In a recent interview with the Standard, CEO David Zruia confirmed that Plus500, a technology firm primarily operating in the financial services sector, is considering listing its shares in the United States in addition to its current listing in London.
This decision comes after reports in May revealed the company’s interest in joining the ranks of firms such as Arm, CRH, and Flutter, all of which have expressed intentions to sell shares in the New York market.
Zruia emphasized that the company’s valuation is likely to be higher within US exchanges due to the more favorable valuations that tech companies often receive in the United States.
He explained that Plus500 is categorized as a financial services firm, but its core operations are rooted in technology.
The discrepancy between its actual technological nature and its valuation as a financial entity prompted the consideration of a US listing.
The CEO also mentioned that the decision to pursue a US listing would be contingent on market conditions improving, indicating a cautious approach to the potential move.
Challenges of London Listing Efforts and UK Equity Market Discount
Efforts have been made within the City to encourage companies, particularly those in the technology sector, to list their shares in London and remain there.
The Financial Conduct Authority (FCA) has streamlined listing rules, and Jeremy Hunt has announced changes to incentivize pension funds to invest in London-listed companies.
Despite these efforts, there has been limited success in convincing companies to list in London, as valuations continue to be more favorable overseas.
The disparity in valuations was highlighted by the widest-ever discount for UK equities compared to equities in other countries, a trend that has persisted despite attempts to reverse it.
Financial Performance and Share Buybacks
In terms of financial performance, Plus500 reported a 44% decrease in profits for the first half of the current year compared to the same period in the previous year.
This decline was accompanied by a 278% drop in revenue, which amounted to $174.9 million and $368.5 million, respectively.
However, Zruia pointed out that these figures represented a rebound from the second half of the previous year, which had seen unusually high activity due to the pandemic-induced day-trading surge.
Despite the year-on-year decrease, Plus500 undertook a buyback of shares worth $60 million, bringing its total returns to shareholders for the year to nearly $350 million.
CFO Elad Even-Chen highlighted that these buybacks were intended to address the perceived undervaluation of the company’s stocks.
Share Performance
Following these developments, Plus500’s shares experienced a notable increase of 65p, or 4.5%, reaching a value of 1,496p on the current trading day.
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