London Stock Exchange Group (LSEG) reported its full year (FY) 2023 results today, with earnings in line with expectations despite a slight drop in profits. It was a tough year for equities trading, while IPOs were unsurprisingly down, but with data in the driving seat and ambitious plans for post-trade, CEO David Schwimmer took an optimistic stance.
Schwimmer said 2023 was “another strong year” for LSEG and the firm expects “further progress” in 2024. “We continued our track record of broad-based growth, despite an uncertain environment, and delivered on all the targets we set at the time of the Refinitiv acquisition.”
Total income for 2023 was up 8.3%, and up 7.7% excluding the 2023 Acadia acquisition, which was towards the upper end of the 6%-8% guidance range.
“In capital markets, we are collaborating more extensively with Tradeweb, creating new avenues for growth. We are also seeing an encouraging IPO pipeline for the London Stock Exchange,” said Schwimmer.
Capital markets did indeed put in a good showing, with 6.1% growth. However, there was a substantial drop in IPO and equity market trading – down 8.8%. Despite Schwimmer’s optimistic outlook – “we are also seeing an encouraging IPO pipeline for the London Stock Exchange” – the drop in IPOs reflects wider issues with UK and European capital markets, which have seen listings depart. LSEG said £18.8 billion of capital was raised through IPOs and follow-ons (FOs) on the London Stock Exchange in 2023 — 23 IPOs raised £1 billion and 315 FOs, completed by more than 230 companies, raised £17.9 billion.
On the bright side, LSEG’s data and analytics arm – which grew 7.3% – continued to drive the business, with “good progress” on the firm’s Microsoft partnership. The first AI and industry workflow products are expected in H1 2024.
The firm’s post trade division saw a 17.4% increase in 2023 against 2022, reflecting LCH growth and the firm’s Acadia acquisition, announced in December 2022. Acadia provides risk management, margining and collateral services to global financial institutions for the uncleared derivatives markets. “Our post trade business is in the early phase of its next stage of growth, helping financial institutions manage risk and improve capital efficiency across the whole trading book,” Schwimmer said
On the whole, however, the results were strong. The firm saw “significant” shareholder returns, with £1.2 billion returned via buybacks in 2023 and a plan to execute a further £1 billion of buybacks in 2024 from the Blackstone/Thomson Reuters consortium.
©Markets Media Europe 2024
