LSE profit rises as core divisions see good growth
London Stock Exchange reported a jump in profit and revenue for the full year on Friday as it saw "strong" growth across its core business divisions.
Financial Services
13,969.36
17:09 25/04/24
FTSE 100
8,078.86
17:14 25/04/24
FTSE 350
4,434.34
17:09 25/04/24
FTSE All-Share
4,387.94
16:49 25/04/24
London Stock Exchange Group
8,890.00p
16:44 25/04/24
In the year to the end of December 2018, pre-tax profit rose to £685m from £541m in 2017 as total revenue pushed up 8% to £1.9bn. Meanwhile, the FTSE Russell - which operates the FTSE 100 index - delivered 15% revenue growth, or 8% on an organic constant currency basis, and LCH over-the-counter clearing revenues were up 16%, or 17% on a constant currency basis.
The company said there was strong growth in its core divisions of Information Services, LCH and Capital Markets.
LSE proposed a final dividend of 43.2p a share, taking the full-year dividend up 17% 60.4p a share.
The group also said on Friday that it no longer expects to achieve the target 4% compound annual growth rate increase in operating expenses for 2017-19 due to the ongoing investment to support growth and efficiency. As a result, and despite good momentum towards achievement, it also does not expect to meet the target group EBITDA margin of around 55% in 2019.
Its other targets in respect of revenue growth at LCH OTC clearing and FTSE Russell, as well as the EBITDA margin for LCH, remain in place for 2019.
LSE also announced a move to cut jobs to drive further integration, remove role duplication and reduce the number of contractors it employs. This will affect around 5% of its global headcount, or approximately 250 employees, and generate a run-rate cost saving of circa £30m a year. There will be a one-off cost to implement the programme this year of around £30m.
Chief executive officer David Schwimmer said: "LSEG continues to be well positioned in an evolving macroeconomic and regulatory landscape. Our businesses, including those perceived to be most exposed to Brexit, such as clearing, continue to perform very well, with no change in our market position.
"We have delivered another year of strong performance across the group, with a 9% increase in income and 17% growth in both adjusted earnings and proposed dividend. We have continued to invest in new initiatives, developing our information services business and increasing our majority holding in LCH, as well as taking a minority stake in Euroclear.
"The strategic positioning of each of our businesses has reinforced for me the continued opportunities for growth. We will continue to invest in our businesses and to increase group-wide collaboration to better meet the needs of our clients and to continue to drive strong returns for our shareholders."