 2020 the Company received approximately $47.0 million rebates (including interest) reflecting the reduced tax rate for tax year 2018. In January 2021 the Company received approximately $30.0 million rebates (including interest) reflecting the reduced tax rate for 2017. A tax rebate in respect of the year 2019 was received in August 2021 (See note 15).

b.    Tax assessments

The Company is currently subject to several tax audits in relation to 2017-2020 tax years.

The assessments of amounts of current and deferred taxes requires the Group's management to take into consideration uncertainties that its tax position will be accepted and of incurring any additional tax expenses. This assessment is based on estimates and assumptions based on interpretation of tax laws and regulations, and the Group's past experience. It is possible that new information will become known in future periods that will cause the final tax outcome to be different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

c.     Taxes on income included in the consolidated income statement

NOTE 9 - EARNINGS PER SHARE

Earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

  *After weighting the effect of Company's share buyback programmes (See note 11).

NOTE 10 - DIVIDEND

The amounts of dividends and the amounts of dividends per share for the years 2021 and 2020 declared and distributed by the Company's Board of Directors are as follows:

*Between the dividend announcement date and the record date of the dividend, the number of issued and outstanding ordinary shares of the Company decreased as a result of the repurchase by the Company of ordinary shares during such period and the classification of such repurchased ordinary shares as treasury shares that are not entitled to dividends. However this did not affect the dividend per share as announces on the dividend announcement date.

NOTE 11 - ACQUISITION OF THE COMPANY'S SHARES HELD BY THE COMPANY

The Board of Directors approves share buyback programmes. The share buyback programmes are funded from the Company's net cash balances.

During the period ended 30 June 2021, the Company issued a total of 72,150 of its treasury shares.

NOTE 12 - TRADE PAYABLES - DUE TO CLIENTS

* The total amount of 'Trade payables - due to clients' includes bonuses to clients.

NOTE 13 - CASH GENERATED FROM OPERATIONS

Non-cash transactions

On 17 February 2021, the Company declared a dividend in an amount of $84.9 million ($0.8292 per share). The dividend was paid to shareholders on 12 July 2021 (See note 10).

NOTE 14 - FINANCIAL RISK MANAGEMENT

Financial risks arising from financial instruments are analysed into market, credit, concentration and liquidity risks. These condensed interim financial information do not include all financial risk management information and disclosures required in the annual financial statements. Details of how these risks are managed are discussed in the financial risk management note of the 2020 Plus500 Ltd Annual Report.

During 2021, the Company implemented focused, targeted hedging, to help reduce market risk, which will continue to be deployed in certain circumstances going forward, as and when appropriate.

Further to the mentioned above, there has not been a significant change in the Group's financial risk management processes or policies since year end 2020.

NOTE 15 - SUBSEQUENT EVENTS

In August 2021 the Company received approximately $37.2 million in tax rebates (including interest) reflecting the reduced tax rate for 2019. These amounts are not reflected in the condensed consolidated interim financial information for the period ended 30 June 2021 (See note 8).

On 17 August 2021 the Company declared an interim dividend in an amount of $60.0 million ($0.5921 per share). The dividend record date is 27 August 2021 and it will be paid to the shareholders on 11 November 2021.

On 17 August 2021, the Board of Directors approved a programme to buy back an amount of up to $12.6 million of the Company's ordinary shares.

Acquisition of Cunningham and CTS

On 20 April 2021, Plus500US Inc., a wholly owned subsidiary of the Company, signed purchase agreements to acquire all of the membership interests of Cunningham Commodities LLC. ("Cunningham"), a regulated Futures Commission Merchant ("FCM"), and Cunningham Trading Systems LLC. ("CTS"), a technology trading platform provider, operating in the futures and options on futures market in the US (together the "Acquisition"), subject to fulfilment of certain terms, including the receipt of applicable regulatory approvals.

On 19 July 2021, all terms were fulfilled and Plus500US Inc. completed the Acquisition.

The Acquisition consideration of approximately $30 million (subject to certain adjustments) was funded from Plus500's existing cash balances and was paid on completion.

'Plus500 Invest'

In July 2021 the Company launched its new share dealing platform in selected geographies - 'Plus500 Invest'. The platform will focus on providing clients with a simple and user-friendly experience to trade the world's most popular shares and ETFs listed on exchanges worldwide.