The London Stock Exchange Group PLC (LSEG) announced its annual results today, showcasing robust performance across various business segments. The company confirmed that it has successfully met all targets for acquiring Refinitiv. It is poised to unveil its first artificial intelligence (AI)-based products through its partnership with Microsoft Corp.
LSEG reported a pretax profit of GBP1.20 billion for the fiscal year 2023, representing a marginal decrease of 3.7% from the previous year. However, total income, including recoveries, surged by 8.2% to reach GBP8.38 billion, marginally surpassing market expectations. The income growth was widespread across the organization, with notable increases in Data & Analytics, Capital Markets, and post-trade segments.
Despite the slight dip in pretax profit, LSEG declared a final dividend of 79.3 pence per share, resulting in a full-year dividend of 115.0p, marking a 7.5% increase from the previous year. Additionally, the company announced plans for GBP1 billion in share buybacks for 2024, a slight reduction from GBP1.2 billion in the preceding year. These buybacks will be conducted directly from the Blackstone/Thomson Reuters consortium, one of the major shareholders in LSEG following the Refinitiv acquisition.
Microsoft partnership bears fruit
LSEG’s collaboration with Microsoft Corp. has yielded promising results, with the imminent release of AI-based products slated for the first half of 2024. Under the 10-year cooperation agreement signed in 2022, Microsoft acquired a 4.2% stake in LSEG, intending to develop innovative market data and financial markets infrastructure solutions jointly. The CEO of LSEG, David Schwimmer, expressed confidence in the transformative impact of this partnership, stating that it will revolutionize how financial market participants engage, research, analyze data, and trade.
Amid concerns regarding New York’s dominance in attracting major initial public offerings (IPOs), LSEG remains optimistic about the IPO landscape in London. CEO Schwimmer highlighted the company’s positive outlook, noting an encouraging IPO pipeline for the London Stock Exchange. This sentiment underscores LSEG’s commitment to maintaining its position as a leading global financial market infrastructure provider.
Market reaction
Despite the positive performance in the annual results, LSEG’s shares experienced a modest decline of 2.2% to 8,716.27 pence in early London trading on Thursday. The market reaction reflects a cautious sentiment among investors, possibly influenced by broader market dynamics and economic uncertainties.
The London Stock Exchange Group PLC’s annual results underscore its resilience and adaptability in navigating the evolving financial landscape. With strong financial performance, strategic partnerships, and a commitment to innovation, LSEG remains well-positioned to capitalize on emerging opportunities and drive sustained growth in the global financial markets.
