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On Friday, the London Stock Exchange Group (LSEG.L) reported an increase in first-half revenue, pointing to success in integrating data giant Refinitiv and rewarding investors with a dividend hike. At 0815 GMT, its shares were up over 4%, topping both London’s blue-chip FTSE 100 index (. FTSE) and Europe’s STOXX 600 index (. STOXX) after the British stock exchange operator announced total revenue increased 4.6 percent to 3.36 billion pounds ($4.67 billion). Operating profit increased to 1.17 billion pounds from 457 million pounds the previous year.
Its success was aided by a 9.6 percent increase in capital markets revenue as stock market listings had their best first half since 2014, and fixed income volumes increased as well. “We have had a terrific first half of the year – capital raising is very robust and a number of companies have been coming to market,” chief executive David Schwimmer told reporters.
He also predicted that the rest of 2021 will be busy for initial public offerings and the listing of a small number of special-purpose acquisition businesses.JP Morgan analysts praised the “excellent set of results,” noting that adjusted core earnings were roughly 5% higher than expected and that cost management had improved.
With its $27 billion acquisition of Refinitiv, the 300-year-old market is attempting to turn into a one-stop-shop for data, trading, and analytics. However, the expenses of integrating the data source have alarmed some investors, pushing the company’s stock down 20% since early March, when it provided further specifics on the integration. According to the company’s announcement on Friday, the Refinitiv purchase has resulted in cost savings of around 77 million pounds. It expected those to rise to 125 million pounds by the end of the year, up from its previous prediction of 88 million pounds.
However, LSEG warned that it expects more cost rises in the second half of 2021, due to the resumption of costs affected by the coronavirus pandemic, as well as ongoing spending from legacy IT and inflation. It announced an interim dividend of 25 pence per share, a 7 percent increase over the previous year.
Schwimmer stated that the company had identified and was resolving the source of difficulties with Refinitiv’s news and data platform Eikon, which had had a series of outages this year. more infoRefinitiv was spun off from Thomson Reuters, the parent company of Reuters News, in 2018 by a consortium led by Blackstone (BX. N), before being purchased by LSEG in January 2021. Following that transaction, Thomson Reuters now has a minority position in the business, and Refinitiv pays Thomson Reuters for the news it distributes on its terminals.