The financial bookmaker Plus500 continues to distribute the money

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Gambling is a fool’s game, but financial bookies have been some of the best bets on the UK stock market. Shares in Israeli spread betting group Plus500 have risen 2,000% since listing just over a decade ago. Add dividends to the mix and performance moves over 5,000 percent. An upgrade to its full-year outlook and $185.5 million in additional shareholder income pushed the stock to Monday’s interim results. There’s good reason to believe the returns will keep coming.

Plus500 and its London-listed peers IG Group and CMC Markets are tied to the vagaries of global markets as well as the army of retail investors who prefer the typically riskier investment methods they offer. Structural growth underpins the long-term capital story. For Plus500, that means creating new markets and products to keep the flow of new customers and warehouses growing. Knock-out options for Japanese retail investors are a recent addition, but the US opportunity is the most promising.

Volatility in global equity markets has already reared its head this summer amid fears of a hard landing for the US economy. With stocks being evaluated for perfection and questions being asked about the profitability of AI investments, further ups and downs seem likely. Spread punters, who revel in volatility, appear to be poised to take advantage: Average deposits for active customers rose 30% to $8,400 in the first half at Plus500. Rate cuts and the US election should add to the activity.

Spread punters seem to be increasingly loyal to Plus500 technology. About 64% of its over-the-counter revenue came from customers who have been with the group for more than three years, up from 55% in the first half of 2023.

As a result, Plus500 is confident that annual ebitda will be ahead of market expectations, which were around $315 million before Monday’s update. Its cash balances topped $1 billion for the first time in the first six months. That means plenty on hand for later payments. Total shareholder return of up to $360 million so far this year – equivalent to 15% of Plus500’s market value. About $2.3 billion has been returned since the 2013 IPO.

The group’s shares have rarely traded much above nine times current forward earnings, but a revaluation remains possible. A discount to IG, also nine times today, has been locked out of 2021. As it continues to deliver cash and promises, a premium for the stock doesn’t look like an outside bet.

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