Shares in online trading platform and FTSE 250 member Plus 500 (LSE: PLUS) were well into positive territory this morning as the firm hailed an “outstanding performance” over the first half of 2020.
I suspect there could be more gains on the cards over the rest of the year.
Plus 500: market crash winner
Thanks to March’s market crash and the volatility seen since, total revenue at Plus 500 rocketed 281% to $564.2m compared to the same six-month period in 2019. Earnings before interest, tax, depreciation and amortization (EBITDA) came in at $361.8m — a stonking 452% higher.
Unsurprisingly, the company welcomed a huge number of new customers (over 198,000) over the half-year. Client deposits jumped from just over $467m in 2019 to $1.65bn over the period and 47 million trades were placed — a dramatic increase on the 17.5 million seen last year.
For those already holding the stock, the good news didn’t stop there.
In addition to announcing a new share buyback programme, Plus 500 also confirmed an interim dividend of $0.95 per share. That’s a rise of almost 250% on 2019’s cash payout! It also said that it was considering paying a special dividend to holders at the end of the full year. Based on trading over the last couple of months, I think the latter is very likely to happen.
It said today that customer income in the second half of its financial year so far was still “more than double that of the prior year“. Moreover, Plus 500 is absolutely rolling in money. With no debt to its name, the FTSE 250 stock had almost $588m in cash at the end of June.
The nature of its business means the firm won’t be to every investor’s taste. Nevertheless, it’s hard to be bearish on the company as things stand.
Indeed, with the shares trading on just six times earnings before today’s results and the possibility that markets could remain skittish for some time to come, I certainly wouldn’t blame anyone for taking a stake now.
Not quite as tasty
Also reporting today was FTSE 250 peer Domino’s Pizza (LSE: DOM). Unfortunately for its owners, the numbers weren’t quite as tasty as those offered by Plus 500 (although that’s a big ask). That said, they still looked pretty reasonable under the circumstances.
Thanks to a 5.5% rise in system sales over the 26 weeks to 28 June, statutory pre-tax profit from continuing operations came in 13.6% higher at £45.8m. This was despite the company needing to remove collections during the lockdown and “some inevitable and, in certain areas considerable, incremental costs”.
Looking ahead, Domino’s reported that recent trading had been “encouraging“. Another positive for shareholders was the announcement that it would be reinstating its dividend. The deferred FY19 payout of 5.56p per share will now be paid out on 18 September.
But let’s not get ahead of ourselves. In line with other businesses that rely on discretionary spending, Domino’s went on to say that it was “too early to conclude how customer behaviour will evolve“. The company’s fractious relationship with its franchisees still needs to be resolved as well.
Having initially bounced back to form in the aftermath of March’s market crash, Domino’s share price has now settled at roughly where it was at the start of the year. Unlike Plus 500, I can’t see a catalyst for the shares to continue rising at the current time.
Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Domino's Pizza. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.