London Stock Exchange Group Plc (LON:LSE) has announced its interim quarterly results ended June 30, 2016.
Here are some of the highlights:
• Continued good financial performance with growth across all core business areas – in particular, in Information Services, including strong results at FTSE Russell, in Capital Markets and at LCH
• Revenue up 9% to £721.9 million (H1 2015: £663.0 million); total income up 11% to £785.8 million (H1 2015: £705.9 million)
• Adjusted operating profit2 up 9% at £333.3 million (H1 2015: £305.7 million) as operating expenses remained well controlled while continuing to invest in growth opportunities; operating profit of £199.0 million (H1 2015: £210.5 million)
• Profit after tax of £114.5 million (H1 2015: £130.8 million) which included non-recurring merger related expenses; and, after accounting for the previously announced tax effects of the Russell IM sale, becomes a loss after tax of £15.9million on a reported basis including discontinued operations (H1 2015: £165.1 million)
• Adjusted EPS2 up 16% at 57.7 pence (H1 2015: 49.9 pence); basic EPS down 18% to 27.4 pence (H1 2015: 33.4 pence)
• Interim dividend increased 11.1% to 12.0 pence per share (H1 2015: 10.8 pence per share) in line with our stated dividend policy
• Strong balance sheet position with leverage reduced to 1.3 x net debt:EBITDA
Strategic highlights:
• Merger with Deutsche Börse, announced in March 2016, making good progress – shareholder approvals achieved in July and work underway on regulatory consents
• Sale of Russell Investment Management successfully completed on schedule, for gross proceeds of US$1,150 million – resulting in an implied multiple of 18x EBITDA (pre synergies) for the retained, high growth Russell Indices business, now integrated with FTSE
• New products and services announced during the period, including LCH Spider, a new rates portfolio margining service, ELITE Club Deal, an online private placement platform for SMEs, and CurveGlobal, a derivative trading venture which is expected to launch in Q3 2016
• The Group is well positioned, as a diversified open access market infrastructure business, to navigate political and macroeconomic changes in the period ahead
Xavier Rolet, LSEG
Commenting on performance for the period, Xavier Rolet, Group Chief Executive, said:
The Group has delivered another good financial performance, with growth across all of our core business areas. In particular, FTSE Russell has performed well and LCH has made further good progress in its OTC clearing services. Our Capital Markets businesses have also performed well in a period marked by volatile market conditions.
The Group is well diversified both by business activity and by geography, with operations in the UK, continental Europe, United States and Asia. By successfully operating a full range of open access market infrastructure services, we are well positioned to navigate political and macroeconomic changes.
During the period, we announced our all share merger with Deutsche Börse, to create a global markets infrastructure group, anchored in Europe, with substantial revenue and cost synergies benefitting our customers and shareholders. We are delighted to have achieved shareholder approvals and are now focused on securing regulatory consents.”