By Huw Jones
LONDON (Reuters) -London Stock Exchange Group reported first-half income above analysts’ expectations on Thursday, helped by progress with its Microsoft joint venture, as well as a rise in annual subscription value, an indicator of customer retention.
LSEG, which suffered outages in February and this month, said its partnership with Microsoft is “approaching commercialisation” as the first product becomes more widely available by year-end.
The exchange, transformed into a data powerhouse after its $27 billion acquisition of Refinitiv in 2021, reiterated all medium-term guidance of mid to high single digit organic revenue growth annually, accelerating after this year.
LSEG shares opened 2% higher.
“We are also delivering efficiency improvements, with underlying margin improving year-on-year despite ongoing investment, and we expect this trend to continue,” LSEG CEO David Schwimmer, said in a statement.
“We look forward to further progress in the second half of the year, and are reiterating all of our medium-term guidance.”
LSEG had made significant enhancements to Workspace, which distributes news and data to customers, resulting in “several competitor displacements”, Schwimmer said.
LSEG’s total income excluding recoveries rose 5.4% to 4.204 billion pounds ($5.40 billion), topping an analysts’ consensus of 4.195 billion pounds.
Operating profit in the first half rose 9% to 1.563 billion pounds, with adjusted earnings per share of 174 pence, up 8.1% on the same period last year, both ahead of analysts’ consensus estimates collated by LSEG.
Annual subscription value, which reflects recurring revenue and closely watched by analysts, was up 6.4% at June 2024, in line with guidance, and up from 6% in the first quarter.
“All medium-term targets have been reiterated, and we think notably more confident commentary of competitor displacements around Workspace will be taken well,” analysts at RBC said in a note to clients.
LSEG said its content agreement with Dow Jones announced in July creates a leading news offering across its platforms.
LSEG pays Reuters for news.
($1 = 0.7785 pounds)
(Reporting By Huw Jones, editing by Sinead Cruise and Jane Merriman)
