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(Alliance News) - Plus500 on Wednesday reported a "year of two distinct halves" as profit and revenue slumped in 2019.
However, the contracts-for-difference trading provider said that momentum built up in the second half of the year has continued into the new year, and it launched a new share buyback programme.
For all of 2019, trading income halved to USD354.5 million from USD720.4 million, while pretax profit dived to USD189.3 million from USD503.0 million.
The online trading services provider said it performed robustly across all key metrics in the second half of the year compared to the first, with the latter hit by "extremely" low volatility in the first quarter. 2019 marked the first full year of trading under the new regulatory regime introduced in Europe, Plus500 noted, with customer trading patterns "adjusting through the year".
Turning to current trading, Plus500 said "positive momentum" has continued into 2020, reflecting heightened levels of volatility in financial markets.
"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," said Chief Executive Asaf Elimelech.
Plus500 also on Wednesday set out plans for a new share buyback programme, aiming to purchase up to USD30.0 million in shares. It did, though, cut its total dividend for the recent year to USD0.6501 per share from USD1.9977 in 2018.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 19.06 points, 0.3%, at 7,518.50
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Hang Seng: up 0.8% at 27,810.71
Nikkei 225: closed up 0.7% at 23,861.21
DJIA: closed down 0.48 point at 29,276.34
S&P 500: closed up 0.2% at 3,357.75
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GBP: firm at USD1.2963 (USD1.2944)
EUR: soft at USD1.0911 (USD1.0917)
Gold: firm at USD1,564.96 per ounce (USD1,564.39)
Oil (Brent): up at USD55.12 a barrel (USD54.10)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
1100 CET EU industrial production
0700 EST US MBA weekly mortgage applications survey
1030 EST US EIA weekly petroleum status report
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The death toll from China's new coronavirus epidemic climbed past 1,100 on Wednesday but the number of new cases fell for a second straight day, as the World Health Organization urged global unity to combat the "grave threat". As Beijing scrambles to contain the virus, the number of people infected on a cruise ship off Japan's coast rose to 174 – the biggest cluster outside the Chinese mainland. Another 97 people died in China, raising the national toll to 1,113, while more than 44,600 people have now been infected by the newly named COVID-19. The WHO decided to name the virus COVID-19 in keeping with guidelines aimed to avoid linking a disease to an animal or a geographic location. Addressing scientists at the first international conference on combating the virus in Geneva on Tuesday, WHO chief Tedros Adhanom Ghebreyesus warned that the virus was a "very grave threat".
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Bernie Sanders won New Hampshire's high-stakes Democratic primary on Tuesday, according to US network projections, leaving rivals including party stalwart Joe Biden in his wake as he staked his claim to challenge President Donald Trump in November. Sanders, the flag-bearer for the party's progressive wing, had 26% of votes with most of the count complete in the northeastern state, where he routed Hillary Clinton in 2016. Indiana ex-mayor Pete Buttigieg finished in second place at 24% as he readied for the more difficult battlegrounds ahead, while fellow Midwestern moderate Amy Klobuchar maintained a late surge to place third on about 20%. Liberal Elizabeth Warren finished in fourth place at about 9%. Biden languished in fifth with just over 8%.
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BROKER RATING CHANGES
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RBC CUTS DRAX GROUP TO 'OUTPERFORM' ('TOP PICK') - TARGET 370 (420) PENCE
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BERENBERG RAISES GREENCORE TO 'BUY' ('HOLD') - TARGET 285 (250) PENCE
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UBS CUTS TALKTALK TELECOM TO 'SELL' ('NEUTRAL') - TARGET 101 (107) PENCE
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COMPANIES - FTSE 100
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J Sainsbury said it will begin a search for a new chair for its banking arm after incumbent Roger Davis announced plans to step down. Davis has been chair at Sainsbury's Bank since May 2013. The grocer said: "A search to find his replacement will begin and a further announcement regarding timings of his retirement and news of his successor will be made in due course." The news comes less than a month after the company said Chief Executive Mike Coupe will step down from the role after nearly six years at the helm. He will be succeeded by Retail & Operations Director Simon Roberts. The company in September announced a freeze on putting new cash into its financial services arm as part of an overhaul of the unit.
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COMPANIES - FTSE 250
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Babcock International damped profit guidance as it lowered expectations for its Aviation unit. The defence firm continues to see underlying revenue around GBP4.9 billion for the current financial year, ending in March, but underlying operating profit is expected around GBP540 million, compared to a previous guidance range of GBP540 million to GBP560 million. Underlying earnings per share are seen in line with consensus. Trading in Aviation has been mixed, the firm explained, with good performance in the UK and its international operations offset by "continued challenges" in southern Europe and the oil and gas business. As a result, Babcock said it has lowered its expectations for the unit and, in response to the unit's trading, will be implementing "improvement and restructuring programmes", writing down assets and leases. Outside of Aviation, both Marine and Land continue to perform well, the company said.
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Home furnishings retailer Dunelm raised its full-year outlook following double-digit profit growth in its first half. Revenue for the 26 weeks to December 28 amounted to GBP585.0 million, up 6.0% on a year ago. Pretax profit grew more strongly, up 19% to GBP83.6 million, as gross margin expanded to 51.5% from 50.3% a year prior. Like-for-like sales rose 5.6% against a "strong" comparative of 7.8% in the period a year ago. Dunelm raised its interim dividend by 6.7% to 8.0 pence per share. Chief Executive Nick Wilkinson said: "The third quarter has started well, with a successful Winter Sale across the total retail system. As a result, we expect full year FY20 profit before tax to be slightly ahead of the top of the latest range of analyst expectations. We are monitoring the Coronavirus outbreak carefully. To date we have not assumed any material disruption to our supply chain or any financial impact in the year."
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COMPANIES - INTERNATIONAL
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Social media companies will be held to account for potentially harmful material on their platforms by UK broadcasting regulator Ofcom, it has been reported. The UK government has previously mooted a statutory duty of care for internet companies with an independent regulator enforcing new guidelines against so-called online harms. The Financial Times has reported that Culture Secretary Nicky Morgan will announce a widened remit for Ofcom as an internet watchdog on Wednesday. A role for Ofcom in dealing with technology firms like Facebook, Instagram and YouTube has previously been suggested and followed the publication of a government white paper into online harms in April.
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Heineken reported double-digit income growth in 2019, boosted by its best quarterly performance in a decade in the final three months of the year. In 2019, the Amsterdam-based brewer, which makes Amstel, Desperado, Sol and Birra Moretti, recorded net profit of EUR2.17 billion, up 13% year-on-year from EUR1.91 billion in 2018. Diluted earnings per share rose 13% to EUR3.77 from EUR3.35. Revenue rose 6.4% to EUR28.52 billion from EUR26.81 billion. Chair & Chief Executive Jean-Francois van Boxmeer said: "In 2019, we delivered another year of superior top-line growth, with continued strong performance in the second half. Growth was well balanced with beer volume up 3.1% and revenue per hectolitre up 3.3%, driven by robust pricing and focus on premiumisation."
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Wednesday's Shareholder Meetings
UK Oil & Gas (re cash and shares in company)
Oxford Metrics
RWS Holdings
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By Tom Waite; thomaslwaite@alliancenews.com
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