# London Stock Exchange Group PLC  Strategically well positioned to develop its growth opportunities

- Link: https://www.directorstalkinterviews.com/london-stock-exchange-group-plc-strategically-well-positioned-to-develop-its-growth-opportunities/412773486
- Published: 2019-05-01T07:21:24+01:00
- Author: Charlotte Edwards

**[London Stock Exchange Group PLC](https://www.directorstalkinterviews.com/ftse-company/london-stock-exchange-group/lseg.l)**(
LON:LSE) today released trading statement.

· Good overall Q1 income performance against challenging market backdrop

· Q1 total income up 5% year-on-year to £546 million

· Group continues to develop and invest for growth, with the acquisition of minority
stake in Euroclear and launch of new services in Post Trade and Information Services

**Q1 summary:**

· Information Services: revenues up 6% to £214 million – with 7% growth at FTSE 
Russell. Growth in index subscriptions remained strong while FTSE Russell asset-
based revenues reduced due to reduction in AuM at the end of 2018 (which impacted
on revenue in the first part of Q1 2019); asset-based revenue in Q2 is expected 
to be stronger

· Post Trade – LCH: income up 17% to £182 million, with 16% revenue growth in OTC
following record volumes at SwapClear and no discernible change to customers’ use
of the service as equivalence secured in event of hard Brexit; LCH benefited from
an updated SwapClear agreement with partner banks, with effect from the start of
the year, estimated to deliver c.£30 million savings to cost of sales in 2019

· Post Trade – Italy: income down 4% to £36 million as equity markets experienced
a slow first quarter; after adjusting for the treatment of T2S costs, gross profit
increased 3%

· Capital Markets: revenues down 9% to £97 million, mostly reflecting lower equity
trading volumes

· Technology Services: revenues up 9% to £14 million

> **David Schwimmer, London Stock Exchange Group CEO said:**
> “We continue to execute our strategy across our core businesses of Information
> Services, Post Trade and Capital Markets. In Post Trade, we acquired a stake in
> Euroclear, which shares our open access approach, and we updated our SwapClear
> agreement, which will deliver significant savings as we further develop the service.
> “We are investing in and growing our Information Services business, including 
> developing our multi-asset and data and analytics offering. While equity markets
> were slower due to macroeconomic uncertainty, we have seen an improved listing
> environment in Q2.
> “The Group is strategically well positioned to develop its growth opportunities
> further in the evolving macroeconomic landscape.”

New product development and investment in opportunities continued across the business:

– Group acquired a 4.9% stake in Euroclear with a seat on the Board, which will 
help strengthen the existing commercial relationships between the businesses

– LCH RepoClear members successfully consolidated European debt clearing activity
in LCH SA, benefitting from T2S efficiencies

– SwapClear Non-Deliverable IRS Clearing expanded to include 5 new LatAm and Asia-
Pacific currencies

– Dutch pension fund Pensioenfonds Detailhandel selected a custom FTSE Russell ESG
benchmark as the basis of a new €6bn developed market passive equity mandate managed
by BlackRock

– FTSE Russell launched a new Multi-Asset Composite Index Series – a wide range 
of indexes across major asset classes covering global, regional and emerging markets

– In early April, Network International, a Middle Eastern payments company, raised
£1.1 billlion on London Stock Exchange plc; and Nexi, a major Italian payments company
listed on Borsa Italiana, raising $2.6 billion, the largest IPO year to date globally

– Acquisition of minority stake in Nivaura, partnering with them to support capital
markets innovation through use of emerging technologies

**Financial Position**

The Group’s financial position remains strong and is broadly unchanged from that
reported for 31 December 2018. As at 31 March 2019, having funded the purchase of
a 4.9% stake in Euroclear, the Group had committed facility headroom of over £750
million available for general corporate purposes.

S&P maintains a positive outlook over its A- long term rating of LSEG, while Moody’s
rates LSEG A3 with a stable outlook.

The euro weakened by 2% and the US dollar strengthened by 6% against sterling compared
with the same period last year. To illustrate our exposure to movements in exchange
rates, a €0.05 change up or down in the average euro:sterling rate would have resulted
in a corresponding change to continuing operations total income of c.£7 million 
for Q1, while a US$0.05 move would have resulted in a c.£6 million change.

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