London Stock Exchange registers slight rise in income in Q3 2020
London Stock Exchange Group Plc (LON:LSE) today posted a trading statement for the third quarter of 2020.
Total income for the three months to end-September 2020 was £600 million, up 2% from the same period a year earlier.
- The Information Services segment registered revenues of £223 million for the third quarter of 2020, up 1% from a year earlier. The rise was up 4% on an organic and constant currency basis (up 4% on a nine-month year-to-date basis). Subscription revenue at FTSE Russell up 4% (up 7% on a constant currency basis) while asset-based revenues decreased 7% (down 3% on a constant currency basis) reflecting lower levels of passive fund AUM in the prior quarter, however, assets benchmarked against ETF products continued to rise.
- In Post Trade, income grew 5% to £259 million in the third quarter of 2020. The rise was 14% on a nine-month year-to-date basis. The Exchange notes good growth in non-OTC and Net Treasury Income. However, the segment saw decline in OTC revenues reflecting lower SwapClear volumes compared to elevated prior year period. Cost of Sales was down 17% due to one-off positive revenue sharing impact as a result of strong income generation in the nine months year-to-date; a further small benefit is expected in the fourth quarter of 2020.
- The Capital Markets segment registered revenues of £102 million in the third quarter of 2020, flat on prior year. The result was up 8% on a nine-month year-to-date basis and excluding the one-off benefit of an IFRS 15 adjustment in prior year. Primary markets revenue grew, with good further issuance activity. However, equities trading revenues edged lower as a result of reduced market activity.
London Stock Exchange also provided an update on the proposed acquisition of Refinitiv. LSEG says it continues to engage constructively with the European Commission on achieving antitrust approval for the transaction. The Exchange believes the proposed divestment of the Borsa Italiana group will significantly contribute to addressing EC concerns.
The Group has received further merger control clearances from the relevant authorities in the United States, Australia, Canada and the UAE, bringing the total number of approvals to date to 15 while good progress has been made in relation to outstanding jurisdictions. Furthermore, the Group also received foreign investment clearance from the Italian Government (‘Golden Power Law’) for the Refinitiv transaction, in addition to the approvals already received from the US (CFIUS) and Germany. All remaining merger control, foreign investment and regulatory approvals are expected by the first quarter of 2021.
Refinitiv continues to realise its own cost efficiencies having achieved annualised run-rate cost savings of $613 million as at 30 September 2020 and is on-track to achieve the full $650 million run-rate target by the end of 2020.