London Stock Exchange Group reports double-digit earnings growth

Income at the London Stock Exchange (LSE) soared 13 per cent to £520m for the first quarter of the financial year, as the exchange welcomed double-digit growth for information services, LCH and capital markets.

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The figures

The growth was largely driven by a 16 per cent increase in revenue on the same time last year, from information services on a constant currency basis as well as double digit growth at FTSE Russell.

Income from the LCH group was also up 18 per cent, or 20 per cent on constant currency, while OTC trade brought in a 15 per cent revenue increase from record volumes at SwapClear and ForexClear.

Meanwhile, capital markets revenues were up 14 per cent (13 per cent at constant currency), while technology services revenues were down five per cent. Revenues there dropped by a more substantial 37 per cent when taking into account the sales of MillenniumIT ESP and Exactpro businesses.

Why it's interesting

The results come months before former Goldman Sachs banker David Schwimmer joins the LSE as its new chief executive on 1 August.

Schwimmer succeeds Xavier Rolet, who left amid a bitter public row with an investor to oust the group's chairman, which was sparked by the announcement in November 2017 that Rolet would step down as chief executive.

The board of the FTSE 100 firm eventually beat off the attempt by Sir Chris Hohn to remove Donald Brydon as chairman. According to Sky News, Hohn has offered his backing to Schwimmer.

Today's results are broadly unchanged from those reported in December last year. However, the good results reflect that in March this year over £750m was made available for general corporate purposes.

Last month, Standard & Poor changed its rating of the group from a stable to a positive outlook. Moody still rates the exchange with a stable outlook.

What LSEG said

Interim CEO and Group CFO David Warren said increasing the stakes in LCH and FTSE TMC global debt capital markets were examples of the group developing good growth opportunities.

"The group has delivered a strong first quarter performance. All of our key businesses continue to perform well, with strong growth in FTSE Russell, LCH and capital markets," he said.

During the period, we further increased our stake in LCH and acquired full ownership of the FTSE TMX global debt capital markets business. We continue to invest in new product initiatives while maintaining a focus on improving efficiencies as we work to deliver on our financial targets. The group is strategically well placed to further develop its many growth opportunities, working in partnership with our customers.

Read more: The London Stock Exchange Group has appointed a new boss

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