London Stock Exchange Group revealed its profits had jumped in the first half of the year as the bourse owner prepares to launch a suite of products from its collaboration with Microsoft.
In its half-year results today, the owner of the London Stock Exchange said operating profits had risen to £1.56bn, up from £1.43bn the year before, and just ahead of the market’s expectations of £1.53bn.
The profit surge came mainly from a five per cent rise in income for the group to £4.2bn, slightly beating analyst expectations and offsetting to 2.4 per cent increase in costs over the six months.
LSEG’s annual subscription value, which is a key indicator of recurring revenue closely watched by analysts, rose 6.4 per cent by the end of June, in line with guidance from the group and up from six per cent in the first quarter.
Joint product development with Microsoft, which it entered into a strategic partnership with last summer, is “on-track”, the stock exchange group said, with the first products ready for general availability before the end of the year.
However, CEO David Schwimmer had said in LSEG’s April results that he expected “a number of products expected to be in external pilot or general release” in the first half of the year, with any launch seemingly delayed to the next few months.
All arms of LSEG’s business posted a rise in performance over the six months to June, with capital markets growing 17.4 per cent, FTSE Russell and Risk Intelligence growing 11.5 per cent each, and data & analytics increasing 4.3 per cent.
The stock exchange group has bought back a billion pounds in shares since the start of 2024, which were direct holdings of the Blackstone-led investor group that offloaded a four per cent stake in the business earlier this year. The share overhang of that investor group is now under two per cent.
Schwimmer said: “We have finished the first half strongly, maintaining our momentum in Q2 with every business line contributing to revenue growth. This reflects the strength of our proposition, the improvements we have made to our products and the depth of our relationships with customers.
“Our high pace of innovation continues. We have made significant enhancements to Workspace, leading to several competitor displacements,” he added. “We are building on our leadership in data, expanding our pricing and reference content substantially and adding over 70 new feeds to our low-latency data coverage. The recent strategic partnership with Dow Jones also brings leading breadth in news coverage.”
The group’s FTSE Russel business saw “strong demand” while its post trade solutions division is “gaining momentum”, Schwimmer added.
“Our partnership with Microsoft is approaching commercialisation as the first product becomes more widely available by year-end,” he said.
“We are also delivering efficiency improvements, with underlying margin improving year-on-year despite ongoing investment, and we expect this trend to continue. We look forward to further progress in the second half of the year, and are reiterating all of our medium-term guidance.”