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By Abhinav Ramnarayan
LONDON (Reuters) -London Stock Exchange Group reported a rise in first-half revenue on Friday, flagging progress integrating data giant Refinitiv and rewarding investors with a dividend increase.
Its shares were up around 4% at 0815 GMT, topping both London’s blue chip FTSE 100 index and Europe’s STOXX 600 after the British stock market operator said total revenue rose 4.6% to 3.36 billion pounds ($4.67 billion). Operating profit jumped to 1.17 billion pounds from 457 million pounds a year earlier.
Its performance was helped by a 9.6% rise in its capital markets revenue as stock market listings enjoyed their best first half since 2014 and fixed income volumes also rose.
“We have had a terrific first half of the year – capital raising is very robust and a number of companies have been coming to market,” chief executive David Schwimmer told reporters.
He added he expected the rest of 2021 to remain busy for initial public offerings and a modest number of special purpose acquisition companies to list.
JP Morgan analysts welcomed what they called “a strong set of results,” saying adjusted core earnings were around 5% ahead of consensus and noting improved cost controls.
The 300-year-old bourse is trying to transform into a one-stop shop for data, trading and analytics with its $27 billion takeover of Refinitiv. However the costs of absorbing the data provider have worried some investors, sending its shares down 20% since early March when it gave more details on the integration.
The group said on Friday that about 77 million pounds of cost savings from the Refinitiv deal have been realised so far. It saw those rising to 125 million pounds by the end of the year, up from its previous 88 million pound forecast.
However, LSEG warned that it expected further cost increases in the second half of 2021, caused by the return of costs, such as travel, that were affected by the coronavirus pandemic as well as ongoing expenses from legacy IT and inflation.
It said it would pay an interim dividend of 25 pence per share, a rise of 7% from a year ago.
Schwimmer said the company had identified and was addressing the cause of problems with Refinitiv’s news and data platform Eikon after a number of outages this year. .
Refinitiv was carved out from Thomson Reuters (NYSE:TRI), parent of Reuters News, in 2018 by a consortium led by Blackstone (NYSE:BX) before being bought by LSEG in a deal finalized in January 2021. Thomson Reuters now holds a minority stake in the group following that deal, and Refinitiv pays Thomson Reuters for news it distributes on its terminals.
($1 = 0.7184 pounds)
