LSE Group set for more muted fourth quarter after strong Q3

The FTSE 100 company said it made good progress on the integration of Refinitiv, and was “comfortably on target” for full year run-rate cost synergy delivery of £125m, ahead of original phasing.

A total of 10 new products were launched in the third quarter as part of the revenue synergy programme, taking the total to 37 in the year-to-date.

Data and analytics revenue grew 6.0%, and was still performing well with growth in annual subscription value increasing to 4.0% at the end of the third quarter from 3.9% at the first half, which the board said reflected strength in subscription-based new business wins.

Capital markets revenue grew 17.2%, which LSEG said was driven by double-digit growth at Tradeweb, strong primary issuance within equities, and good dealer-to-client volumes at FXall.

Post-trade revenue grew 11.5%, which was put down to increased clearing activity from both new and existing customers.

Total income there was up 2.3%, reflecting lower investment returns in net treasury income compared to a “strong comparator” in the third quarter of 2020.

Year-to-date total income expanded by 5.6%, reflecting “good performance” across the group.

As it had previously guided, LSEG expected total income to grow between 4% and 5% for the full year, with fourth quarter income not expected to grow as fast as the third on a constant currency basis due to the strong comparator in 2020.

The company said there was no change to its previous cost or capital expenditure guidance, although supply chain pressures could impact the timing of some technology spend this year.

“The group has delivered a strong third quarter financial performance, with revenue growth across all divisions,” said chief executive officer David Schwimmer.

“We are making excellent progress on the integration of Refinitiv and are comfortably on-track to achieve £125m of cost synergies in 2021, ahead of our original phasing.”

Schwimmer said the company was executing across a number of workstreams to deliver its target revenue synergies.

“The group is well-placed as we make targeted investments in product and technology enhancements to help us meet the needs of our customers and capitalise on the growth trends driving change across our industry.”

At 0906 BST, shares in London Stock Exchange Group were down 3.96% at 7,764p.