Plus500 Ltd (LON:PLUS) was discussed by Gervais Williams, Co-Fund Manager of The Diverse Income Trust plc (LON:DIVI) in a wide-ranging exclusive interview about the Trust and a selection of LSE-listed companies in the DIVI portfolio.
DirectorsTalk asked:
Plus500 Ltd is a key holding in the Diverse Income Trust, and has had a strong start to 2025, with expectations now ahead of consensus. What do you see as the main drivers behind their recent momentum?
Gervais Williams responded:
What has been interesting really about Plus500 is it has been overlooked by many investors for many years, partly because people see it as more of a trading type business, and people trade sometimes more some quarters than other quarters, and there is an aspect to that.
The key factor about this company is it generates a very, very substantial cash generation profits and so, over the years since it was first listed over 12 years ago, the trust actually has been invested, not all the time, but most of the time and it has generated this cash. This cash has been paid out in good and great dividends, it’s also been paid out in buybacks and when you look at it in total return terms, it is actually one of the best performing stocks in the UK market since it was listed.
What is driving it? Specifically, more uncertainty. What you see at times of uncertainty is people begin to buy and sell assets, and Plus500 has been obviously winning on that side of things.
The second feature is certain markets are deregulating, US for example, and they have moved into the US, and they think they can take more market share, move into other markets around the world as well. We think they can too.
So, both factors are driving extra return, extra cash generation, and very pleasingly we are seeing the share price appreciate.
