London Stock Exchange reports 'resilient' third quarter
By Josh White
Date: Friday 23 Oct 2020
(Sharecast News) - London Stock Exchange Group reported a "resilient" performance in its third quarter on Friday, despite "challenging" market conditions, with third quarter total income up 2% to £600m.
The FTSE 100 company said that on a nine-month year-to-date basis, total income was up 6% to £1.84bn.
In its information services business, revenues in the quarter were up 1% to £223m, and up 4% on an organic and constant currency basis.
Subscription revenue at FTSE Russell was ahead 4%, or 7% on a constant currency basis, while asset-based revenues decreased 7%, or 3% on a constant currency basis, which the board said reflected lower levels of passive fund assets under management in the prior quarter, although assets benchmarked against exchange-traded fund products continued to rise.
In its post trade division, income was ahead 5% to £259m, or up 14% on a nine-month year-to-date basis.
LSE said it saw good growth in non-over the counter and net treasury income, while a decline in over the counter revenues reflected lower SwapClear volumes compared to the elevated prior year period.
It said the cost of sales was down 17%, due to a one-off positive revenue sharing impact as a result of strong income generation in the nine months year-to-date, with a further small benefit expected in the fourth quarter.
The company's capital markets division revenues were flat on the prior year at £102m, but up 8% on a nine-month year-to-date basis and excluding the one-off benefit of an IFRS 15 adjustment in the prior year.
Primary markets revenue was higher, with good further issuance activity, while equities trading revenues was lower as a result of reduced market activity.
LSE said it had continued to demonstrate strong operational resilience, focusing on continuity of service for customers and the welfare of employees, the majority of which were still working remotely due to the Covid-19 pandemic.
It said it was "well-positioned" for Brexit with a diversified revenue mix.
The proposed acquisition of Refinitiv was also progressing, with additional merger clearances achieved and the conditional divestment of Borsa Italiana to Euronext agreed.
LSE said it expected to complete the Refinitiv transaction in the first quarter of 2021.
"The group delivered a resilient performance in the quarter against a challenging market backdrop while we continue to execute our strategic plans across our business," said chief executive officer David Schwimmer.
"We remain focused on our strong operational resilience, continuity of services to our customers and market participants, and the wellbeing of our employees, the majority of whom continue to."
Schwimmer said the company was making "good progress" on the "highly attractive" Refinitiv transaction, having secured further regulatory approvals around the world.
"We continue to engage constructively with the European Commission and believe the potential divestment of the Borsa Italiana group will contribute significantly to addressing the EU's competition concerns."
At 0939 BST, shares in London Stock Exchange Group were down 0.45% at 8,478p.
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