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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
London Stock Exchange Group Plc | LSE:LSE | London | Ordinary Share | GB00B0SWJX34 | ORD SHS 6 79/86P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8,620.00 | 8,602.00 | 8,606.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMLSE
RNS Number : 0141U
London Stock Exchange Group PLC
19 October 2017
19 October 2017
LONDON STOCK EXCHANGE GROUP plc
INTERIM MANAGEMENT STATEMENT
FOR THE PERIOD TO 18 OCTOBER 2017, INCLUDING REVENUES AND KPIs FOR THE THREE MONTHSED 30 SEPTEMBER 2017 (Q3)
-- Another period of delivery against our targets with continued good growth - Q3 total income up 17% to GBP486 million; and up 19% for 9 months year-to-date, to GBP1,432 million
-- Q3 revenues up 18% to GBP443 million; up 18% for 9 months year-to-date at GBP1,295 million
-- Strong demonstration of capital deployment to drive growth and returns, including: completion of the Citi Fixed Income Indices and The Yield Book acquisition; increasing our stake in LCH; and, completion of the GBP200 million share buyback programme
Q3 summary:
-- Information Services: revenues up 22% (up 15% on organic and constant currency basis) - with good underlying growth and one month's inclusion of The Yield Book and Citi Fixed Income Indices
-- Post Trade: LCH income up 26% (up 22% at constant currency), with 23% revenue growth in OTC from higher volume of SwapClear client trades; ForexClear continues to see strong volume growth. CC&G and Monte Titoli income up 2% (down 4% at constant currency)
-- Capital Markets: revenues up 8% (up 5% on organic and constant currency basis), with record quarterly primary markets revenues in a period of strong equity issuance; Turquoise continues to trade well, with strong growth in the Turquoise Plato Block Discovery service (including a record month in September)
-- Technology Services: revenues up 9% (up 7% at constant currency)
Commenting on performance in Q3, Xavier Rolet, Chief Executive, said:
"The Group continues to perform very well, with good revenue growth in our main businesses and a strong period of successful development and delivery. The completion of the acquisition of Citi Fixed Income Indices and The Yield Book is already contributing to the further growth in FTSE Russell while LCH continues to perform strongly and has launched innovative new services. I am also delighted that we are increasing our stake in the LCH Group.
"The Group's excellent financial performance is reflective of our continued innovation and execution of our growth strategy, enabling us to deliver against our three year financial targets. Together with our proven Customer Partnership and Open Access approach, this positions us strongly to benefit from the introduction of MiFID II in less than three months time."
Organic growth is calculated in respect of businesses owned for at least 3 months in either period and so excludes The Yield Book and Citi Fixed Income Indices, ISPS, Mergent and SwapMatch. The Group's principal foreign exchange exposure arises from translating our European based Euro and US based USD reporting businesses into Sterling.
Investment in growth opportunities and new developments continued across the business:
- LSEG will increase its stake in LCH Group to 64.4% (on completion of regulatory processes before the end of 2017), acquiring an additional 6.63% following a sale by certain minority shareholders
- LCH SwapAgent service for non-cleared derivatives now live and has processed its first trades
- LCH RepoClear launched Sponsored Clearing, offering buy-side firms direct access to LCH for repos clearing across 11 government bond markets
- LCH signed binding terms with Euronext N.V. for the continued provision of clearing services for listed financial and commodity derivatives with LCH SA. The agreement is expected to be finalised in Q4 2017
- The Government Pension Investment Fund (GPIF) of Japan selected new FTSE Blossom Japan Index as a core ESG benchmark through its flagship fund
- Good flow of new issues on our UK and Italian markets, with a near doubling in the number of new issues year on year - in early October Borsa Italiana welcomed Pirelli to its market, the largest continental European IPO so far in 2017; together with Allied Irish Bank in the summer, the two largest European IPOs have been on Group markets
- Turquoise Lit Auctions, a pre-trade transparent and MiFID II compliant trading mechanism, received regulatory approval for Q4 2017 launch; and Turquoise Plato Block Discovery delivered record value traded in September (8 times the level of Q3 last year)
- CurveGlobal marked its first year in operation - the platform is building a firm foundation, with 1.5 million lots traded since launch (of which 40% of the volume traded was in the last three months)
- UK's Financial Conduct Authority approved London Stock Exchange to be authorised as an Approved Publication Arrangement (APA) and an Approved Reporting Mechanism (ARM) - enabling firms to meet their trade and transaction reporting obligations under MiFID II and MiFIR
- Borsa Italiana and IBM announced they are building a blockchain solution to digitise the issuance of securities for small and medium enterprises (SMEs) in Europe
- LSEG Technology completed the go-live of Millennium Exchange through a technology partnership with Caja de Valores S.A., which acts as the technology provider for Bolsas y Mercados Argentinos
- Gatelab has become an approved provider of risk gateway services for Bombay Stock Exchange
Financial Position
Refinancing to extend Group debt maturities was successfully completed in September. The Group issued EUR500 million 0.875% 2024 bonds and EUR500 million 1.75% 2029 bonds, of which an aggregate EUR700 million was immediately swapped into USD to appropriately match Group currency of debt to currency of earnings. The resulting effective blended rate of interest on the bonds is fixed at c2.8% per annum until the first maturity date.
The Group's financial position remains strong, with good cash generation from operations offset by normal course interim dividend and bond coupon payments, and the conclusion of the GBP200 million share buyback programme. We also continue to invest in projects to support growth initiatives. During the period the Group completed the acquisition of the Citi Fixed Income Indices and The Yield Book, paying US$685 million. At 30 September 2017, the Group's committed facility headroom was cGBP700 million, available for general corporate purposes.
The euro and US dollar both strengthened by 8% against sterling compared with the same period last year. To illustrate our exposure to movements in exchange rates, a EUR0.05 change in the average euro:sterling rate would have resulted in a change to continuing operations total income of cGBP6.9 million for Q3, while a US$0.05 move would have resulted in a cGBP4.8 million change.
Current trading
The Group continues to execute on its successful growth strategy to deliver attractive shareholder returns. All main parts of the Group continue to perform well and investment remains ongoing on a number of initiatives. We are well positioned for the introduction of MiFID II and a broader changing regulatory environment.
The Group released a separate statement this morning regarding succession planning.
Further information is available from:
Lucie Holloway/Ramesh Chhabra +44 (0) 20 7797 1222 London Stock Exchange - Media Group plc Paul Froud - Investor Relations +44 (0) 20 7797 3322
A conference call for analysts and investors will be held at 8:30 (UK time) on Thursday 19 October. On the call will be David Warren (CFO) and Paul Froud (Head of Investor Relations).
To access the telephone conference call dial 0800 694 0257 or +44 (0) 1452 555 566
Conference ID: 8705 3054
Q3 Revenue Summary
Revenues for three months and nine months ended 30 September 2017 refer to continuing operations, with comparatives against performance for the same period last year, are provided below. Growth rates for both Q3 and year to date performance are also expressed on an organic and constant currency basis. All figures are unaudited.
Organic Organic Three months and Nine months and ended constant ended constant 30 September currency 30 September currency ------------------------------ ----------------------------- 2017 2016 Variance variance(1) 2017 2016 Variance variance(1) Continuing operations: GBPm GBPm % % GBPm GBPm % % Revenue Information Services 181.8 148.5 22% 15% 536.7 434.4 24% 14% Post Trade Services - LCH 113.9 89.5 27% 24% 321.1 256.7 25% 19% Post Trade Services - CC&G and Monte Titoli 26.2 25.2 4% (2%) 81.5 73.3 11% 2% Capital Markets 96.7 89.6 8% 5% 286.3 271.2 6% 1% Technology Services 22.7 20.8 9% 7% 63.8 58.8 9% 3% Other 1.4 2.6 - - 5.9 3.7 - - ------------- -------------- -------------- --------- ------------ --------------- ------------ --------- ------------ Total
revenue 442.7 376.2 18% 13% 1,295.3 1,098.1 18% 11% Net treasury income through CCP businesses 42.0 35.3 19% 13% 116.8 91.3 28% 18% Other income 1.4 3.1 - - 19.4 11.0 - - --------- Total income 486.1 414.6 17% 12% 1,431.5 1,200.4 19% 12% ------------- -------------- -------------- --------- ------------ --------------- ------------ --------- ------------ Cost of sales (55.7) (44.8) 24% 20% (157.3) (121.8) 29% 22% Gross profit 430.4 369.8 16% 11% 1,274.2 1,078.6 18% 11% ------------- -------------- -------------- --------- ------------ --------------- ------------ --------- ------------
(1) Organic growth is calculated in respect of businesses owned for at least the full 3 or 9 months in either period and excludes The Yield Book and Citi Fixed Income Indices, ISPS, Mergent and SwapMatch. The Group's principal foreign exchange exposure arises from translating our European based euro and US based USD reporting businesses into sterling.
More detailed revenues by segment are provided in tables below:
Information Services
Organic Organic Three months and and Nine months ended constant ended constant 30 September currency 30 September currency ---------------- ---------------- 2017 2016 Variance variance(1) 2017 2016 Variance variance(1) GBPm GBPm % % GBPm GBPm % % Revenue FTSE Russell Indexes 135.3 102.1 33% 19% 395.8 295.7 34% 17% Real time data 23.0 23.3 (1%) (3%) 70.4 67.7 4% 1% Other information services 23.5 23.1 2% 18% 70.5 71.0 (1%) 11% Total revenue 181.8 148.5 22% 15% 536.7 434.4 24% 14% ---------------------------- ------- ------- --------- ------------ ------- ------- --------- ------------ Cost of sales (15.4) (13.6) 13% 8% (45.5) (38.5) 18% 9% ---------------------------- ------- ------- --------- ------------ ------- ------- --------- ------------ Gross profit 166.4 134.9 23% 15% 491.2 395.9 24% 14% ---------------------------- ------- ------- --------- ------------ ------- ------- --------- ------------
(1) Removal of Mergent (acquired Q1 2017) and The Yield Book and Citi Fixed Income Indices (acquired Q3 2017) from FTSE Russell and ISPS from Other information services (disposed Q1 2017)
Post Trade Services - LCH
Three months Nine months ended Constant ended Constant 30 September currency 30 September currency ---------------- ---------------- 2017 2016 Variance variance 2017 2016 Variance variance GBPm GBPm % % GBPm GBPm % % Revenue OTC - SwapClear, ForexClear & CDSClear 58.6 47.6 23% 21% 171.2 136.7 25% 19% Non-OTC - Fixed income, Cash equities and Listed derivatives 33.3 28.3 18% 12% 99.3 85.9 16% 7% Other 22.0 13.6 62% 59% 50.6 34.1 48% 51% ------- ------- --------- --------- ------- ------- --------- --------- Total revenue 113.9 89.5 27% 24% 321.1 256.7 25% 19% ----------------------------- ------- ------- --------- --------- ------- ------- --------- --------- Net treasury income 31.1 24.1 29% 23% 86.6 59.1 47% 36% Other income (0.5) 1.3 - - 6.5 5.7 - - Total income 144.5 114.9 26% 22% 414.2 321.5 29% 22% ----------------------------- ------- ------- --------- --------- ------- ------- --------- --------- Cost of sales (22.7) (15.8) 44% 36% (63.1) (39.0) 62% 49% ------- ------- ------- ------- Gross profit 121.8 99.1 23% 20% 351.1 282.5 24% 18% ----------------------------- ------- ------- --------- --------- ------- ------- --------- ---------
Post Trade Services - CC&G and Monte Titoli
Three months Nine months ended Constant ended Constant 30 September currency 30 September currency --------------- --------------- 2017 2016 Variance variance 2017 2016 Variance variance GBPm GBPm % % GBPm GBPm % % Revenue Clearing 8.9 10.0 (11%) (16%) 29.5 30.7 (4%) (12%) Settlement, Custody & other 17.3 15.2 14% 7% 52.0 42.6 22% 12% Total revenue 26.2 25.2 4% (2%) 81.5 73.3 11% 2% ----------------------- ------- ------ --------- --------- ------- ------ --------- --------- Net treasury income 10.9 11.2 (3%) (8%) 30.2 32.2 (6%) (14%) Total income 37.1 36.4 2% (4%) 111.7 105.5 6% (3%) ----------------------- ------- ------ --------- --------- ------- ------ --------- --------- Cost of sales (4.3) (3.1) 39% 30% (12.7) (8.8) 44% 34% ------- ------ ------- ------ Gross profit 32.8 33.3 (2%) (7%) 99.0 96.7 2% (6%) ----------------------- ------- ------ --------- --------- ------- ------ --------- ---------
Capital Markets
Organic Organic Three months and and Nine months ended constant ended constant 30 September currency 30 September currency --------------- ---------------- 2017 2016 Variance variance(1) 2017 2016 Variance variance(1) GBPm GBPm % % GBPm GBPm % % Revenue Primary Markets 29.6 21.1 40% 38% 77.3 65.3 18% 16% Secondary Markets - Equities 39.0 40.0 (3%) (4%) 122.9 123.1 (0%) (2%) Secondary Markets - Fixed income, derivatives and other 28.1 28.5 (1%) (6%) 86.1 82.8 4% (4%) Total revenue 96.7 89.6 8% 5% 286.3 271.2 6% 1% ------------------------------ ------- ------ --------- ------------ ------- ------- --------- ------------ Cost of sales (4.0) (5.5) (27%) (29%) (12.9) (17.2) (25%) (27%) ------- ------ ------- ------- Gross profit 92.7 84.1 10% 7% 273.4 254.0 8% 3% ------------------------------ ------- ------ --------- ------------ ------- ------- --------- ------------
(1) Removal of SwapMatch from Capital Markets (acquired Q3 2016)
Technology Services
Three months Nine months ended Constant ended Constant 30 September currency 30 September currency --------------- ---------------- 2017 2016 Variance variance 2017 2016 Variance variance Revenue GBPm GBPm % % GBPm GBPm % % MillenniumIT & other technology 22.7 20.8 9% 7% 63.8 58.8 9% 3% --------------------------------- ------- ------ --------- --------- ------- ------- --------- --------- Cost of sales (9.0) (6.5) 38% 41% (21.6) (17.1) 26% 20% ------- ------ ------- ------- Gross profit 13.7 14.3 (4%) (8%) 42.2 41.7 1% (5%) --------------------------------- ------- ------ --------- --------- ------- ------- --------- ---------
Basis of Preparation
Results for the period ended 30 September 2017 have been translated into Sterling using the average exchange rates for the period. Constant currency growth rates have been calculated by translating prior period results at the average exchange rate for the current period.
Average rate 9 months ended Closing rate at 30 September 30 September 2017 2017 --------------- GBP : EUR 1.15 1.13 ----------- --------------- ------------- GBP : USD 1.28 1.34 ----------- --------------- ------------- Average rate 9 months ended Closing rate at 30 September 30 September 2016 2016 GBP : EUR 1.25 1.15 ----------- --------------- ------------- GBP : USD 1.39 1.30 ----------- --------------- -------------
Appendix - Key performance indicators
Information Services As at 30 September Variance ------------------ 2017 2016 % ETF assets under management benchmarked ($bn) FTSE 345 246 40% Russell Indexes 227 176 29% ----------------------------- --------- Total 572 422 36% ----------------------------- -------- -------- --------- Terminals UK 69,000 73,000 (5%) Borsa Italiana Professional Terminals 116,000 129,000 (10%) Post Trade Services - LCH Three months ended Nine months ended 30 September Variance 30 September Variance --------------------- -------------------- 2017 2016 % 2017 2016 % OTC derivatives SwapClear IRS notional cleared ($tn) 197 160 23% 666 506 32% SwapClear members 105 105 0% 105 105 0% Client trades ('000) 313 232 35% 923 693 33% CDSClear Notional cleared (EURbn) 147 106 39% 445 348 28% CDSClear members 13 12 8% 13 12 8% ForexClear Notional value cleared ($bn) 3,097 630 392% 7,954 1,206 560% ForexClear members 28 24 17% 28 24 17% ------------------------------- ----------- -------- --------- --------- --------- --------- Non-OTC Fixed income - Nominal value (EURtn) 22.3 17.1 30% 65.2 52.1 25% Listed derivatives (contracts m) 33.7 28.5 18% 110.1 98.5 12% Cash equities trades (m) 194 166 17% 613 511 20% ------------------------------- ----------- -------- --------- --------- --------- --------- Average cash collateral (EURbn) 82.1 68.9 19% 85.0 63.8 33% Post Trade Services - CC&G and Monte Titoli Three months ended Nine months ended 30 September Variance 30 September Variance --------------------- -------------------- 2017 2016 % 2017 2016 % CC&G Clearing Contracts (m) 22.6 28.0 (19%) 82.7 96.4 (14%) Initial margin held (average EURbn) 9.4 11.7 (20%) 11.6 11.8 (2%) Monte Titoli Settlement instructions (trades m) 10.1 9.4 7% 33.0 32.0 3% Custody assets under management (average EURtn) 3.30 3.17 4% 3.26 3.17 3% Capital Markets - Primary Markets Three months ended Nine months ended 30 September Variance 30 September Variance --------------------- -------------------- 2017 2016 % 2017 2016 % New Issues UK Main Market, PSM & SFM 18 11 64% 60 36 67% UK AIM 25 11 127% 53 52 2% Borsa Italiana 10 5 100% 24 13 85% Total 53 27 96% 137 101 36% --------------------------- ---------- --------- --------- --------- --------- --------- Money Raised (GBPbn) UK New 2.5 0.3 733% 5.0 2.2 127% UK Further 3.8 4.0 (5%) 12.2 10.0 22% Borsa Italiana new and further 0.8 0.8 (2%) 13.7 4.7 191% Total (GBPbn) 7.1 5.1 39% 30.9 16.9 83% --------------------------- ---------- --------- --------- --------- --------- --------- Capital Markets - Secondary Markets Three months ended Nine months ended 30 September Variance 30 September Variance --------------------- -------------------- Equity 2017 2016 % 2017 2016 % Totals for period UK value traded (GBPbn) 327 310 5% 1,010 947 7% Borsa Italiana (no of trades m) 15.1 16.6 (9%) 52.6 57.2 (8%) Turquoise value traded (EURbn) 225 325 (31%) 781 1,085 (28%) SETS Yield (basis points) 0.63 0.63 0% 0.63 0.63 0% Average daily UK value traded (GBPbn) 5.1 4.8 6% 5.3 5.0 6% Borsa Italiana (no of trades '000) 237 255 (7%) 275 298 (8%) Turquoise value traded (EURbn) 3.5 4.9 (29%) 4.1 5.6 (27%) Derivatives (contracts m) LSE Derivatives 1.5 0.9 67% 4.7 3.3 42% IDEM 6.6 10.2 (35%) 27.1 35.4 (23%) Total 8.2 11.1 (26%) 31.8 38.7 (18%) --------------------------- ---------- --------- --------- --------- --------- --------- Fixed Income MTS cash and BondVision (EURbn) 733 982 (25%) 2,635 3,024 (13%) MTS money markets (EURbn term adjusted) 17,385 19,305 (10%) 58,740 63,730 (8%)
Total Income - Quarterly
CY CY 2016 2017 GBP millions Q1 Q2 Q3 Q4 CY 2016 Q1 Q2 Q3 -------------- -------------- -------------- -------------- ------- ------------- ---------------- Primary Markets 22.2 22.0 21.1 25.5 90.8 21.3 26.4 29.6 Secondary Markets - Equities 42.2 40.9 40.0 41.8 164.9 42.0 41.9 39.0 Secondary Markets - Fixed income, derivatives & other 28.0 26.3 28.5 29.8 112.6 30.4 27.6 28.1 ------------- -------------- -------------- -------------- -------------- ------------- ------- ------------- ---------------- Capital Markets 92.4 89.2 89.6 97.1 368.3 93.7 95.9 96.7 Clearing 10.6 10.1 10.0 11.8 42.5 10.7 9.9 8.9 Settlement, Custody & other 12.9 14.5 15.2 18.6 61.2 17.0 17.7 17.3 ------------- -------------- -------------- -------------- -------------- ------------- ------- ------------- ---------------- Post Trade Services - CC&G and Monte Titoli 23.5 24.6 25.2 30.4 103.7 27.7 27.6 26.2 OTC - SwapClear, ForexClear & CDSClear 44.6 44.4 47.6 54.0 190.6 56.8 55.8 58.6 Non OTC - Fixed income, Cash equities & Listed derivatives 28.6 29.1 28.3 30.5 116.5 32.9 33.1 33.3 Other 11.1 9.3 13.6 15.4 49.4 16.0 12.6 22.0 ------------- -------------- -------------- -------------- -------------- ------------- ------- ------------- ---------------- Post Trade Services - LCH 84.3 82.8 89.5 99.9 356.5 105.7 101.5 113.9 FTSE Russell Indexes 96.4 97.1 102.1 113.7 409.3 126.7 133.8 135.3 Real time data 22.7 21.8 23.3 23.1 90.9 23.0 24.4 23.0 Other information 22.4 25.5 23.1 23.5 94.5 23.9 23.1 23.5 ------------- ------- ------------- ---------------- Information Services 141.5 144.4 148.5 160.3 594.7 173.6 181.3 181.8 Technology Services 16.2 21.9 20.8 29.4 88.3 20.5 20.6 22.7 Other 1.0 0.1 2.6 0.4 4.1 1.4 3.2 1.4 Total Revenue 358.9 363.0 376.2 417.5 1,515.6 422.6 430.1 442.7 Net treasury income through CCP: CC&G 10.3 10.7 11.2 10.4 42.6 9.8 9.6 10.9 LCH 17.6 17.4 24.1 23.1 82.2 24.2 31.3 31.1 Other income 0.8 7.1 3.1 5.7 16.7 4.1 13.8 1.4 Total income 387.6 398.2 414.6 456.7 1,657.1 460.7 484.8 486.1 ------------- -------------- -------------- -------------- -------------- ------------- ------- ------------- ---------------- Cost of sales (35.3) (41.7) (44.8) (53.0) (174.8) (50.4) (51.2) (55.7) Gross profit 352.3 356.5 369.8 403.7 1,482.3 410.3 433.6 430.4 ------------- -------------- -------------- -------------- -------------- ------------- ------- ------------- ----------------
Note: Minor rounding differences may mean quarterly and other segmental figures may differ slightly
This information is provided by RNS
The company news service from the London Stock Exchange
END
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