London Stock Exchange Group PLC (LSE:LSEG)’s interim earnings report comes at a gruelling time for the capital markets, with IPO activity almost non-existent and competitive savings rates presenting investors with a genuine alternative to equities.
However, the group penned total income excluding recoveries of £3.99 billion in the six months ended 30 June 2023, matching City expectations.
Gross profits came to £3.6 billion, encouraged by a strong showing in data and analytics and post-trade solutions.
Operating profit of £729 million was around 19% lower year on year, with basic earnings per share falling 21% to 77.2p.
Underlying earnings (EBITDA) saw a low-single-digit increase to £1.87 billion, though margins fell 3.5 percentage points to knock below 47% due to foreign exchange-related balance sheet adjustments.
Operating expenses, which have been a bone of contention for shareholders lately, matched forecasts at £1.73 billion due to ongoing operational costs and investment for growth.
Net cash flows remained steady at £1.1 billion, with cash and cash equivalents at the end of the period increasing to £3.5 billion.
The proposed interim dividend is 35.7p per share, a 12.6% year-on-year increase. On that note, LSEG paid out £415 million in dividends in May per the full-year 2022 dividend agreement.
LSEG returned £400 million to shareholders via share repurchases in the first half, with a further £50 million repurchased in the post period, thus completing the £750 million share buyback scheme announced in August 2022.
For the full-year 2023 outlook, LSEG expects total income to grow by six to eight percent with an EBITDA margin of 48%.
Chief executive David Schwimmer commented: "Post trade once again demonstrated the critical role it plays in helping customers manage risk in uncertain markets, delivering outstanding growth. Our capital markets businesses also made progress, despite a very strong prior period.
"LSEG's resilient business model and the quality of our earnings, diversified by customer, geography, product and asset class, position us well for further growth in the second half and beyond."