By Huw Jones
LONDON (Reuters) – London Stock Exchange Group on Thursday reaffirmed financial targets for the year and secured shareholder approval for a previously announced buyback of shares from the Blackstone/Thomson Reuters consortium.
LSEG bought data and analytics company Refinitiv for $27 billion from the consortium in January 2021. The group’s traditional exchange activities date back more than 300 years.
“As we continue our shift from integration to transformation, we are confident of making further progress through the rest of the year,” LSEG Chief Executive David Schwimmer said in a first-quarter trading update.
The company said it had also made further progress with an on-market 750 million pound buyback programme, completing the second 250 million pound tranche in March, with the final tranche expected to be completed by July.
Shareholders at LSEG’s annual meeting on Thursday voted overwhelmingly in favour of a directed share buyback from the Blackstone/Thomson Reuters consortium, expected to be up to 750 million pounds by April 2024.
LSEG is well positioned in the current climate, its strategy is working, and the company continues to generate a lot of cash, Schwimmer told the annual meeting.
“2023 will be an important year in LSEG’s transformation. We are starting to see meaningful benefits from the investments we’ve been making in the past few years,” Schwimmer said.
Thomson Reuters holds a minority stake in LSEG, which pays Reuters for news.
LSEG said that first-quarter income from data and analytics rose 14.6% year on year to 1.3 billion pounds.
Total income excluding recoveries rose 14.6% to 2 billion pounds, 1% ahead of consensus according to Jefferies research.
Gross profit rose 13.9% to 1.8 billion pounds.
“In data & analytics, we saw a further acceleration in annual subscription value (ASV) growth, reflecting the investments we have made in our services and stronger customer engagement,” Schwimmer said.
Banks are major customers of LSEG and Schwimmer said sector consolidation from the forced takeover of Credit Suisse by UBS would have no impact on the company this year.
“We may see a very, very modest impact in 2024 and 2025, just as UBS works through that,” Schwimmer told an analysts call.
Jefferies said that ASV growth was “highly impressive” and ahead of market expectations.
LSEG shares were up 0.7% at 1215 GMT.
($1 = 0.8015 pounds)
(Reporting by Chandini Monnappa in Bengaluru and Huw Jones in London; Editing by David Goodman and Mark Potter)
