LSE sticks with final dividend after strong first quarter

(Sharecast News) - London Stock Exchange Group said it would pay its final dividend for 2019 as it reported higher first-quarter profit boosted by increased equity trading and clearing activity.


Gross profit for the three months to the end of March rose 13% to £555m as total income increased 13% to £615m.

The FTSE 100 company said based on its strong 2019 results and financial position it intended to pay its final dividend subject to approval at Tuesday's annual general meeting.

Quarterly performance was driven by a 12% increase in post-trade revenue to £192m and a 15% jump in capital markets revenue to £112m. Information services revenue, which includes FTSE Russell, rose 7% to £215m.

Many large companies have withdrawn or delayed their dividends to conserve cash during the coronavirus emergency. LSE proposed a final dividend of 49.9p a share with its results in February and plans to make the payout on 27 May as scheduled.

LSE said it had more than £600m of facility headroom at the end of March for general corporate purposes, giving it the access to cash it needs to operate its business during the crisis.

"Reflecting the strong 2019 results and ongoing financial strength, the group intends to pay its final dividend in relation to the 2019 financial year, subject to shareholder approval at today's AGM," LSE said. "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."

Markets were in a state of frenzy for much of the first quarter as panicked traders tried to respond to the spread of the Covid-19 virus which has put economies worldwide into virtual shutdown. LSE's first quarter showed the company benefiting from this increase in activity as revenue growth accelerated from 8% in 2019.