LSE Group Rises as Strong 1H Results Prompts Buyback and Dividend Hike

By Geoffrey Smith 

Investing.com -- London Stock Exchange Group (LON:LSEG) shares rose on Friday as the company raised its dividend and announced a new buyback after posting better-than-expected results for the first half of the year. 

The company announced a new 750 million pound ($911 million) buyback and raised its half-year dividend 27% to 31.7 pence a share. That reflected a 24% rise in total income from a year earlier to 3.6 billion pounds. 

The stock rose 2.3% by 04:30 AM ET (0830 GMT) to a four-month high. 

LSE, whose future has been clouded by the uncertain state of relations between the U.K. and EU in the wake of Brexit, said revenue grew at all of its divisions in the period, with strong performances in after-trade and capital markets in particular. Volatile trading conditions in the period led to a sharp increase in trading activity, fees from which offset a dearth of new listings in its biggest marketplace. 

Higher volatility in interest rates meant that there were double-digit rises in revenue at the divisions that handle swaps and other over-the-counter derivatives, as well as at Tradeweb, where it holds a stake of 52.7%.

While the company didn't break out performance at Refinitiv, the data provider which it bought for $27 billion last year, it said that revenue from data&analytics - the division which houses Refinitiv - rose 4% on the year, or by 5% when excluding the Russian and Ukrainian markets. 

Chief executive David Schwimmer said that the group has "good momentum going into the second half" and forecast an improvement in underlying profitability by the end of next year. It expects adjusted margin before interest, taxes, depreciation and amortization to rise to over 50% by 2023 from 48.8% in the first half of 2022. As such, the company upheld its previous guidance for the current year.