The London Stock Exchange Group (LSE: LSEG) has released its third-quarter trading update for the period ending September 30, 2023, revealing a commendable 8.0% increase in total income on a constant currency basis. The group’s performance has been bolstered by substantial growth across all divisions, notably with a 7.2% surge in its Data & Analytics sector.
LSE remains on a steadfast trajectory to achieve full-year growth in total income, positioning itself toward the upper end of the 6-8% guidance range. Analysts attribute this resilience to LSE’s revenue composition, with approximately three-quarters deriving from recurring sources. Charlie Huggins, the manager of the ‘Quality Shares Portfolio’ at Wealth Club, affirmed this perspective, stating, “The difficult economic backdrop doesn’t seem to be impacting LSE much. This is because around three-quarters of its revenue is recurring, and the products and services it provides tend to be mission-critical to customers. This makes the LSE a pretty resilient business, as these results highlight.”
Huggins also emphasised the pivotal role played by LSE’s strategic acquisition of Refinitiv, which significantly enhanced its data capabilities. He noted, “The Refinitiv deal transformed LSE’s data capabilities, creating a financial powerhouse to rival Bloomberg. So far, the integration seems to be progressing broadly to plan. LSE’s Data & Analytics business, much of which came from the Refinitiv merger, grew by 7.2% in the quarter, a solid performance.”
Amid the complexity of this multi-year merger, the market’s confidence in LSE’s Refinitiv deal is steadily growing. Huggins expressed, “Confidence in the Refinitiv deal is growing. While it is still too early for LSE to declare victory, given the complexity of this multi-year merger, every quarter of good delivery will help to quieten the sceptics.”
