LSE turns in 'strong' interim performance amid challenging market

London Stock Exchange Group reported a “strong” financial performance in its first half on Thursday, despite what it called “challenging” market conditions, with total revenue rising 7% to £1.02bn.

The FTSE 100 stock exchange operator and information services provider said its total income was ahead 8% at £1.14bn for the six months ended 30 June.

FTSE Russell revenue was 9% higher year-on-year at £315m, with the board reporting growth in subscription and asset-based revenues, while post trade revenue at LCH was 12% higher at £266m, driven by “strong growth” in OTC volumes, notably in the ‘SwapClear’ service.

Operating expenses, excluding depreciation and amortisation, were flat and down 2% on a constant currency basis, with LSE reporting “good” cost control while continuing to invest.

Adjusted operating profit was 11% higher at £533m, and operating profit was ahead 2% at £399m.

The board said its profit before tax was 1% higher at £363m, with profit after tax standing at £265m, down from £283m year-on-year.

Adjusted earnings per share managed gains of 13% to 100.6p, while basic earnings per share slipped 1% to 70.7p.

LSE’s board increased the interim dividend by 17% to 20.1p per share, in line with its stated dividend policy.

It said it was in a “strong” balance sheet position, with leverage at 1.7x adjusted net debt-to-pro forma EBITDA, notwithstanding continued investment spend during the period.

“The group has delivered another strong performance with an 8% increase in income during the first half of the year,” said LSE chief executive officer David Schwimmer.

“In post trade, LCH's OTC clearing services have achieved record volumes during the period and have seen strong growth in member and client clearing.

“In Information Services, we have acquired Beyond Ratings - a highly regarded provider of ESG data and analytics - which will accelerate our ability to develop differentiated multi-asset solutions in sustainable finance investing.”

In capital markets, despite a slower start to the year, Schwimmer said the group had seen activity improve in the second quarter, with companies able to benefit from access to the deep liquidity pools available across LSE’s listings and trading businesses.

“We have continued to invest across our businesses, working in partnership with customers to deliver innovative products and services, while continuing to control costs.

“The group remains well positioned in an evolving regulatory and macroeconomic environment and we expect to make further progress in the second half.”

Schwimmer also noted that the company had announced a proposed transaction to acquire Refinitiv, which he described as a “leading global provider” of data, analytics and financial markets solutions.

“This transformational acquisition creates a multi-asset class capital markets business and brings world class data content, management and distribution capabilities to LSEG, accelerating our strategy and expanding our global footprint.

“This positions us in key areas of future growth as a global financial markets infrastructure leader.”