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(Alliance News) - London Stock Exchange Group on Friday said it delivered a strong financial performance in 2020, saying revenue growth continued across its businesses as it prepared to take on new acquisition Refinitiv.
For 2020, LSEG posted total revenue of GBP2.12 billion, up 2.9% from GBP2.06 billion in 2019, and total income rose 6% to GBP2.44 billion from GBP2.31 billion. The figures were in-line with company-compiled consensus forecasts.
Capital Markets revenue was up 8% on a like-for-like basis. Post Trade revenue was up 7%, driven by clearing house LCH. Revenue at index provider FTSE Russell rose by 3%.
LSEG noted that more than GBP718 billion was raised on its fixed income markets, of which GBP75 billion was raised through Covid-19 response bonds.
LSEG reported pretax profit of GBP685 million in 2020, up 5.2% from GBP651 million in 2019.
The stock exchange operator declared a total dividend of 75.0 pence, up 7.1% from 70.0p paid out in 2019. This also was as expected. Analysts had predicted LSEG to up its payout for 2020 to 75.2p.
LSEG hailed its "transformational" acquisition of Refinitiv saying it will ramp up its growth strategy and position as a leading global financial markets infrastructure and data provider by adding leading data, analytics and multi-asset class capital markets capabilities.
Refinitive was bought for USD27 billion and received its final regulatory approvals in January.
Through its market data terminals and trading platforms, including FXAll and Tradweb, Refinitiv has over 40,000 customer institutions across 190 countries. The Refinitiv data platform has more than 150,000 data sources, as well as Reuters news.
Now that deal is completed, Refinitiv's former shareholders - Thomson Reuters and a consortium of investments funds affiliated with Blackstone Group - own about a 37% economic interest and a 29% voting interest in LSEG.
"The group is well positioned for future growth despite an uncertain macro-economic and regulatory environment. The group will also continue to invest in new products and services as well as operational excellence and resiliency," said Chief Executive Officer David Schwimmer.
LSEG shares were down 4.3% early Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.8% at 6,596.44
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Hang Seng: down 0.4% at 29,133.65
Nikkei 225: closed down 0.2% at 28,864.32
DJIA: closed down 345.95 points, 1.1%, at 30,924.14
S&P 500: closed down 1.3% at 3,768.47
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EUR: down at USD1.1960 (USD1.2047)
GBP: down at USD1.3865 (USD1.3989)
USD: up at JPY108.20 (JPY107.56)
Gold: down at USD1,699.55 per ounce (USD1,718.65)
Oil (Brent): up at USD67.82 a barrel (USD67.11)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
0830 GMT UK Halifax house price index
1100 GMT Ireland gross domestic product
0830 EST US jobs report for February
0830 EST US international trade in goods & services
1500 EST US consumer credit
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The annual decline in UK retail footfall eased in February, though the drop was still steep as the country remained in lockdown. According to the latest British Retail Consortium-Sensormatic monitor, UK retail footfall dropped 74% in February. This was a lesser decline than January's 82% drop, but was the second-worst fall since May. In high streets, footfall dropped 68% year-on-year in February. This was a worse showing than the average three-month decline of 61%. In retail parks, footfall dropped 35% annually in February, compared to the three-month average drop of 29%. While at shopping centres, footfall tumbled 76% in February, steeper than the three-month average drop of 64%.
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The ongoing national lockdown in the UK has continued to affect recruitment, with fewer placements being made by recruiters, a new study suggests. Permanent staff appointments fell for the second month running in February, while growth in temporary jobs eased to a seven-month low, said the Recruitment & Employment Confederation and KPMG. Demand for staff was little-changed in February, having fallen at the start of the year, according to research among 400 recruiters. There was only a small increase in the availability of workers despite pandemic-related redundancies, while there was a greater reluctance to seek new jobs because of lingering uncertainty over job security. Starting salaries on offer fell, while wages for temporary jobs were stable, the survey indicated. The biggest increases in jobs were in nursing, medical and care, while hotel and catering saw the sharpest drop in permanent vacancies.
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The UK's Test & Trace app for Covid-19 made hardly any use of check-in data from people visiting restaurants, pubs, and hairdressers, Sky News reported. Sky News said it has obtained a confidential report admitting that because the service had not used this data for alerts and contact tracing, it had failed to warn "thousands of people" that they were at possible risk of infection "potentially leading to the spread of the virus". Moreover, Sky noted that in cases where Covid-19 data was used, public health officials in the UK had "encouraged pubs and restaurants to contact customers directly". This would have breached data protection law and may result in legal action against those businesses. According to the report, the lack of Test & Trace guidance for local public health teams on using the data resulted in businesses "being asked to, or volunteering, to contact customers and visitors", breaching the General Data Protection Regulation and putting them at risk of possible a possible "legal challenge".
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BROKER RATING CHANGES
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JPMORGAN RESUMES ASTON MARTIN WITH 'NEUTRAL' - TARGET 1200 PENCE
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BERENBERG RAISES GRAFTON GROUP PRICE TARGET TO 1180 (1050) PENCE - 'BUY'
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UBS RAISES BANK OF IRELAND PRICE TARGET TO 4.15 (3.45) EUR - 'BUY'
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COMPANIES - FTSE 250
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Frasers Group voiced its frustrations at the business rates relief announced in the UK government budget statement on Wednesday. The House of Fraser and Sports Direct owner said that the retail sector as a whole has "repeatedly asked for structural reform of business rates, none has been forthcoming". Frasers Group said it and many retailers would have expected "suitable relief" until structural reform is implemented. In the budget, the existing business rates holiday was extended for three months, until the end of June. Further, until April 2022, rates will be discounted by two thirds, up to a limit of GBP2 million per premises - with a lower cap for businesses that have been able to stay open. Frasers said "the rates cap on 'businesses' from July 2021 to March 2022, makes it a near worthless support package for large retailers". "For Frasers Group this cap will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created. It will also mean we need to review our entire portfolio to ascertain stores that are unviable due to unrealistic business rates," the company said. "Frasers Group believes that retailers should pay the fair amount of rates in line with realistic rateable values, but instead we continue to have an unwieldy, overly complex, and out of date business rates regime."
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Spirent Communications said it has acquired US-based automated wireless test solutions provider octoScope for USD55 million on a debt and cash free basis. Spirent said the deal was part of the targeted investment and M&A plans outlined at its Capital Markets Day in October and strengthens its position in Wi-Fi and 5G test markets. "This acquisition supports our strategy of sustainable, profitable growth by establishing Spirent as the firm market leader in the expanding Wi-Fi space, adding to our 5G solution portfolio. octoScope brings to us an impressive and well-known customer base, providing us with the opportunity to further leverage our established global routes to market and trusted relationships with our key accounts," said CEO Eric Updyke.
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Marks & Spencer Group is following other UK retailers in pulling back from banking businesses, the Telegraph reported. M&S Bank, a partnership with HSBC Holdings, will close all branches and current accounts, the newspaper said. The clothing, homewares and food retailer has told customers their accounts will close from this summer, and all 29 in-store branches will close at the same time. M&S had stopped offering new home loans last March. Its financial services now will focus on credit cards and store rewards, the Telegraph said, though its travel money desks in some 100 stores are not affected.
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COMPANIES - GLOBAL
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The EU is set to bring antitrust charges against Apple Inc for the first time, the Financial Times reported, citing people familiar with the case. The newspaper said the EU will act on a complaint brought two years ago by the music streaming site Spotify, which said Apple was taking a 30% cut of its subscription fees for featuring it in the App Store. Spotify also complained that Apple Music was able to undercut it on price because it did not have to pay the same 30% fee. More recently, Epic Games - the maker of Fortnite - had its hugely popular game thrown off Apple's App Store after it started directing players to its own payment system. Epic has also filed a competition complaint against Apple in the EU. On Thursday, the UK's Competition & Markets Authority announced an antitrust probe into whether Apple abuses its dominance on the App Store by imposing unfair terms on developers.
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China announced plans to boost supervision of the country's huge fintech sector and beef up its anti-monopoly drive, months after a crackdown on the sector that dealt a severe blow to e-commerce titan Alibaba and tycoon founder Jack Ma. Beijing has in recent months looked to rein in its booming financial technology companies to address a worrying debt mountain in the country, while also deflating the ambitions of high-flying business leaders thought to have stepped out of line with the Communist Party. On Friday, a draft plan for development from 2021-2025 said China would "steadily develop fintech" while stepping up in areas like risk assessment for applications of tech and financial innovation. Officials would also explore building a "correction and suspension mechanism" for innovative products.
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Friday's Shareholder Meetings
Argo Blockchain PLC - AGM
Avation PLC - GM re note maturity extension
Jupiter Emerging & Frontier Income Trust PLC - AGM
Mila Resources PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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