LSEG Q3 revenue up 2.3%, Q4 could slow

London Stock Exchange Group (LSEG) posted a 2.1% rise in revenue to £1.78 bn from £1.75 bn in the third quarter and said it was on track to achieve cost savings from the integration of data platform Refinitiv.

Total income excluding recoveries on a constant currency variance rose 7.6% to £1.69 bn,

The exchange group said it expected year to April income to grow between 4-5%, but the pace would be slower in the fourth quarter on a constant currency basis due to the strong comparator in same period in 2020.

While there is no change to previous cost or capital expenditure guidance, the exchange has been hurt by supply chain issues that have hit other industries. In LSEG’s case, it affected “the timing of some technology spend this year.”

Breaking down the divisions, data & analytics revenue grew 6.0% and continues to perform well with growth in annual subscription value increasing from 3.9% in the first half to 4.0% in Q3, reflecting strong new business wins.

“We are making excellent progress on the integration of Refinitiv and are comfortably on track to achieve £125 m of cost synergies in 2021, ahead of our original phasing,” Chief Executive David Schwimmer said in a statement.

LSEG acquired Refinitiv for $27 bn in January, meaning most of its revenue now emanates from data services

The aim is to transform LSEG into a one-stop shop for data, trading and analytics, although the costs of absorbing the data provider has been a concern for some investors.

Capital markets also had a strong showing jumping 17.2% driven by double-digit growth at Tradeweb, strong primary issuance within equities and good dealer-to-client volumes at FXall.

Equities revenues climbed 15.4%, helped by high-profile listings in London including the £11 bn initial public offering of fintech Wise Plc.

The UK is revising its stock market rules in the hopes of attracting more technology firms to list in London in a post Brexit world.

As for post trade, revenue grew 11.5% driven by higher clearing activity from both new and existing customers while total income increased 2.3%, reflecting lower investment returns in net Treasury income compared to the strong comparator in Q3 2020.

©Markets Media Europe 2021

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