London Stock Exchange commits to Refinitiv deal and posts strong results
London Stock Exchange has said it is making “good progress” on its planning for the $27bn (£22bn) takeover of Refinitiv, emphasising that it is still committed to the deal despite the coronavirus pandemic.
In its first quarter results, LSE said its gross profit rose 13 per cent to £555m. Its total revenue rose 10 per cent to £535m thanks to an increase in trading amid the market market volatility caused by coronavirus.
The stock exchange said it was “too early” to tell what the longer-term impact of the outbreak would be, but said it is in a good position to tackle the coming months.
London Stock Exchange and Refinitiv, which is 45 per cent-owned by Reuters, struck a $27bn merger deal last year. However, EU competition regulators have requested all merger filings be delayed due to coronavirus.
Nonetheless, LSE said its preparations were going ahead. “The group continues to make good progress on planning for the integration of Refinitiv,” it said. “A number of workstreams on business structure and opportunities, including synergy realisation, are well developed.”
The group also reported a strong set of financial results given the current climate. Revenue in its capital markets division rose 15 per cent year on year to £112m, driven by increased trading in shares.
Revenue in its post-trade division rose 12 per cent to £192m while information services revenue rose seven per cent to £215m.
London Stock Exchange said that it intends to pay its 2019 dividend in light of its strong results last year. Many banks across Europe have been lent on by regulators to pause their payouts.
The company said that “it is too early to comment specifically on the impact of the coronavirus pandemic on the outlook for LSEG” for the rest of the year despite a strong first quarter.
Nonetheless, LSE said it “strongly believes it has sufficient cash resources and access to liquidity to maintain continuity of business”.
Chief executive David Schwimmer said: “The Group has delivered a good financial performance and strong operational resilience during this unprecedented period. We have had a focus on ensuring orderly functioning of markets and continuity of service to customers.”
He added: “Although market conditions are likely to remain challenging in the coming period, we believe the group is financially strong and has the necessary resources to continue to operate effectively in this environment.”