London Stock Exchange Group Reports Strong Growth in Core Areas for H1 2017

LSEG has reported 82 percent growth in net profit and announced an interim dividend of 14.4 pence per share.

The London Stock Exchange group (LSEG) has reported its six months interim results ending 30th June 2017. The group has reported strong income growth across all business segments and 23 percent growth in AEPS.

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H1 Financial Highlights

During the first six months, the group has reported strong growth in its core business segment including Information Services, FTSE Russell and OTC clearing at LCH. The total operational revenue for the group has increased by 18% to £853 million (H1 2016: £722 million). The group reported 20 percent growth in adjusted operating profit at £398 million (H1 2016: £333 million), 69 percent growth in profit before tax at £277 million (H1 2016: £164 million), and 82 percent growth in profit after tax at £208 million (H1 2016: £114 million).

The strong financial performance has helped the group’s adjusted EPS to rise by 20 percent to 71.2 pence (H1 2016: 57.7 pence). The group has announced an interim dividend of 14.4 pence per share and £200 million in its share buyback programme.

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On the back of the strong balance sheet position with leverage of 1.2 times the adjusted pro forma net debt: EBITDA, the group continued with its investment spend and acquisition of Mergent and share buyback programme. The group has also announced the acquisition of The Yield Book and Citi Fixed Income Indices, including the World Government Bond Index, for total cash consideration of $685 million (£535 million).

Management Opinion

Commenting on the results, Xavier Rolet, Group Chief Executive, said: “The Group has produced a strong financial performance, with good income growth across all of our core business areas. FTSE Russell and LCH OTC clearing services performed strongly, with double-digit growth at both businesses.

As well as continuing to deliver organic growth, during the period we announced the acquisition of The Yield Book and Citi Fixed Income Indices business. At our Investor Update in June, we set out targets for further strong financial performance, based on continued execution of our successful growth strategy. The Group remains well placed, diversified both by business activity and by geography. Our Open Access approach and strong customer partnerships also position us well for the implementation of MiFID II, starting in just over 20 weeks’ time.”

In an earlier June investor presentation, the group highlighted good progress in the execution of strategy, targeted revenue growth based on new information and cost control which will help operational efficiency and increase shareholder value.

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