fundtruffle

Third quarter results: London Stock Exchange

David Stevenson, 18/10/2019

It has been quite a year for the London Stock Exchange Group, rebuffing the Hong Kong exchange’s $37 billion takeover attempt then agreeing to acquire financial data provider Refinitiv shortly after for $14.5 billion.

Today’s results for the three months ending 30 September show the company in good health, with total income up 12 percent to £587 million. Gross profits were also up by 14 percent to £529 million.

Regarding its post trade offering, income was up 19 percent to £197 million driven by 22 percent growth in OTC clearing.

Information services was another strong performer during the reporting period, with revenues up 9 percent to £230 million. FTSE Russell, the index the LSE launched in 2015, was up 10 percent, driven by a strong performance in subscription revenues.

In terms of what CEO David Schwimmer deemed a ‘transformational’ deal with Refinitiv, the company reported that the deal is progressing smoothly. Fundeye had previously reported that feted investor Nick Train also liked the look of the deal (being a holder of the company).

CFO David Warren is to step down next year the company stated and it will be engage in a worldwide search for a replacement. The board has appointed David Shalders as chief integration officer. He will join as a member of the executive committee and report to the chief executive.

The LSE has been offering stock trading for 200 years and as seen with the amount of proposed deal activity, it’s a business that remains highly sort after. However, despite the number of deals proposed, including two attempted mergers with the Deutsche Borse, not many see their way to completion. This could be due to the geopolitical upheaval involved in getting such deals past the line but investors in LSE will surely be buoyed by today’s Refinitiv update. The company’s share price is up 1 percent to £71.16 on today’s news.

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