19 October 2023
If you are covering the London Stock Exchange Group’s Q3 results, please see the following comment from Will Howlett, equity research analyst at Quilter Cheviot:
“The London Stock Exchange Group (LSEG) today announced its Q3 results, and overall, they’re holding steady. Its reported revenue aligns with predictions, marking a welcome recovery after a slight slowdown in recurring revenues in Q2. Particularly noteworthy was the performance of the Post Trade and Capital Markets sectors. Both segments outperformed expectations, a success attributed to market volatility. On the other hand, the Data & Analytics division, which significantly contributes to its revenue, experienced a slight underperformance.
“LSEG’s Q3 income came in at £1,966 million, nearly matching expert forecasts. The Data & Analytics sector, which accounts for roughly two-thirds of the LSEG's income, saw a growth of 7%. Its annual subscription value, a reliable indicator of recurring revenue, edged up to 7.1%. Although it's a rise from the previous quarter, it's still a tad shy of its peak performance earlier in the year. Meanwhile, the Post Trade division, responsible for about 15% of the income, experienced a robust 9% growth. The Capital Markets sector, making up 19% of the income, enjoyed a 6% growth, surpassing projections.
“LSEG reiterated its guidance of delivering at the upper end of its 6-8% growth in its total income and is set on achieving a profit margin hovering around 48%. Its stock value, while currently trading slightly below its historical average, has shown a promising uptick.
“The acquisition of Refinitiv, completed in January 2021, transformed the group by increasing scale and asset class coverage as well as enhanced data and analytics capabilities. The deal significantly expanded the group's global footprint as well as improving the proportion of recurring revenues.”
