LSE Group makes 'strong progress' in first quarter

London Stock Exchange Group reported “strong” financial and operational progress in the first quarter on Wednesday, with total income excluding recoveries up 6.3%.

The FTSE 100 exchange operator said it saw “good growth” across all divisions, with total income rising 6.8% adjusting for the actions taken in response to Russia’s invasion of Ukraine.

It said the performance was driven by new business growth and high customer retention, building on a “strong” 2021.

Data and analytics was up 4.5% on an underlying basis, or 5.1% excluding Ukraine war impacts, with trading and banking growing, and annual subscription value growth of 4.9% adjusted for the Ukraine conflict, or 3.6% unadjusted.

Capital markets were up 11.9%, with good contributions reported across fixed income at Tradeweb, as well as foreign exchange and equities.

Post trade was ahead 6.6%, with broad-based growth reported.

LSEG said 73% of group income, excluding recoveries, was “highly recurring” in nature, and diversified across customer, activity, product and geography.

It reported continued achievement of cost and revenue synergies during the quarter, with £25m in run-rate revenue synergies achieved by the end of the first quarter.

The company said it remained on track to meet all of its financial targets.

Its focus remained on portfolio enhancement, with the acquisitions of Quantile, TORA and GDC set to enhance its offerings in post trade, trading and banking, and customer and third-party risk, respectively, and all on track for completion during 2022.

The divestment of BETA+, meanwhile, would see a “significant proportion” of net proceeds returned to shareholders via a share buyback likely to start in the third quarter.

“LSEG has delivered a good first quarter, with strong underlying performance across all divisions,” said chief executive officer David Schwimmer.

“During the quarter we announced two acquisitions to enhance our product offerings in trading and banking, and customer and third-party risk.

“We also announced the divestment of BETA+, which will simplify and refocus our wealth solutions business.”

Schwimmer said the firm’s ability to invest for growth, make strategic acquisitions and return capital to shareholders demonstrated the strength of the group and its “high-quality” recurring revenues.

“The group is well positioned and we look forward to further progress during the rest of 2022.”