London Stock Exchange Group reports strong financial performance in the first half of the year – with double-digit revenue growth in Information Services, LCH and Capital Markets.
London Stock Exchange Group Plc Interim Results for the 6 Months Ended 30 June 2018
August 2, 2018
Unless otherwise stated, all figures below refer to continuing operations for the six months ended 30 June 2018. Comparative figures are for continuing operations for the six months ended 30 June 2017 (H1 2017).
- Strong financial performance – with double-digit revenue growth in Information Services, LCH and Capital Markets
- Revenue up 12% to £953 million (H1 2017: £853 million); total income up 12% to £1,060 million (H1 2017: £946 million)
- Adjusted operating profit1 up 21% to £480 million (H1 2017: £398 million), with underlying operating expenses on an organic and constant currency basis up 5% as the Group continues to invest in growth and efficiencies
- On a reported basis, operating profit up 29% to £393 million (H1 2017: £305 million); profit before tax up 30% to £360 million (H1 2017: £277 million); profit after tax of £283 million (H1 2017: £208 million)
- Adjusted EPS1 up 25% to 88.7 pence (H1 2017: 71.2 pence); basic EPS up 41% to 71.1 pence (H1 2017: 50.4 pence)
- Interim dividend increased 19% to 17.2 pence per share (H1 2017: 14.4 pence per share), in line with stated dividend policy
- Strong balance sheet position with leverage reduced to 1.6 times adjusted net debt: pro forma EBITDA
- During the period, capital deployed for acquisitions, including increasing stake in LCH Group to 68%; 100% ownership of FTSE TMX; and c.16% minority stake in AcadiaSoft alongside organic investment to capitalise on multiple growth opportunities
- FTSE Russell integration of The Yield Book is on track, delivering further expanded multi-asset index capabilities, data and analytics
- LCH continues global leadership with record clearing volume at SwapClear, and successfully launched non-deliverable and SOFR IRS. ForexClear launched options clearing
- Group is well positioned to drive further growth as a diversified, global financial markets infrastructure business – operating on an open access basis in partnership with customers
David Schwimmer, Group CEO, said: "I am delighted to join the Group, which continues to deliver strong growth. The Group’s strategy, based on an open access and customer partnership approach, provides a great foundation for further success. My immediate focus is to meet with colleagues, customers, shareholders and other stakeholders, and to ensure we continue our focus on driving operational excellence across LSEG as I work with the executive team to develop the Group’s many opportunities ahead."
David Warren, Group CFO, said: "The Group has delivered another strong performance, with growth across all business areas. LCH has launched new products and set new records for clearing levels in the SwapClear and ForexClear services, while FTSE Russell has produced another good result. Capital Markets performed well with increases in primary and secondary markets activity. We are in a strong position as we work to execute on our strategy and to meet our financial targets while continuing to invest for further growth."
1 before amortisation of purchased intangible assets and non-underlying items
Organic growth is calculated in respect of businesses owned for at least 6 months in either period and so excludes ISPS, The Yield Book and Citi Fixed Income Indices, MillenniumIT ESP and Exactpro. The Group’s principal foreign exchange exposure arises from translating our European based Euro and US based USD reporting businesses into Sterling.
Figures are for the Group on a continuing basis so exclude businesses classified as discontinued during 2017.
London Stock Exchange Group uses non-GAAP performance measures as key financial indicators as the Board believes these better reflect the underlying performance of the business. As in previous years, adjusted operating expenses, adjusted operating profit, adjusted profit before tax and adjusted earnings per share all exclude amortisation and impairment of purchased intangibles assets and goodwill and non-underlying items.
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