London Stock Exchange plots up to £750m of share buybacks

London Stock Exchange Group expects to complete up to £750million of share buybacks by April 2024 after the firm upgraded its annual outlook.

The financial information provider and trading venue now anticipates full-year income growth on a constant currency basis will be towards the top end of its 6 to 8 per cent guidance range, following a solid first-half performance.

Total revenue excluding recoveries, such as fees for third-party content, increased by 7.9 per cent to just under £4billion for the six months ending June, with growth accelerating in the second quarter.

David Schwimmer, LSE Group’s chief executive, said the group’s data and analytics division, which offers real-time data and news, expanded ‘faster than it has for many years’.

He added that the ‘post trade’ segment, home to clearing house LCH, achieved ‘outstanding [income] growth’ of 19.2 per cent while the capital markets business did well ‘despite a very strong prior period’.

While the company’s operating profits did slump by 18.7 per cent to £729million, it bought back £400million of its own shares and plans another £750million of share repurchases by April next year.

Schwimmer said LSE’s ‘resilient business model and the quality of our earnings, diversified by customer, geography, product and asset class, position us well for further growth in the second half and beyond’.

The FTSE 100 firm formed a decade-long strategic partnership with Microsoft last December when a consortium of investors including Blackstone and Thomson Reuters sold a 4 per cent stake to the American software giant.

As part of the deal, LSE’s data handling and cloud services will be migrated to Microsoft Azure, while the Workspace platform will be integrated with applications like Teams and Microsoft 365 software. 

‘We are progressing well with the implementation phase of our transformational strategic partnership with Microsoft, with customers beginning to see the benefits from next year,’ Schwimmer said.

The publication of the LSE Group’s results comes amid questions about London’s future as a premier global financial centre.

Firms are increasingly deciding to float or move their primary listing to Wall Street, where they can gain higher valuations and access a deeper pool of investors.

Drugmaker Okyo Pharma and plumbing products seller Ferguson are among those who have made the transatlantic switch while building materials supplier CRH is due to transfer its primary listing next month.

Softbank also chose New York rather than London for the upcoming listing of semiconductor developer Arm Holdings despite considerable lobbying from the UK Government.

London Stock Exchange Group shares were 1.5 per cent, or 128p, lower at £81.58 on early Thursday afternoon, although they have still risen by around 14 per cent so far this year.