LSEG reports first-half growth, shares slide

(Sharecast News) - London Stock Exchange Group shares were in the red on Thursday morning, even after it reported a robust set of interim results for the six months ended 30 June, with strong growth across all business divisions and a significant increase in profitability. The results prompted the FTSE 100 self-listed exchange operator to upgrade to its full-year margin guidance and the launch of a new £1bn share buyback programme.

Total income excluding recoveries rose by 6.8% to £4.49bn on a reported basis, or 7.8% at organic constant currency.

Adjusted earnings per share climbed 20.1% to 208.9p, while reported basic earnings per share nearly doubled, up 89.6% to £122.7m.

Adjusted EBITDA grew 9% to £2.22bn, lifting the group's EBITDA margin by 100 basis points to 49.5%.

Chief executive David Schwimmer said the group had delivered "strong and consistent growth," driven by resilient subscription businesses and "upside from increased volatility in the period".

"At the same time, we have improved our margins strongly as we realise the benefits of our ongoing transformation and deliver attractive operating leverage," he said.

All business units reported growth, with market revenue up 10.7%, risk intelligence up 12.2%, FTSE Russell up 7.6%, and data and analytics up 5.1%.

Strong operational performance helped lift adjusted operating profit by 10.4% to £1.73bn.

LSEG returned £500m to shareholders via buybacks in the first half and announced plans for an additional £1bn to be executed over the coming months.

The interim dividend was raised 14.6% to 47p per share.

LSEG also reaffirmed its commitment to inorganic growth, noting it continued to evaluate acquisition opportunities.

"We have built a business which is strategically aligned to a number of powerful growth drivers," Schwimmer said, citing demand for data, the digitisation of markets, and risk management needs.

"We continue to make significant investments in product innovation for our customers, to generate growth over the long term."

Innovation continued in the first half, the board said, with 250 Workspace enhancements, the launch of DigitalAssetClear and Treasury Futures clearing, and expanded Microsoft integrations including Excel and PowerPoint Workspace add-ins.

LSEG said it now expected its constant currency EBITDA margin to expand by 75 to 100 basis points in 2025, up from previous guidance of 50 to 100 basis points.

Other full-year targets remained unchanged, including total income growth of 6.5% to 7.5% and equity free cash flow of at least £2.4bn.

At 0945 BST, shares in London Stock Exchange Group were down 3.86% at 9,667p.

Reporting by Josh White for Sharecast.com.