TIDMLSE

RNS Number : 4237E

London Stock Exchange Group PLC

28 February 2020

28 February 2020

LONDON STOCK EXCHANGE GROUP PLC

PRELIMINARY RESULTS FOR THE YEARED 31 DECEMBER 2019

Unless stated otherwise, all figures in the highlights below refer to 12 months to 31 December 2019 and comparisons with the prior 12 month period on the same basis.

-- Strong financial performance - revenue growth continues across our businesses as the Group continues to invest successfully for growth

-- Acquisition of Refinitiv will accelerate the Group's growth strategy and position as a global financial markets infrastructure leader - increasing its global footprint and adding leading data and analytics and multi-asset class capital markets capabilities

-- Detailed integration planning underway to ensure delivery of Refinitiv transaction benefits; regulatory approvals processes ongoing and on track for completion in H2 2020

2019 Financial Highlights

-- Total revenue and total income both up 8% to GBP2,056 million (2018: GBP1,911 million) and GBP2,314 million (2018: GBP2,135 million) respectively

   --    FTSE Russell delivered 10% revenue growth (up 6% on a constant currency basis) 

-- LCH OTC revenues up 15% (up 13% on a constant currency basis) driven by record SwapClear volumes with over $1.2 quadrillion of notional cleared

-- Cost of sales decreased 8%, in part driven by an updated SwapClear agreement with partner banks delivering a more than GBP30 million reduction in the year

-- Continued cost discipline, operating expenses (excluding depreciation and amortisation)(1) up only 1%, helped by achievement of cost savings; total costs up 7% reflecting higher depreciation and amortisation mainly arising from increased capital investment

-- Adjusted operating profit(2) up 14% to GBP1,065 million (2018: GBP931 million); operating profit down 2% to GBP738 million (2018: GBP751 million); adjusted EBITDA(2) up 19% to GBP1,265 million (2018: GBP1,066 million) and EBITDA margin of 54.7%

-- Adjusted EPS(2) up 15% to 200.3 pence (2018: 173.8 pence); basic EPS down 14% to 119.5 pence (2018: 138.3 pence)

-- Proposed final dividend of 49.9 pence per share, resulting in a 16% increase in the full year dividend to 70.0 pence per share, reflecting good performance and confident outlook for the Group

Continued organic and inorganic development, including:

-- Acquisition of Beyond Ratings, a provider of Environmental, Social and Governance (ESG) data for fixed income investors

-- FTSE Russell launched Climate WGBI, an innovative government bond index incorporating climate risk factors

-- Record volumes reported by all LCH OTC clearing services - SwapClear, CDSClear, ForexClear and RepoClear

-- LCH continues to facilitate migration to alternative reference rates and was the first CCP to launch clearing for EURSTR swaps

   --    ForexClear launched the clearing of deliverable FX Forwards 

-- Acquisition of a 4.92% minority stake in Euroclear with a seat on the Board, strengthening the commercial relationship between the businesses

-- Capital Markets launched Shanghai-London Stock Connect with Huatai Securities as its first issuer

-- Capital Markets launched the Green Economy Mark, enabling investors to identify issuers that generate 50% or more of their revenues from green initiatives; and the Sustainable Bond Market, a new dedicated segment for social and sustainability bonds

(1) Before depreciation, amortisation and non-underlying items.

(2) Before amortisation of purchased intangible assets and non-underlying items.

Organic growth is calculated in respect of businesses owned for at least 12 months in either period and so excludes Beyond Ratings. The Group's principal foreign exchange exposure arises from translating and revaluing its foreign currency earnings, assets and liabilities into LSEG's reporting currency of Sterling.

Commenting on performance for the year, David Schwimmer, CEO, LSEG said:

"It was another strong year for London Stock Exchange Group - delivering a good financial performance, making meaningful progress executing on our strategic objectives, and taking significant steps on a number of Group-wide initiatives. The Group continued to perform well, navigating an evolving macroeconomic and geopolitical landscape and remains well positioned for the future. We continue to partner with our customers to develop innovative services in a range of areas, from reference rate reform to sustainable investment.

"Our proposed acquisition of Refinitiv, a leading provider of data, analytics and financial markets services, will significantly accelerate our strategy to be a leading global financial markets infrastructure provider. Refinitiv brings highly complementary capabilities in data, analytics and capital markets as well as deep customer relationships across a global business. Detailed integration planning is underway to ensure we are ready to deliver the benefits of the transaction to our shareholders, customers and other stakeholders. We remain on track to close the transaction in the second half of this year."

Financial Summary

Unless otherwise stated, all figures below refer to continuing operations for the year ended 31 December 2019. Comparative figures are for continuing operations for the year ended 31 December 2018. Variance is also provided on an organic and constant currency basis.

 
                                                                              Organic 
                                                                                  and 
                                                Twelve months ended          constant 
                                                    31 December              currency 
                                            --------------------------- 
                                                2019    2018   Variance   Variance(1) 
 Continuing operations                          GBPm    GBPm          %             % 
-----------------------------------------   --------  ------  ---------  ------------ 
 
 Revenue 
 Information Services(1)                         902     841         7%            5% 
 Post Trade Services - LCH                       550     487        13%           13% 
 Post Trade Services - CC&G and 
  Monte Titoli                                   103     102         1%            2% 
 Capital Markets                                 426     407         5%            5% 
 Technology                                       66      65         2%            1% 
 Other revenue                                     9       9          -             - 
------------------------------------------  --------  ------  ---------  ------------ 
 Total revenue                                 2,056   1,911         8%            6% 
 
 Net treasury income through CCP 
  businesses                                     255     218        17%           16% 
 Other income                                      3       6          -             - 
------------------------------------------  --------  ------  ---------  ------------ 
 Total income                                  2,314   2,135         8%            7% 
 Cost of sales                                 (210)   (227)       (8%)          (8%) 
------------------------------------------  --------  ------  ---------  ------------ 
 Gross profit                                  2,104   1,908        10%            9% 
------------------------------------------  --------  ------  ---------  ------------ 
 
 Operating expenses before depreciation, 
  amortisation and impairment                  (839)   (834)         1%          (1%) 
 Underlying depreciation, amortisation 
  and impairment                               (200)   (135)        49%           49% 
------------------------------------------  --------  ------  ---------  ------------ 
 Total operating expenses                    (1,039)   (969)         7%            6% 
 Income from equity investments                    7       -          -             - 
 Share of loss after tax of associate            (7)     (8)      (12%)         (12%) 
 Adjusted operating profit(2)                  1,065     931        14%           13% 
------------------------------------------  --------  ------  ---------  ------------ 
 
 Add back underlying depreciation, 
  amortisation and impairment                    200     135        49%           49% 
                                                                         ------------ 
 Adjusted earnings before interest, 
  tax, depreciation, amortisation 
  and impairment(2)                            1,265   1,066        19%           17% 
                                            --------  ------  ---------  ------------ 
 
 Amortisation of purchased intangible 
  assets and non-underlying items              (327)   (180)        81%           78% 
 Operating profit                                738     751       (2)%          (3%) 
------------------------------------------  --------  ------  ---------  ------------ 
 
 
 
 Earnings per share 
 Basic earnings per share (p)          119.5   138.3   (14%) 
 Adjusted basic earnings per share 
  (p) (2)                              200.3   173.8     15% 
 
 Dividend per share (p)                 70.0    60.4     16% 
 

The Group's principal foreign exchange exposure arises from translating and revaluing its foreign currency earnings, assets and liabilities into LSEG's reporting currency of Sterling.

(1) Organic growth is calculated in respect of businesses owned for at least 12 months in either period and so excludes Beyond Ratings.

(2) Before amortisation of purchased intangible assets and non-underlying items.

Variances in table are calculated from unrounded numbers.

Board of Directors - change of Senior Independent Director

Stephen O'Connor will assume the role of Senior Independent Director from Paul Heiden after the conclusion of the AGM in April 2020, when, as previously announced, Paul will step down from the Board. Stephen was appointed to the LSEG Board in June 2013 and is Chairman of the Risk Committee.

 
 Contacts: 
 
  London Stock Exchange Group plc 
 Gavin Sullivan/Lucie Holloway    Media                  +44 (0) 20 7797 1222 
  Paul Froud                       Investor Relations     +44 (0) 20 7797 3322 
 
 

Further information

The Group will host a presentation and conference call on its Preliminary Results for analysts and institutional shareholders today at 09:00am (GMT). On the call will be David Schwimmer (CEO), David Warren (CFO) and Paul Froud (Group Head of Investor Relations).

To access the telephone conference call please pre-register using the following link and instructions below: http://emea.directeventreg.com/registration/1384568

-- Please register in advance using the link above. Upon registering with your full name, company name and email address, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID

-- In the 10 minutes prior to the call start time, you will need to use the conference access information provided in the email received at the point of registering

Note: Due to regional restrictions some participants may require operator assistance when joining this conference call and will not be automatically connected.

Presentation slides can be viewed at http://www.lseg.com/investor-relations

For further information, please call the Group's Investor Relations team on +44 (0)20 7797 3322.

The information in the preliminary announcement of the results for the year ended 31 December 2019, which was approved by the Board of Directors on 28 February 2020, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006. The financial statements for the year ended 31 December 2018 were filed with the Registrar of Companies, and the audit report was unqualified and contained no statements in respect of Sections 498 (2) and 498 (3) of the UK Companies Act 2006. The financial statements for the year ended 31 December 2019 will be filed with the Registrar of Companies in due course.

In accordance with the Listing Rules of the UK Listing Authority, these preliminary results have been agreed with the Company's auditors, Ernst &Young LLP, and the Directors have not been made aware of any likely modification to the auditor's report to be included in the Group's Annual Report and Accounts for the year ended 31 December 2019.

The preliminary results have been prepared on a basis consistent with the accounting policies set out in the Group's Annual Report and Accounts for the year ended 31 December 2019.

CEO's statement

Overview

2019 was another eventful year of macroeconomic and geo-political events directly influencing global financial markets. Despite this complex backdrop, it was also another strong year for London Stock Exchange Group - delivering a strong financial performance; making meaningful progress executing on our strategic objectives; and taking significant steps on a number of Group-wide initiatives. We announced the proposed acquisition of Refinitiv, which will accelerate our strategy, while continuing to progress financially, strategically and operationally across our core businesses of Information Services, Post Trade and Capital Markets. Our successful strategy is underpinned by the continuation of our Open Access and customer partnership approach to deliver innovative solutions across the financial markets value chain.

At the end of 2018, the Board and the executive team evaluated the Group's strategy in order to ensure that LSEG is well positioned for the decade ahead. We carried out this evaluation from a position of strength, building on the successful execution of the strategy and financial performance of recent years. Over the last 20 years, the financial market landscape has changed significantly - driven by technology, regulatory and macroeconomic factors - and change is happening at an even greater pace today. We are consistently hearing from our clients that they want to trade across different regions and asset classes, with fewer providers that are better positioned to do more for them across the financial markets value chain, while maintaining an open access model built on customer choice.

LSEG is looking to drive that evolution and position the Group for long-term sustainable growth. In August 2019 we announced the transformational acquisition of Refinitiv in an all-share transaction for an enterprise value of approximately US$27 billion, as at 1 August 2019. The proposed acquisition, which has been well received by the market and approved by shareholders, significantly accelerates our existing strategy to be a leading global financial markets infrastructure provider. Refinitiv brings highly complementary capabilities in data, analytics and capital markets as well as deep customer relationships across a truly global business. As a result, we will significantly expand our data and analytics offering to create a global multi-asset class capital markets business. Shortly after the announcement of the proposed Refinitiv transaction, we received an unsolicited approach from Hong Kong Exchanges and Clearing Limited (HKEX). The Board reflected fully on the conditional proposal and highlighted fundamental concerns about the deliverability, value and strategic benefit of the approach. HKEX later announced that it would not proceed with an offer. The Board remains convinced that the Refinitiv transaction provides superior benefits, and we continue to make good progress towards achieving regulatory approvals. We remain on target to close the transaction in the second half of 2020.

Information Services

In our Information Services division, FTSE Russell is a key contributor to Group revenues, delivering 10% revenue growth over the course of the year. This included strong growth in subscription revenues, up 12% in 2019, reflecting new sales across a number of indices.

The growth in passive investing continues and is now increasing at approximately 20% per year, with assets expected to reach $30 trillion by 2023. FTSE Russell is well placed to capitalise on these industry trends, with increased demand for its data and analytical tools. At the end of 2019, the value of ETF assets tracking its indices was US$765 billion, up 26% on the previous year.

LSEG's Information Services business is also responding to the rapidly growing demand among asset owners to integrate sustainability and Environmental, Social and Governance (ESG) considerations. In June, we announced the acquisition of Beyond Ratings, a highly regarded provider of ESG data for fixed income. Beyond Ratings is very complementary to FTSE Russell's existing ESG index and data offering as well as the analytics tools provided through The Yield Book.

In July, FTSE Russell launched the first climate risk-adjusted government bond index, which allows the market to access a quantitative climate risk assessment for sovereign debt. FTSE Russell has worked with institutions across the globe to develop indices that meet their sustainability criteria as well as the underlying benchmarks for exchange traded funds. FTSE Russell will continue to help develop and promote more global standards for measuring progress against ESG and sustainable development goals.

FTSE Russell successfully began inclusion of China A Shares and Saudi Arabia securities into its global equity benchmarks, marking significant developments for these emerging markets. We have received positive feedback from index users with many passive asset managers moving quickly to adjust portfolios. We estimate that the inclusion of these countries within the FTSE Emerging Index will equate to around US$15 billion in net passive inflows of assets under management.

Post Trade

The Group's post trade divisions continued to perform well. LCH delivered a strong performance with income up 14% to GBP756 million. Post Trade - Italy saw income increase by 5% to GBP152 million. In January 2019, LSEG also announced the purchase of a 4.92% minority stake in Euroclear, a leading provider of settlement, custody and collateral management services across Europe, which further strengthened LSEG's and Euroclear's existing operational and commercial relationship to the benefit of our respective customers.

LCH's OTC clearing services continued to set new records in 2019 and have seen good growth in member and client clearing. SwapClear remains the largest OTC rates liquidity pool in the world, processing over US$1.2 quadrillion in notional volume in 2019. Alongside this, the increased use of its compression services has enabled members and customers to save approximately US$35.1 billion in capital over the course of the year. In October, LCH became the first clearing house to offer clearing of Euro-denominated swaps benchmarked to the new reference rate EURSTR, as the industry adopts new interest rate benchmarks. The move follows its launch of clearing for SOFR swaps and SONIA Futures in 2018, and SARON swaps in 2017. Through SwapAgent, LCH has the opportunity to expand its offering in the non-cleared OTC derivatives space, which represents around 25% of the global OTC interest rate derivatives market. ForexClear has also expanded its product offering to include the clearing of deliverable FX forwards. In Italy, the Group's central securities depository (CSD), Monte Titoli, is implementing a digital transformation programme to deliver increased efficiency, risk reduction and simplification for clients.

In October, we announced that we would align our Post Trade businesses in one division from January 2020, under the leadership of Daniel Maguire. The new Post Trade division includes LCH Group, CC&G, Monte Titoli and UnaVista, our trade reporting business that previously sat within Information Services. The new division will ensure greater Group-wide collaboration and benefits for customers, while continuing to operate on an open-access basis with no changes to local legal entity governance and regulatory oversight.

The withdrawal agreement in relation to the UK's departure from the European Union provides for a transition period until 31 December 2020 during which the UK will continue to apply European Union Law. As such, LCH Ltd remains an EMIR 'Authorised' UK CCP and continues to offer clearing for all products and services to all members and clients. LCH Ltd also continues to engage in the application process under the revised supervisory framework for EU and third country CCPs ('EMIR 2.2') to ensure a smooth transition to being a recognised, third country CCP.

Capital Markets

Capital Markets continued to perform well despite macroeconomic headwinds with revenue up 5% to GBP426 million.

While IPO activity globally has been slower this year due to macroeconomic and political uncertainty, London Stock Exchange and Borsa Italiana attracted significant listings with a total of GBP23.4 billion raised by firms in new and further issues across the Group's markets. London Stock Exchange retained its status as the leading European exchange in terms of money raised and Borsa Italiana recorded the highest number of new listings in Europe.

AIM, which will celebrate its 25th anniversary in 2020, remains the world's largest growth market, helping firms to raise over GBP3.8 billion in new and further issues during 2019. As part of our ongoing commitment to broadening our services to help make markets more accessible, London Stock Exchange also signed an agreement with PrimaryBid to enable retail investors real time access to listings. AIM Italia welcomed 31 companies to its markets, the highest number since it launched in 2009. In fixed income, a number of companies and sovereign issuers chose London to raise capital, including Aramco's inaugural international $12 billion bond in April.

After four years of development, including close work with the UK and Chinese Governments and regulators, we launched Shanghai-London Stock Connect, welcoming Huatai Securities as the first issuer of GDRs on the new segment in June. While we expect it will take a while to build, it is a significant achievement in our relationship with China.

LSEG continued to support issuers and investors in the transition to a sustainable, low-carbon economy throughout 2019. Over a third of the GBP6.9 billion total capital raised by investment funds through IPOs and further issues this year has been raised by green funds. Borsa Italiana's third Italian Sustainability Day welcomed a record number of participants amidst the growing focus on sustainable investment. In October, London Stock Exchange launched two green initiatives to recognise the increased interest from issuers and investors. The new Green Economy Mark recognises listed companies with 50% or more of their revenues derived from products and services that contribute to the global green economy. The Sustainable Bond Market builds on the success of the Green Bond Segment, launched in 2015, and includes new sustainability, social and issuer-level segments, based on independently verified frameworks and use of proceeds.

CurveGlobal, the interest rate derivatives business, continued to innovate and build momentum. CurveGlobal trading volumes rose by 78% in 2019, compared to 2018, as it continues to drive competition in the futures markets. CurveGlobal is supporting the transition away from LIBOR-based derivatives, enhancing price discovery and helping the market manage risk. It has also introduced a unique uncapped pre-paid trading scheme to encourage further use of CurveGlobal services.

Leadership

During the course of the year, we announced some changes to strengthen further our executive management team. David Shalders joined the Group as Chief Integration Officer and Chief Operating Officer and Anthony McCarthy was appointed Chief Information Officer, following Chris Corrado's decision to leave the Group. As noted in last year's report, Waqas Samad was appointed Group Director, Information Services in January 2019, while Daniel Maguire, CEO LCH Group was appointed Group Director, Post Trade following the creation of a single Post Trade division. Tim Jones, Group Head of Human Resources, and Gavin Sullivan, Group Communications Director, both joined the executive management team from 1 January 2020, reflecting the importance of these roles as the Group continues to develop. From 1 April 2020, Murray Roos will join LSEG as Group Director, Capital Markets as Raffaele Jerusalmi steps down from that role, while continuing as CEO, Borsa Italiana.

Finally, in October we announced that David Warren, Group Chief Financial Officer had informed the Group of his intention to retire from the company. David will continue in his current role as Group CFO and a member of the Board through to the close of the Refinitiv transaction to ensure a smooth transition to his successor. However, I would like to express my thanks now for David's significant contribution to the Group's success.

Our purpose

LSEG supports global financial stability and sustainable economic growth by enabling businesses and economies to fund innovation, manage risk and create jobs. As a global financial markets infrastructure business, LSEG provides critical services to clients around the world. We understand the vital role we play in supporting and enabling a financial ecosystem that fosters long-term sustainable economic growth, for the benefit of all participants in capital markets - issuers, investors and intermediaries. We run businesses that are of systemic importance and recognise that in doing so we hold an important position in the financial ecosystem with a broad set of responsibilities to our stakeholders.

We are also cognisant of our responsibilities to our people and to the wider communities in which we operate. We are committed to supporting a culture of collaboration and embracing the diversity of the Group. In 2019, we launched our Inclusion Network (IN) which will support networks embracing all forms of diversity. Colleagues in all locations have actively supported cultural initiatives from mentoring to organising activities that promote our values. It is also encouraging to see a rise in the number of colleagues participating in our paid volunteering days initiative to support various local charities around the world. You can read more in our separate Corporate Sustainability report available on our website.

Looking forward

We keep a close eye on the broader macroeconomic, technology and regulatory factors which continue to drive change in our industry. We have continued to invest across our businesses, working in partnership with customers to deliver innovative products and services, while also controlling costs. The Group remains well positioned for future growth in this evolving environment as a global financial markets infrastructure leader.

Finally, I would like to take the opportunity to thank all colleagues across the Group for their hard work in delivering another successful performance.

Financial review

The financial review covers the financial year ended 31 December 2019.

Commentary on performance uses variances on a continuing organic and constant currency basis, unless otherwise stated. Constant currency is calculated by rebasing 2018 at 2019 foreign exchange rates. Sub-segmentation of revenues are unaudited and are shown to assist the understanding of performance.

Highlights

-- Total income of GBP2,314 million (2018: GBP2,135 million) increased by 7% and total revenue of GBP2,056 million (2018: GBP1,911 million) increased by 6%

   --    Adjusted EBITDA (1) of GBP1,265 million (2018: GBP1,066 million) increased by 17% 
   --    Adjusted operating profit (1) of GBP1,065 million (2018: GBP931 million) increased by 13% 
   --    Operating profit of GBP738 million (2018: GBP751 million) decreased by 3% 
   --    Adjusted basic earnings per share (1) of 200.3 pence (2018: 173.8 pence) increased by 15% 
   --    Basic earnings per share of 119.5 pence (2018: 138.3 pence) decreased by 14% 
   --    Total dividend per share of 70.0 pence (2018: 60.4 pence) increased by 16% 

There were no discontinued operations in 2019.

David Warren

Group Chief Financial Officer

(1) London Stock Exchange Group uses non-GAAP performance measures as key financial indicators as the Board believes these better reflect the underlying performance of the business. As in previous years, adjusted operating expenses, adjusted EBITDA, adjusted operating profit and adjusted earnings per share all exclude amortisation and impairment of purchased intangible assets and goodwill and non-underlying items

 
Continuing Operations   12 months ended  12 months ended  Variance  Variance at organic and constant currency(2) 
                               Dec 2019         Dec 2018         %                                             % 
                                   GBPm             GBPm 
 Revenue 
======================  ===============  ===============  ========  ============================================ 
Information Services                902              841         7                                             5 
Post Trade Services - 
 LCH                                550              487        13                                            13 
Post Trade Services - 
 CC&G and Monte Titoli              103              102         1                                             2 
Capital Markets                     426              407         5                                             5 
Technology Services                  66               65         2                                             1 
Other                                 9                9         -                                             - 
======================  ===============  ===============  ========  ============================================ 
Total revenue                     2,056            1,911         8                                             6 
Net treasury income 
 from CCP clearing 
 business                           255              218        17                                            16 
Other income                          3                6         -                                             - 
----------------------  ---------------  ---------------  --------  -------------------------------------------- 
Total income                      2,314            2,135         8                                             7 
======================  ===============  ===============  ========  ============================================ 
Cost of sales                     (210)            (227)       (8)                                           (8) 
======================  ===============  ===============  ========  ============================================ 
Gross profit                      2,104            1,908        10                                             9 
----------------------  ---------------  ---------------  --------  -------------------------------------------- 
Operating expenses 
 before depreciation, 
 amortisation and 
 impairment(1)                    (839)            (834)         1                                           (1) 
Income from equity 
Investments                           7                -         -                                             - 
Share of loss after 
 tax of associates                  (7)              (8)      (12)                                          (12) 
----------------------  ---------------  ---------------  --------  -------------------------------------------- 
Adjusted earnings 
 before interest, tax, 
 depreciation, 
 amortisation and 
 impairment(1)                    1,265            1,066        19                                            17 
======================  ===============  ===============  ========  ============================================ 
Depreciation, 
 amortisation and 
 impairment (1)                   (200)            (135)        49                                            49 
======================  ===============  ===============  ========  ============================================ 
Adjusted operating 
 profit (1)                       1,065              931        14                                            13 
======================  ===============  ===============  ========  ============================================ 
Amortisation of 
 purchased intangible 
 assets and 
 non-underlying items             (327)            (180)        81                                            78 
======================  ===============  ===============  ========  ============================================ 
Operating profit                    738              751       (2)                                           (3) 
======================  ===============  ===============  ========  ============================================ 
 Adjusted basic 
  earnings per share 
  (1)                            200.3p           173.8p        15 
======================  ===============  ===============  ========  ============================================ 
Basic earnings per 
 share                           119.5p           138.3p      (14) 
======================  ===============  ===============  ========  ============================================ 
 
 

(1) Before amortisation of purchased intangible assets and non-underlying items

(2) Organic growth is calculated in respect of businesses owned for at least 12 months in either period and excludes Beyond Ratings

Note: Variances in all tables are calculated from unrounded numbers

Information Services

 
                                           12 months ended Dec  12 months ended Dec            Variance at organic and 
                                                          2019                 2018  Variance     constant currency(1) 
                 Revenue                                  GBPm                 GBPm         %                        % 
=========================================  ===================  ===================  ========  ======================= 
Index - Subscription                                       418                  373        12                        8 
Index - Asset Based                                        231                  219         6                        2 
-----------------------------------------  -------------------  -------------------  --------  ----------------------- 
FTSE Russell(2)                                            649                  592        10                        6 
Real Time Data                                              97                   94         3                        3 
Other Information Services(1,2)                            156                  155         1                      (1) 
=========================================  ===================  ===================  ========  ======================= 
Total revenue                                              902                  841         7                        5 
=========================================  ===================  ===================  ========  ======================= 
Cost of sales                                             (74)                 (70)         5                        2 
=========================================  ===================  ===================  ========  ======================= 
Gross profit                                               828                  771         7                        5 
=========================================  ===================  ===================  ========  ======================= 
Operating expenses before depreciation, 
 amortisation and impairment(3)                          (323)                (302)         7                        - 
=========================================  ===================  ===================  ========  ======================= 
Earnings before interest, tax, 
 depreciation, amortisation and 
 impairment(3)                                             505                  469         7                        - 
=========================================  ===================  ===================  ========  ======================= 
Depreciation, amortisation and 
 impairment(3)                                            (56)                 (29)        93                        - 
=========================================  ===================  ===================  ========  ======================= 
Operating profit(3)                                        449                  440         2                        - 
-----------------------------------------  -------------------  -------------------  --------  ----------------------- 
 

(1) Organic growth is calculated in respect of businesses owned for at least 12 months in either period and so excludes Beyond Ratings

(2) Mergent and some other minor items (previously reported in FTSE Russell subscriptions) are now included in Other Information Services for both periods

(3) Operating expenses before depreciation, amortisation and impairment; earnings before interest, tax, depreciation, amortisation and impairment; depreciation, amortisation and impairment; and operating profit variance percentage is shown on a reported basis only i.e. not on a constant currency basis. Variances will include underlying movements and foreign exchange effects

Information Services provides global index products, real time pricing data, product identification, reporting and reconciliation services. Revenue was GBP902 million (2018: GBP841 million).

FTSE Russell's revenue was GBP649 million (2018: GBP592 million). On a reported basis, revenue increased by 10% and growth on a constant currency basis was 6% driven by strong subscription renewal rates and data sales, as well as increases in average AUM levels in benchmarked ETFs and other investable products.

Real Time Data revenue increased by 3% to GBP97 million (2018: GBP94 million) driven by increased licence sales, partially offset by the revenue impact of a 4% decline in the number of terminals to 167,000 (2018: 174,000).

Other Information Services revenue is broadly in line with last year at GBP156 million (2018: GBP155 million), with recurring licence growth in data products offset by a decline in transactional revenues in UnaVista.

Cost of sales increased by 2% to GBP74 million (2018: GBP70 million), primarily as a result of increased data charges and partnership costs, in relation to growth in FTSE Russell revenue.

Reported operating expenses excluding depreciation, amortisation and impairment (D&A) increased by 7% to GBP323 million (2018: GBP302 million), and D&A rose 93% to GBP56 million (2018: GBP29 million) reflecting continued investment to support growth of the business and share of IFRS 16 right of use asset amortisation. The increase in total cost contributed to a marginal operating profit margin decline.

Reported operating profit increased by 2% to GBP449 million (2018: GBP440 million). The Group remains on track to achieve the financial performance announced as part of the Yield Book acquisition.

Post Trade Services - LCH

 
                                                12 months ended Dec  12 months ended Dec                   Variance at 
                                                               2019                 2018  Variance   constant currency 
                    Revenue                                    GBPm                 GBPm         %                   % 
==============================================  ===================  ===================  ========  ================== 
OTC                                                             307                  268        15                  13 
Non-OTC                                                         140                  136         3                   4 
Other                                                           103                   83        25                  24 
==============================================  ===================  ===================  ========  ================== 
Total revenue                                                   550                  487        13                  13 
==============================================  ===================  ===================  ========  ================== 
Net treasury income                                             206                  175        18                  17 
Total income                                                    756                  662        14                  14 
==============================================  ===================  ===================  ========  ================== 
Cost of sales                                                 (114)                (123)       (8)                 (7) 
==============================================  ===================  ===================  ========  ================== 
Gross profit                                                    642                  539        19                  18 
==============================================  ===================  ===================  ========  ================== 
Income from equity investments                                    7                    -         -                   - 
==============================================  ===================  ===================  ========  ================== 
Operating expenses before depreciation, 
 amortisation and impairment (1)                              (234)                (235)         -                   - 
==============================================  ===================  ===================  ========  ================== 
Earnings before interest, tax, depreciation, 
 amortisation and impairment(1)                                 415                  304        36                   - 
==============================================  ===================  ===================  ========  ================== 
Depreciation, amortisation and impairment(1)                   (76)                 (62)        23                   - 
==============================================  ===================  ===================  ========  ================== 
Operating profit (1)                                            339                  242        40                   - 
----------------------------------------------  -------------------  -------------------  --------  ------------------ 
 

(1) Operating expenses before depreciation, amortisation and impairment; earnings before interest, tax, depreciation, amortisation and impairment; depreciation, amortisation and impairment; and operating profit variance percentage is shown on a reported basis only i.e. not on a constant currency basis. Variances will include underlying movements and foreign exchange effects

Post Trade Services - LCH comprises the Group's majority owned global clearing business. Total income was GBP756 million (2018: GBP662 million).

2019 performance is in line with the Group's double-digit growth revenue target for OTC clearing. OTC clearing revenue increased by 13% to GBP307 million (2018: GBP268 million), driven by SwapClear, with strong growth in client clearing where client trade volume increased by 13% to 1,681,000 (2018: 1,487,000). ForexClear membership increased to 34 members (2018: 32) while notional value cleared grew by 5% to US$18.0 trillion (2018: US$17.2 trillion). Of this, $61 billion was client cleared notional, up significantly from the previous year (2018: $8 billion).

Non-OTC clearing revenue increased by 4% to GBP140 million (2018: GBP136 million), reflecting continued strong performance in RepoClear. RepoClear reached a record nominal value cleared of EUR106 trillion (2018: EUR98.7 trillion) up 7% largely as a result of strong growth in the underlying Repo market, particularly in Europe as a result of excess liquidity with members realising netting and other benefits from the newly consolidated Euro debt pool in LCH SA.

Other revenue, which includes fees from non-cash collateral management, compression services, recharged pass through costs and revenue sharing arrangements, increased by 24% to GBP103 million (2018: GBP83 million).

Net treasury income increased by 17% to GBP206 million (2018: GBP175 million). The growth reflects a 13% rise in average cash collateral held to EUR98.4 billion (2018: EUR86.7 billion), primarily driven by volumes cleared and market volatility. Increased capacity with investment counterparties as well as continued expansion of the range of products invested in for asset allocation optimisation continued to support NTI growth. The Group expects NTI to stabilise around the levels seen in H2 2019 if collateral levels remain unchanged.

Cost of sales decreased 7% to GBP114 million (2018: GBP123 million), reflecting the updated SwapClear agreement which came into effect at the start of the year, which exceeded the GBP30 million benefit previously communicated.

Reported operating expenses excluding D&A remained flat and D&A increased by 23% to GBP76 million (2018: GBP62 million), driven by investment to support growth and IFRS 16 right of use asset amortisation.

LCH EBITDA margin increased by nine percentage points to 55% (2018: 46%), significantly exceeding the target of approaching 50% by 2019.

Reported operating profit increased by 40% to GBP339 million (2018: GBP242 million).

Post Trade Services - CC&G and Monte Titoli

 
                                                                                                           Variance at 
                                      12 months ended Dec 2019  12 months ended Dec 2018  Variance   constant currency 
               Revenue                                    GBPm                      GBPm         %                   % 
====================================  ========================  ========================  ========  ================== 
Clearing (CC&G)                                             43                        41         3                   4 
Settlement, Custody and Other (MT)                          60                        61         -                   1 
------------------------------------  ------------------------  ------------------------  --------  ------------------ 
Inter-segmental revenue                                      -                         1         -                   - 
====================================  ========================  ========================  ========  ================== 
Total revenue                                              103                       103         1                   2 
====================================  ========================  ========================  ========  ================== 
Net treasury income (CC&G)                                  49                        43        14                  15 
====================================  ========================  ========================  ========  ================== 
Total income                                               152                       146         5                   6 
====================================  ========================  ========================  ========  ================== 
Cost of sales                                              (7)                       (7)         6                   6 
====================================  ========================  ========================  ========  ================== 
Gross profit                                               145                       139         5                   6 
====================================  ========================  ========================  ========  ================== 
Operating expenses before 
 depreciation, amortisation and 
 impairment(1)                                            (44)                      (47)       (6)                   - 
====================================  ========================  ========================  ========  ================== 
Earnings before interest, tax, 
 depreciation, amortisation and 
 impairment(1)                                             101                        92        10                   - 
====================================  ========================  ========================  ========  ================== 
Depreciation, amortisation and 
 impairment(1)                                             (9)                       (9)         -                   - 
====================================  ========================  ========================  ========  ================== 
Operating profit (1)                                        92                        83        11                   - 
------------------------------------  ------------------------  ------------------------  --------  ------------------ 
 

(1) Operating expenses before depreciation, amortisation and impairment; earnings before interest, tax, depreciation, amortisation and impairment; depreciation, amortisation and impairment; and operating profit variance percentage is shown on a reported basis only i.e. not on a constant currency basis. Variances will include underlying movements and foreign exchange effects

Post Trade Services provides clearing (CC&G), settlement and custody activities (both Monte Titoli). Total income was GBP152 million (2018: GBP146 million).

CC&G clearing revenues increased by 4% to GBP43 million (2018: GBP41 million) mainly due to growth in bonds clearing volumes, mirroring trading performance on MTS Repo market, jointly with higher guarantee deposit fees and fails commissions. Underlying Monte Titoli revenues were flat year on year as result of higher Custody revenues, largely due to the rise in assets under custody, offset by lower settlement revenues recorded in the year following a decrease in settlement instructions.

CC&G generates net treasury income by investing the cash margin held, retaining any surplus after members are paid a return on their cash collateral contributions. Net Treasury Income increased by 15% to GBP49 million (2018: GBP43 million) as result of higher average daily initial margin at EUR14.4 billion, 31% higher than 2018 (2018: EUR11.0 billion).

Cost of sales was in line with 2018.

Reported operating expenses excluding D&A decreased by 6% to GBP44 million (2018: GBP47 million), driven by lower IT costs from efficiency and lower staff costs. D&A was flat year on year.

Reported operating profit increased by 11% to GBP92 million (2018: GBP83 million).

Capital Markets

 
                                                                                                           Variance at 
                                      12 months ended Dec 2019  12 months ended Dec 2018  Variance   constant currency 
               Revenue                                    GBPm                      GBPm         %                   % 
====================================  ========================  ========================  ========  ================== 
Primary Markets                                            151                       113        34                  34 
Secondary Markets Equities                                 151                       169      (11)                (11) 
Secondary Markets - Fixed Income, 
 Derivatives and Other                                     124                       125         -                   1 
====================================  ========================  ========================  ========  ================== 
Total revenue                                              426                       407         5                   5 
====================================  ========================  ========================  ========  ================== 
Cost of sales                                              (5)                      (16)      (67)                (67) 
====================================  ========================  ========================  ========  ================== 
Gross profit                                               421                       391         8                   8 
====================================  ========================  ========================  ========  ================== 
Operating expenses before 
 depreciation, amortisation and 
 impairment(1)                                           (192)                     (189)         2                   - 
====================================  ========================  ========================  ========  ================== 
Share of loss after tax of 
 associates                                                (1)                       (1)         -                   - 
====================================  ========================  ========================  ========  ================== 
Earnings before interest, tax, 
 depreciation, amortisation and 
 impairment(1)                                             228                       201        13                   - 
------------------------------------  ------------------------  ------------------------  --------  ------------------ 
Depreciation, amortisation and 
 impairment(1)                                            (32)                      (17)        88                   - 
------------------------------------  ------------------------  ------------------------  --------  ------------------ 
Operating profit (1)                                       196                       184         7                   - 
------------------------------------  ------------------------  ------------------------  --------  ------------------ 
 

(1) Operating expenses before depreciation, amortisation and impairment; earnings before interest, tax, depreciation, amortisation and impairment; depreciation, amortisation and impairment; and operating profit variance percentage is shown on a reported basis only i.e. not on a constant currency basis. Variances will include underlying movements and foreign exchange effects

Capital Markets comprises Primary and Secondary Market activities. Revenue was GBP426 million (2018: GBP407 million).

Primary Markets revenue increased by 34% to GBP151 million in 2019 (2018: GBP113 million) with underlying revenue remaining stable despite uncertainty due to Brexit delays and the UK general election. The Group benefited from a change in estimate relating to IFRS 15 due to a reduction in the length of time initial admissions and further issue revenues are required to be recognised, which resulted in a GBP32 million one-off balance sheet release. The total amount of capital raised across the Group's markets, through both new and further issues, decreased by 18% to GBP23.4 billion (2018: GBP28.7 billion), however four new admissions each raised over GBP1 billion (2018: one admission over GBP1 billion). Although there was a 38% decrease in the number of new issues across the Group's markets to 109 (2018: 176), the average market capitalisation of companies joining the Group's UK markets increased by 50% to GBP849 million (2018: GBP565 million). Further issuance from investment funds accounted for GBP4.2 billion (2018: GBP2.6 billion) with 55% of prior year listings raising further capital in 2019 (2018: 21%) following the trend that funds are able to upscale expediently on the Group's markets to advance their strategies after listing.

Secondary Markets revenue decreased by 11% to GBP151 million (2018: GBP169 million). UK average order book daily value traded fell by 19% to GBP4.7 billion (2018: GBP5.8 billion) in line with the subdued volume trend impacting European equity markets in 2019. Following on the same trend, Italian equity trading volumes also decreased by 10% year on year, with 255,000 trades per day (2018: 282,000). Turquoise, the Group's pan-European equities platform, was similarly impacted with a 36% reduction in average daily equity value traded to EUR2.1 billion (2018: EUR3.2 billion). Lower market volumes on Turquoise Lit Book were partly offset by Turquoise Plato and Turquoise Plato Lit Auctions which had record years, up 3% and 9% respectively on 2018 performance.

Fixed Income, Derivatives and Other revenue remained broadly flat year on year at GBP124 million (2018: GBP125 million). MTS Fixed Income revenue saw a 4% increase with strong performance by Repo up 24% partially offset by a decline of Cash and BondVision down 6% and 3% respectively. Derivatives performance was down 16% driven by the removal of Equity derivatives in the UK during the year and lower volumes on the Italian IDEM market. Growth in ELITE continued, with increased membership revenue in both the UK and Italy.

Cost of sales decreased by 67% to GBP5 million (2018: GBP16 million), primarily driven by Turquoise commercial policy changes from rebate model to discount scheme.

Reported operating expenses excluding D&A increased by 2% to GBP192 million (2018: GBP189 million) while D&A increased 88% to GBP32 million (2018: GBP17 million), reflecting ongoing investment and IFRS 16 right of use asset amortisation.

Share of loss after tax of associates relates to the Group's share of the HUB Exchange funding platform.

Reported operating profit increased by 7% to GBP196 million (2018: GBP184 million).

Technology Services

 
                                                                                                  Variance at constant 
                             12 months ended Dec 2019  12 months ended Dec 2018  Variance                     currency 
                                                 GBPm                      GBPm         %                            % 
===========================  ========================  ========================  ========  =========================== 
Revenue                                            66                        65         2                            1 
Inter-segmental revenue                            17                        21      (19)                         (19) 
---------------------------  ------------------------  ------------------------  --------  --------------------------- 
Total revenue                                      83                        86       (3)                          (3) 
===========================  ========================  ========================  ========  =========================== 
Cost of sales                                     (7)                       (9)      (23)                         (23) 
===========================  ========================  ========================  ========  =========================== 
Gross profit                                       76                        77       (1)                          (1) 
===========================  ========================  ========================  ========  =========================== 
Operating expenses before 
 depreciation, amortisation 
 and impairment(1)                               (20)                      (59)        66                            - 
===========================  ========================  ========================  ========  =========================== 
Earnings before interest, 
 tax, depreciation, 
 amortisation and 
 impairment (1)                                    56                        18       211                            - 
---------------------------  ------------------------  ------------------------  --------  --------------------------- 
Depreciation , amortisation 
 and impairment(1)                               (25)                      (20)        25                            - 
---------------------------  ------------------------  ------------------------  --------  --------------------------- 
Operating profit / (loss) 
 (1)                                               31                       (2)         -                            - 
---------------------------  ------------------------  ------------------------  --------  --------------------------- 
 

(1) Operating expenses before depreciation, amortisation and impairment; earnings before interest, tax, depreciation, amortisation and impairment; depreciation, amortisation and impairment; and operating profit / (loss) variance percentage is shown on a reported basis only i.e. not on a constant currency basis. Variances will include underlying movements and foreign exchange effects

Technology Services provides server location solutions, client connectivity and software products for the Group and third parties.

Third party revenue increased by 1% to GBP66 million (2018: GBP65 million), driven by an expanding product suite and higher sales volumes.

Reported operating expenses excluding D&A decreased by 66% to GBP20 million (2018: GBP59 million), and D&A increased 25% to GBP25 million (2018: GBP20 million), driven by continued Group technology investment.

The Technology segment made a profit of GBP31 million (2018: GBP2 million loss).

Operating Expenses

Group operating expenses (including D&A) before amortisation of purchased intangible assets and non-underlying items, were GBP1,039 million (2018: GBP969 million).

Reported operating expenses increased by 7% (6% on an organic and constant currency basis). Within this, reported expenses excluding D&A were well controlled, with a 1% increase driven by salary and IT costs as the Group continues to invest in new products and resilient infrastructure.

D&A increased by 49%. Within this increase was a GBP26 million amortisation charge relating to implementation of IFRS 16, which requires items categorised as finance leases to be recognised on the balance sheet as an asset and the right to use the asset amortised. Reflecting the 2019 capital expenditure of GBP195 million and ongoing investment, underlying D&A in 2020 is expected to increase by a similar amount as in 2019.

Inorganic expenses increased by GBP1 million due to the acquisition of Beyond Ratings, which supports product expansion in FTSE Russell ESG indices.

The Group continues to integrate Yield Book and continues with the global headcount programme announced in March 2019, delivering a benefit of GBP17 million in 2019. The Group expects to achieve the announced run rate savings of GBP30 million by the end of 2020.

Income from Equity Investments and Share of Loss After Tax of Associates

Income from equity investments of GBP7 million reflects the dividend from the Group's 4.92% share in Euroclear. As the acquisition was in January 2019 there is no prior year comparative.

The share of loss after tax of associates primarily reflects the Group's 44.1% minority share of the operating loss of CurveGlobal of GBP6 million (2018: GBP7 million share of loss). CurveGlobal volumes continued to grow and open interest at the end of 2019 was up 14%, to 395,000 contracts (2018: 348,000 contracts). The Group recognised a GBP1 million share of loss on the Group's investment in the HUB Exchange funding platform (2018: GBP1 million share of loss).

Non-underlying Items

Non-underlying operating items increased by GBP147 million to GBP327 million (2018: GBP180 million). Non-underlying items in 2019 included amortisation and impairment of goodwill and purchased intangible assets of GBP195 million (2018: GBP159 million). Within this, GBP25 million relates to accelerated amortisation in relation to Mergent Inc; GBP15 million relates to impairment of goodwill and purchased intangibles, Turquoise Global Holdings Ltd GBP9 million, driven by uncertainty of future cash flows; and Mergent Inc GBP6 million, driven by lower expected future cash flows than forecast at the time of acquisition.

The Group incurred restructuring costs of GBP32 million (2018: nil) in relation to implementation of the headcount programme announced in March 2019. Integration costs of GBP4 million (2018: GBP12 million) relate to integration of Yield Book.

In relation to acquisitions, the Group has incurred GBP96 million (2018: GBP9 million) of transaction costs.

The Group incurred GBP16 million (2018: nil) of non-underlying financing fees for establishing a bridge financing facility in two tranches of $9.325 billion and EUR3.58 billion (Bridge Facility) in relation to the Refinitiv acquisition.

Finance Income and Expense and Taxation

Net finance costs were GBP71 million, up GBP5 million on the prior year driven by GBP4 million of lease interest recognised as a result of IFRS 16. In October 2019, upon its maturity, the Group repaid a GBP250 million bond with a coupon of 9.125% per annum, drawing down on existing facilities to refinance at significantly lower rates of interest.

The effective tax rate for the period in respect of continuing underlying operations and excluding the effect of prior year adjustments was 23.7% (2018: 21.6%).

This reflects the Group's mix of profits across a largely stable tax base without any material changes in underlying rates but does include several one-off items increasing the rate. These items include the write off of Turquoise Global Holding Ltd's deferred tax assets, London Stock Exchange Plc's pension asset being subjected to a temporary higher rate of tax, increased exposure to US state taxes and a one off increase in US federal tax arising from changes in the US legislation. Excluding one-off items the underlying effective tax rate was 22%.

While the UK corporation tax rate was due to fall to 17% from 1 April 2020 it was made clear during the 2019 general election that the Conservative Party intends to amend this and hold the UK Corporation Tax rate at 19%. With regards to the Group's UK deferred tax assets and liabilities, these are measured on substantially enacted future rates at the balance sheet date, which remains at 17% with the next UK budget schedule for 11 March 2020.

From a sustainability perspective, we do not expect there to be any material changes to both the underlying tax base and tax rates (assuming the UK remains at 19%). If the mix of profits remains constant with 2019 and each sub group achieves a tax rate close to the local statutory rate the Group should expect to record a reported tax rate of between 22% to 23% for 2020.

Cash Flow and Balance Sheet

The Group's business continued to be strongly cash generative during the year, with cash generated from operations of GBP1,089 million (2018: GBP969 million).

At 31 December 2019, the Group had net assets of GBP3,801 million (2018: GBP3,698 million). The central counterparty clearing business assets and liabilities within LCH and CC&G largely offset each other but are shown gross on the balance sheet as the amounts receivable and payable are with different counterparties.

Net debt

 
                                          2019     2018 
Year ended 31 December                    GBPm     GBPm 
=====================================  =======  ======= 
Gross borrowings                         2,085    2,203 
Cash and cash equivalents              (1,493)  (1,510) 
Net derivative financial liabilities        38       47 
=====================================  =======  ======= 
Net debt                                   630      740 
=====================================  =======  ======= 
Regulatory and operational cash          1,125    1,120 
=====================================  =======  ======= 
Operating net debt                       1,755    1,860 
-------------------------------------  -------  ------- 
 

At 31 December 2019, the Group had operating net debt of GBP1,755 million after setting aside GBP1,125 million of cash and cash equivalents held to support regulatory and operational requirements, including cash and cash equivalents at LCH Group and amounts covering regulatory requirements at other LSEG companies. There was little movement in total capital amounts during the year and the Group's operating net debt decreased as cash generated, after organic and inorganic investments and other normal course payment obligations, was applied to pay down borrowings.

In August 2019, the Group arranged a Bridge Facility in connection with its proposed acquisition of Refinitiv. The Bridge Facility offers the Group greater certainty of availability of funds, to potentially refinance the debt it takes on at completion as a result of the acquisition. The Bridge Facility has been arranged on terms appropriate for an investment grade borrower and is available in two tranches, one of $9.325 billion and one of EUR3.580 billion. As at 31 December 2019, the Bridge Facility was undrawn.

In addition to the Bridge Facility, the Group retained total committed bank facilities for general corporate purposes of GBP1.2 billion during the financial year. The maturity of the five-year GBP600 million facility arranged in December 2017 was extended during the period for a further year to December 2024. The Group therefore continues to be well positioned to fund future growth. Strong cash generation, GBP678 million of undrawn committed bank lines (after taking into account committed, swingline backstop coverage for the EUR300 million euro commercial paper in issuance) and the Bridge Facility, continued to provide an appropriate level of financial flexibility to the Group in its planning at the end of 2019.

The Group's interest cover, the coverage of net finance expense by EBITDA (consolidated earnings before net finance charges, taxation, impairment, depreciation and amortisation, foreign exchange gains or losses and non-underlying items), decreased to 14.4 times in the 12 months to 31 December 2019 (31 December 2018: 16.1 times) due to the additional costs of the Bridge Facility. Net leverage (operating net debt to EBITDA updated to account for the EBITDA of acquisitions or disposals undertaken in the period) decreased to 1.4 times at 31 December 2019 (31 December 2018: 1.8 times) and returns the Group to the middle of its targeted range of 1-2 times.

At the end of 2019, the Group's long-term credit ratings were A3 and A with Moody's and S&P respectively, with both agencies having moved their ratings to a negative outlook in anticipation of the impact of the Refinitiv acquisition on net leverage. Both agencies are positive about the strategic rationale for the transaction and note the Group's clearly positioned de-leveraging plans. Prior to the announcement of the Refinitiv acquisition on 1 August 2019, S&P had upgraded LSEG by one notch to the current A rating and Moody's had applied a positive outlook to its A3, reflecting their views on the Group's continued progress as it diversifies and strengthens its businesses and resulting earnings.

Foreign exchange

 
                                     2019  2018 
===================================  ====  ==== 
Spot GBP/EUR rate at 31 December     1.17  1.11 
===================================  ====  ==== 
Spot GBP/US$ rate at 31 December     1.31  1.27 
===================================  ====  ==== 
Average GBP/EUR rate for the year    1.14  1.13 
===================================  ====  ==== 
Average GBP/ US$ rate for the year   1.28  1.34 
-----------------------------------  ----  ---- 
 

The Group's principal foreign exchange exposure arises as a result of translating its foreign currency earnings, assets and liabilities into LSEG's reporting currency of Sterling. For the 12 months to 31 December 2019, the main exposures for the Group were its European based Euro reporting businesses and its US based operations, principally Russell Indexes, Mergent and The Yield Book. A 10 euro cent movement in the average GBP/EUR rate for the year and a 10 cent movement in the average GBP/US$ rate for the year would have changed the Group's operating profit for the year before amortisation of purchased intangible assets and non-underlying items by approximately GBP29 million and GBP34 million, respectively.

The Group continues to manage its translation risk exposure by, where possible, matching the currency of its debt to the currency of its earnings, to ensure its key financial ratios are protected from material foreign exchange rate volatility.

Earnings per share

The Group delivered a 15% increase in adjusted basic earnings per share, which excludes amortisation of purchased intangible assets and non-underlying items, to 200.3 pence (2018: 173.8 pence). Basic earnings per share were 119.5 pence (2018: 138.3 pence).

Dividend

The Board is proposing a final dividend of 49.9 pence per share, which together with the interim dividend of 20.1 pence per share paid to shareholders in September 2019, results in a 16% increase in the total dividend to 70.0 pence per share. The final dividend will be paid on 27 May 2020 to shareholders on the register as at 1 May 2020.

Financial Targets

At an Investor Update event in June 2017, the Group set out financial targets for 2017-2019, with the 2019 outcome provided below.

 
 Financial Targets to 2019                    Performance 
                                             ----------------------------- 
 FTSE       Double-digit growth to continue   2019: Up 10% on a reported 
  Russell    2017-2019                         basis; up 6% on a constant 
                                               currency basis 
---------  --------------------------------  ----------------------------- 
 LCH        Double-digit OTC revenue growth   2019: Up 15% on a reported 
             to continue                       basis; up 13% on a constant 
                                               currency basis 
 
             Adjusted EBITDA margin growth     2019: 55% 
             - approaching 50% by 2019 
---------  --------------------------------  ----------------------------- 
 

Targets relating to increases in operating expenses and Group EBITDA margin of c55% were stepped away from at the end of 2018. The Group achieved an EBITDA margin of 54.7% in 2019.

Capital Management Framework

The Group has reviewed its Capital Management Framework, which remains broadly unchanged (shown below). The Group continues to focus on maintaining a prudent balance sheet while also continuing to deploy capital for select organic and inorganic investments. Returns to shareholders, including share buy-backs, will continue to be kept under review.

 
 Prudent Balance Sheet         Flexibility to operate within this range 
  management                    for normal investment / development and 
  Maintain existing leverage    to go above this range in the short term 
  target of 1.0-2.0x Net        for compelling strategic opportunities 
  Debt / EBITDA                 Manage credit rating, debt profile, and 
                                regulatory requirements 
                              ----------------------------------------------- 
 Investment for growth         Selective inorganic investment opportunities 
  Preserve flexibility          - meeting high internal hurdles 
  to pursue growth both         Continued organic investments 
  organically and through 
  'bolt-on'/strategic M&A 
----------------------------  ----------------------------------------------- 
 Ordinary dividend policy      Progressive dividend - reflects confidence 
  Progressive ordinary          in strong future financial position 
  dividend policy               Operating in target 2.5-3.0x dividend 
                                cover range 
                                Interim dividend payment of 1/3 of prior 
                                full year dividend results 
----------------------------  --------------------------------------------- 
 Other capital returns         Continue to keep other returns under review 
----------------------------  --------------------------------------------- 
 

CONSOLIDATED INCOME STATEMENT

 
Year ended 31 December 2019 
                                                         2019                                2018 
                                          ----------------------------------  ---------------------------------- 
                                          Underlying  Non-underlying   Total  Underlying  Non-underlying   Total 
Continuing operations              Notes        GBPm            GBPm    GBPm        GBPm            GBPm    GBPm 
Revenue                                4       2,056               -   2,056       1,911               -   1,911 
Net treasury income 
 from CCP clearing business            4         255               -     255         218               -     218 
Other income                           4           3               -       3           6               -       6 
---------------------------------  -----  ----------  --------------  ------  ----------  --------------  ------ 
Total income                                   2,314               -   2,314       2,135               -   2,135 
Cost of sales                          4       (210)               -   (210)       (227)               -   (227) 
Gross profit                                   2,104               -   2,104       1,908               -   1,908 
Expenses 
Operating expenses before 
 depreciation, amortisation           5, 
 and impairment                        7       (839)           (132)   (971)       (834)            (21)   (855) 
Income from equity investments         4           7               -       7           -               -       - 
Share of loss after 
 tax of associates                     4         (7)               -     (7)         (8)               -     (8) 
---------------------------------  -----  ----------  --------------  ------  ----------  --------------  ------ 
Earnings before interest, 
 tax, depreciation, amortisation 
 and impairment                                1,265           (132)   1,133       1,066            (21)   1,045 
Depreciation, amortisation 
 and impairment                        7       (200)           (195)   (395)       (135)           (159)   (294) 
 
Operating profit/(loss)                        1,065           (327)     738         931           (180)     751 
 
Finance income                                    14               -      14          13               -      13 
Finance expense                                 (85)            (16)   (101)        (79)               -    (79) 
                                          ----------  --------------  ------  ----------  --------------  ------ 
                                      7, 
Net finance expense                    8        (71)            (16)    (87)        (66)               -    (66) 
Profit/(loss) before 
 tax                                             994           (343)     651         865           (180)     685 
 
                                      7, 
Taxation                               9       (236)              50   (186)       (187)              55   (132) 
Profit/(loss) for the 
 year                                            758           (293)     465         678           (125)     553 
---------------------------------  -----  ----------  --------------  ------  ----------  --------------  ------ 
Profit/(loss) attributable 
 to: 
Equity holders                                   699           (282)     417         603           (123)     480 
Non-controlling interests                         59            (11)      48          75             (2)      73 
Profit/(loss) for the 
 year                                            758           (293)     465         678           (125)     553 
---------------------------------  -----  ----------  --------------  ------  ----------  --------------  ------ 
 
Earnings per share attributable 
 to equity holders 
Basic earnings per share              10                              119.5p                              138.3p 
Diluted earnings per 
 share                                10                              118.1p                              136.0p 
Adjusted basic earnings 
 per share                            10                              200.3p                              173.8p 
Adjusted diluted earnings 
 per share                            10                              198.0p                              170.8p 
 
Dividend per share in 
 respect of the financial 
 year 
Dividend per share paid 
 during the year                      11                               20.1p                               17.2p 
Dividend per share declared 
 for the year                         11                               49.9p                               43.2p 
---------------------------------  -----  ----------  --------------  ------  ----------  --------------  ------ 
 
 

CONSOLIDATED STATEMENT of comprehensive income

 
Year ended 31 December 2019 
                                                           2019  2018 
                                                   Notes   GBPm  GBPm 
 
Profit for the year                                         465   553 
 
Other comprehensive income: 
 
Items that will not be subsequently reclassified 
 to profit or loss: 
 Defined benefit pension scheme remeasurement 
  gain/(loss)                                                 7  (12) 
 Income tax relating to these items                    9      -     5 
                                                              7   (7) 
-------------------------------------------------  -----  -----  ---- 
 
Items that may be subsequently reclassified to profit 
 or loss: 
 Net gains/(losses) on net investment hedges                 71  (55) 
 
 Debt instruments at fair value through other 
  comprehensive income: 
 - Net gains/(losses) from changes in fair 
  value                                                      16  (21) 
 - Net (gains)/losses reclassified to the 
  consolidated income statement on disposal                 (2)     4 
 
 Exchange (losses)/gains on translation of 
  foreign operations                                      (218)   168 
 Income tax relating to these items                    9    (5)     4 
 
                                                          (138)   100 
-------------------------------------------------  -----  -----  ---- 
Other comprehensive income net of tax                     (131)    93 
-------------------------------------------------  -----  -----  ---- 
Total comprehensive income for the year                     334   646 
-------------------------------------------------  -----  -----  ---- 
 
Total comprehensive income attributable to: 
Equity holders                                              298   572 
Non-controlling interests                                    36    74 
Total comprehensive income for the year                     334   646 
-------------------------------------------------  -----  -----  ---- 
 
 

balance sheet

 
At 31 December 2019 
                                                       2019     2018 
                                             Notes     GBPm     GBPm 
Assets 
Non-current assets 
Property, plant and equipment                           288      149 
Intangible assets                               12    4,421    4,687 
Investment in associates                                 28       25 
Deferred tax assets                                      49       42 
Investments in financial assets                 13      266       31 
Retirement benefit asset                                 66       46 
Trade and other receivables                     13       19       33 
                                                      5,137    5,013 
------------------------------------------  ------  -------  ------- 
Current assets 
Trade and other receivables                     13      566      785 
Derivative financial instruments                13        2        - 
Clearing member financial assets                    729,094  764,411 
Clearing member cash and cash equivalents            67,118   70,927 
                                                    -------  ------- 
Clearing member assets                          13  796,212  835,338 
Current tax                                             160      147 
Investments in financial assets                 13       81       53 
Cash and cash equivalents                             1,493    1,510 
------------------------------------------  ------  -------  ------- 
                                                    798,514  837,833 
------------------------------------------  ------  -------  ------- 
 
Total assets                                        803,651  842,846 
------------------------------------------  ------  -------  ------- 
 
Liabilities 
Current liabilities 
Trade and other payables                        13      620      538 
Contract liabilities                                    157      153 
Derivative financial instruments                13        1       30 
Clearing member liabilities                     13  796,102  835,508 
Current tax                                             127       61 
Borrowings                                  13, 14      512      561 
Provisions                                               19        2 
------------------------------------------  ------  -------  ------- 
                                                    797,538  836,853 
 
Non-current liabilities 
Borrowings                                  13, 14    1,573    1,642 
Derivative financial instruments                13       39       17 
Contract liabilities                                     88      118 
Deferred tax liabilities                                432      475 
Retirement benefit obligations                           17       22 
Other non-current payables                      13      150       11 
Provisions                                               13       10 
                                                      2,312    2,295 
------------------------------------------  ------  -------  ------- 
Total liabilities                                   799,850  839,148 
------------------------------------------  ------  -------  ------- 
Net assets                                            3,801    3,698 
------------------------------------------  ------  -------  ------- 
 
Equity 
Capital and reserves attributable to 
 the Company's equity holders 
Ordinary share capital                          16       24       24 
Share premium                                   16      967      965 
Retained earnings                                       668      424 
Other reserves                                        1,796    1,930 
 
Total shareholders' funds                             3,455    3,343 
Non-controlling interests                               346      355 
------------------------------------------  ------  -------  ------- 
Total equity                                          3,801    3,698 
------------------------------------------  ------  -------  ------- 
 

cash flow statement

 
Year ended 31 December 2019 
                                                                      2019   2018 
                                                             Notes    GBPm   GBPm 
-----------------------------------------------------------  ------  -----  ----- 
Cash flow from operating activities 
Cash generated from operations                                   17  1,089    969 
Interest received                                                        6      3 
Interest paid                                                        (103)   (76) 
Royalties paid                                                         (2)    (2) 
Corporation tax paid                                                 (153)  (173) 
Withholding tax received                                                 -      1 
-----------------------------------------------------------  ------  -----  ----- 
Net cash inflow from operating activities                              837    722 
-----------------------------------------------------------  ------  -----  ----- 
 
Cash flow from investing activities 
Purchase of property, plant and equipment                             (41)   (50) 
Purchase of intangible assets                                    12  (154)  (144) 
Proceeds from sale of businesses (1)                                    30     58 
Cash disposed as part of the sale of businesses                          -    (2) 
Acquisition of business, net of cash acquired 
 (2)                                                             19   (14)      3 
Investment in associates                                              (11)   (28) 
Investments in financial assets classed as FVOCI                 13  (247)      - 
Investment in government bonds                                         (3)      - 
Net cash outflow from investing activities                           (440)  (163) 
-----------------------------------------------------------  ------  -----  ----- 
 
Cash flow from financing activities 
Dividends paid to shareholders                                   11  (221)  (189) 
Dividends paid to non-controlling interests                           (40)   (42) 
Purchase of non-controlling interests (3)                              (9)  (452) 
Purchase of own shares by the employee benefit 
 trust                                                                 (5)    (4) 
Proceeds from exercise of employee share options                         5      7 
Issue of convertible debt to external party                            (4)      - 
Loan to associate                                                      (1)      - 
Arrangement fee paid                                                     -    (4) 
Proceeds from the issue of bonds                                         -    445 
Bond repayment                                                       (250)      - 
Proceeds from the issue of commercial paper                              -    255 
Repayments made towards bank credit facilities                        (35)  (489) 
Additional drawdowns from bank credit facilities                       261      - 
Principal element of lease payments (2018: Payments 
 towards lease obligations)                                           (41)    (2) 
Net cash outflow from financing activities                           (340)  (475) 
-----------------------------------------------------------  ------  -----  ----- 
Increase in cash and cash equivalents                                   57     84 
Cash and cash equivalents at beginning of year                       1,510  1,382 
Exchange (loss)/gain on cash and cash equivalents                     (74)     44 
Cash and cash equivalents at end of year                             1,493  1,510 
-----------------------------------------------------------  ------  -----  ----- 
 
The Group's net cash inflow from operating activities of GBP837 
 million includes GBP98 million of expenses related to non-underlying 
 items. 
(1) Proceeds from sale of businesses include deferred consideration 
 of GBP29 million received by the Group from its disposal of Russell 
 Investment Management in 2016 and a further GBP1 million received 
 in the current year for the disposal of Exactpro Systems Limited 
 and its subsidiaries in the prior year. Proceeds from sale of businesses 
 in the prior year relates to GBP58 million deferred consideration 
 received by the Group from its disposal of Russell Investment Management. 
(2) Acquisition of business, net of cash acquired, in the current 
 year relates to the Group's acquisition of 100% of Beyond Ratings 
 SAS for GBP14 million. In the prior year, the Group received GBP3 
 million from the vendors of the Yield Book business on finalisation 
 of the purchase price. 
(3) Purchase of non-controlling interests relates to the Group's 
 purchase of the remaining 30% interest in EuroTLX SIM S.p.A. from 
 non-controlling equity holders for GBP9 million (EUR10.2 million). 
 During the prior year, the Group completed the purchase of shareholdings 
 from non-controlling equity holders in LCH Group Holdings Limited 
 and FTSE Global Debt Capital Markets Limited for cash consideration 
 of GBP413 million and GBP39 million respectively. 
 

Group cash flow does not include cash and cash equivalents held by the Group's Post Trade operations on behalf of their clearing members for use in their operations as managers of the clearing and guarantee systems. These balances represent margins and default funds held for counterparties for short periods in connection with these operations.

STATEMENT OF CHANGES IN EQUITY

 
Year ended 31 December 2019 
                                          Attributable to equity holders 
                              ------------------------------------------------------- 
                                                                                Total 
                              Ordinary                                   attributable 
                                 share     Share   Retained      Other      to equity  Non-controlling    Total 
                               capital   premium   earnings   reserves        holders        interests   equity 
                                  GBPm      GBPm       GBPm       GBPm           GBPm             GBPm     GBPm 
----------------------------  --------  --------  ---------  ---------  -------------  ---------------  ------- 
31 December 2017                    24       964        324      1,820          3,132              525    3,657 
Profit for the year                  -         -        480          -            480               73      553 
Other comprehensive 
 income for the year                 -         -       (18)        110             92                1       93 
Issue of shares (note 
 16)                                 -         1          -          -              1                -        1 
Final dividend relating 
 to the year ended 31 
 December 2017 (note 
 11)                                 -         -      (129)          -          (129)                -    (129) 
Interim dividend relating 
 to the year ended 31 
 December 2018 (note 
 11)                                 -         -       (60)          -           (60)                -     (60) 
Dividend payments to 
 non-controlling interests           -         -          -          -              -             (42)     (42) 
Employee share scheme 
 expenses                            -         -         38          -             38                -       38 
Tax in relation to 
 employee share scheme 
 expenses                            -         -          7          -              7                -        7 
Purchase of non-controlling 
 interest within acquired 
 subsidiary                          -         -      (218)          -          (218)            (202)    (420) 
 
31 December 2018                    24       965        424      1,930          3,343              355    3,698 
Impact of adoption 
 of IFRS 16 (note 2)                 -         -       (23)          -           (23)                -     (23) 
----------------------------  --------  --------  ---------  ---------  -------------  ---------------  ------- 
1 January 2019 (restated)           24       965        401      1,930          3,320              355    3,675 
 
Profit for the year                  -         -        417          -            417               48      465 
Other comprehensive 
 income for the year                 -         -         15      (134)          (119)             (12)    (131) 
Issue of shares (note 
 16)                                 -         2          -          -              2                -        2 
Final dividend relating 
 to the year ended 31 
 December 2018 (note 
 11)                                 -         -      (151)          -          (151)                -    (151) 
Interim dividend relating 
 to the year ended 31 
 December 2019 (note 
 11)                                 -         -       (70)          -           (70)                -     (70) 
Dividend payments to 
 non-controlling interests           -         -          -          -              -             (44)     (44) 
Employee share scheme 
 expenses                            -         -         37          -             37                -       37 
Tax in relation to 
 employee share scheme 
 expenses                            -         -         17          -             17                -       17 
Purchase of non-controlling 
 interest within acquired 
 subsidiary                          -         -          2          -              2              (1)        1 
 
31 December 2019                    24       967        668      1,796          3,455              346    3,801 
----------------------------  --------  --------  ---------  ---------  -------------  ---------------  ------- 
 

Shares held in the Employee Benefit Trust to settle exercises of employee share awards were 517,563 ( 2018 : 573,672).

Employee share scheme expenses include costs related to the issue and purchase of own shares for employee share schemes of GBP(5) million ( 2018 : GBP(4) million), subscriptions, net of sundry costs, received on the vesting of employee share schemes of GBP5 million ( 2018 : GBP6 million) and equity-settled share scheme expenses for the year of GBP37 million ( 2018: GBP36 million).

Purchase of non-controlling interests in the year relates to the Group's acquisition of the remaining 30% of interest in EuroTLX SIM S.p.A. In the prior year, the Group acquired an additional 16.68% interest in LCH Group Holdings Limited and the remaining 27.26% interest in FTSE Global Debt Capital Markets Limited.

Other reserves comprise the following:

Merger reserve of GBP1,305 million ( 2018 : GBP1,305 million), a reserve that arose when the Company issued shares as part of the consideration to acquire subsidiary companies.

Capital redemption reserve of GBP514 million ( 2018 : GBP514 million), a reserve set up as a result of a court approved capital reduction.

Reverse acquisition reserve of GBP(512) million ( 2018 : GBP(512) million), a reserve arising on consolidation as a result of the capital reduction scheme.

Foreign exchange translation reserve of GBP535 million ( 2018 : GBP740 million), a reserve reflecting the impact of foreign currency changes on the translation of foreign operations.

Hedging reserve of GBP(46) million ( 2018 : GBP(117) million), a reserve representing the cumulative fair value adjustments recognised in respect of net investment and cash flow hedges undertaken in accordance with hedge accounting principles.

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation and accounting policies

The Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations endorsed by the European Union (EU), and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

The financial statements are prepared under the historical cost convention as modified by the revaluation of assets and liabilities held at fair value and on the basis of the Group's accounting policies.

The Group uses a columnar format for the presentation of its consolidated income statement. This enables the Group to aid the reader's understanding of its results by presenting profit for the year before any non-underlying items. Non-underlying items include amortisation of purchased intangible assets and other income or expenses not considered to drive the operating results of the Group. This is the profit measure used to calculate adjusted earnings per share. Profit before non-underlying items is reconciled to profit before taxation on the face of the income statement.

Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiary companies with all inter-company balances and transactions eliminated, together with the Group's attributable share of the results of associates. The results of subsidiary companies sold or acquired in the period are included in the income statement up to, or from, the date that control passes. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The acquisition of subsidiary companies is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Upon completion of the Group's fair value exercise, comparatives are revised up to 12 months after the acquisition date, for the final fair value adjustments. Further details are provided in Note 19 . Adjustments to fair values include those made to bring accounting policies into line with those of the Group.

The Group applies a policy of treating transactions with non-controlling interests through the economic entity model. Transactions with non-controlling interests are recognised in equity. Where the non-controlling interest has an option to dispose of their holding to the Group, then the amounts potentially due are recognised at their fair value at the balance sheet date.

Recent accounting developments

The following standards and amendments have been endorsed by the EU and adopted in these financial statements:

   --      IFRS 16, 'Leases' 
   --      IFRIC 23, 'Uncertainty over Income Tax Treatments' 
   --      Amendments to IAS 28, 'Long-term interest in Associates and Joint Ventures' 
   --      Amendments to IAS 19, 'Plan amendment, curtailment or settlement' 
   --      Amendments to IFRS 9, 'Prepayment features with negative compensation' 
   --      Annual improvements to IFRS standards 2015-2017 

The impact of adopting IFRS 16 on the Group's financial results is described in detail in note 2. The adoption of the other amendments did not have a material impact on the results of the Group.

The following standards and interpretations have been issued by the International Accounting Standards Board (IASB) and IFRIC, but have not been adopted because they are not yet mandatory and the Group has not chosen to early adopt. The Group plans to adopt these standards and interpretations when they become effective. The impact on the Group's financial statements of the future standards, amendments and interpretations is still under review, and where appropriate, a description of the impact of certain standards and amendments is provided below:

 
 International accounting standards and interpretations   Effective date 
-------------------------------------------------------  --------------- 
 Amendments to References to the Conceptual Framework 
  in IFRS Standards                                       1 January 2020 
 Amendments to IFRS 3, 'Business Combinations'            1 January 2020 
 Amendments to IAS 1 and IAS 8: Definition of 
  Material                                                1 January 2020 
 Amendments to IFRS 9, IAS 39 & IFRS 7: Interest 
  Rate Benchmark Reform                                   1 January 2020 
 IFRS 17, 'Insurance Contracts'                           1 January 2021 
-------------------------------------------------------  --------------- 
 

The above amendments and standards are not expected to have a material impact on the results of the Group.

2. Adoption of new accounting standards and interpretations

On 1 January 2019, the Group adopted IFRS 16 'Leases'. The impact of adopting the new standard has been reflected through transition adjustments to the Group's opening retained earnings at the start of the current year, as presented in the consolidated statement of changes in equity. The table below provides a summary of the impact at the date of transition:

 
                                            As         Impact      After 
                                      reported    of adoption   adoption 
                                   31 December                 1 January 
                                          2018                      2019 
                                          GBPm           GBPm       GBPm 
--------------------------------   -----------  -------------  --------- 
 
Property, plant and equipment              149            172        321 
Investment in leases                         -              3          3 
Assets                                     149            175        324 
---------------------------------  -----------  -------------  --------- 
 
Lease liabilities - current                  4             39         43 
Lease liabilities - non-current              1            162        163 
Trade and other payables - 
 accruals                                  355            (3)        352 
Deferred tax liabilities                   475            (4)        471 
Provisions                                  12              4         16 
---------------------------------  -----------  -------------  --------- 
Liabilities                                847            198      1,045 
---------------------------------  -----------  -------------  --------- 
 
Retained earnings                          424           (23)        401 
Equity                                     424           (23)        401 
---------------------------------  -----------  -------------  --------- 
 

The Group adopted IFRS 16 on 1 January 2019 using the modified retrospective transitional arrangements and consequently the comparative amounts have not been restated.

The standard requires the Group to recognise a 'right-of-use' asset where the Group has a long-term arrangement to benefit from an asset which it controls in return for regular consideration (a lease). This definition includes the majority of the Group's offices around the world, and these form the largest group of assets recognised on 1 January 2019. Other assets include motor vehicles.

The Group has recognised right-of-use assets and corresponding liabilities for all leased assets, except for those with only short-term commitment (less than 12 months) or for individual assets of a value less than GBP5,000. In such cases, the Group recognises the associated lease payments as an expense on a straight-line basis over the lease term.

Right-of-use assets for property or equipment are included within property, plant and equipment on the face of the balance sheet. Assets relating to the right-of-use of an intangible are included within intangible assets on the face of the balance sheet.

The cost of right-of-use assets was calculated as if the Group had always applied the new standard but using an incremental borrowing rate calculated as at 31 December 2018. The value recognised for lease liabilities is the present value of the remaining lease payments, discounted to 1 January 2019 using the same rate.

The following practical expedients have been applied by the Group:

-- The use of hindsight to determine the lease term, if the contract included extensions or break clauses

-- Application of the short-term lease exemption to leases that expired before 31 December 2019

   --      Excluding initial direct costs from the measurement of the cost of the asset 

-- Applying a single discount rate to groups of leases with similar characteristics, e.g. similar period and location

A reconciliation of the new liabilities recognised to the amounts disclosed at 31 December 2018 as lease commitments is given below:

 
                                                             GBPm 
-----------------------------------------------------------  ---- 
Lease commitments at 31 December 2018                         226 
Discounted lease commitments at 1 January 2019                198 
Less: 
Lease liabilities recognised as short-term leases             (2) 
Add: 
Leases not previously recognised                                5 
Adjustments in respect of change in treatment of extension 
 options                                                        5 
-----------------------------------------------------------  ---- 
Lease liabilities as at 1 January 2019                        206 
-----------------------------------------------------------  ---- 
 
 
Weighted average incremental borrowing rate as at 1 January 
 2019                                                         2.4% 
 

3. Significant judgements and estimates

Judgements and estimates are regularly evaluated based on historical experience, current circumstances and expectations of future events.

Estimates:

For the year ended 31 December 2019, the following areas require the use of estimates:

Impairment of intangible assets and goodwill - these assets form a significant part of the balance sheet and are key assets for the cash generating business in the Group. The recoverable amounts of relevant cash generating units are based on value in use calculations using management's best estimate of future performance and estimates of the return required by investors to determine an appropriate discount rate. Details are provided in note 12;

Defined benefit pension asset or liability - determined based on the present value of future pension obligations using assumptions determined by the Group with advice from an independent qualified actuary; and

Estimated service period for admission and listing services within the Primary Markets business - the Group determines the estimated period for admission services using historical analysis of listing durations in respect of the companies on our markets. The estimated service period inherently incorporates an element of uncertainty in relation to the length of a customer listing which is subject to factors outside of the Group's control. The estimated service periods are reassessed at each reporting date to ensure the period reflects the Group's best estimates. T he Group estimates that a one year decrease in the deferral period would cause an estimated GBP19 million increase in revenue and a one year increase in the deferral period would cause an estimated GBP17 million decrease in revenue recognised in the year.

Judgements:

In preparing the financial statements for the year ended 31 December 2019, the following judgement has been made:

Clearing member trading assets and trading liabilities - The Group uses its judgement to carry out the offsetting within clearing member balances. The carrying values of the balances are offset at what the Group considers an appropriate level to arrive at the net balances reported in the balance sheet. The Group has an aligned approach for its CCP subsidiaries to ensure the principles applied are consistent across similar assets and liabilities. The approach is reviewed on a timely basis to ensure the approach used is the most appropriate.

EU State Aid - The Group has used its judgement to assess any obligations arising in relation to EU State Aid investigations. Considering the appeals made by the UK PLCs (including the Group), UK Government, and management's internal view, the Group does not consider any provision is required in relation to this investigation. Additional details are provided in note 9.

4. Segmental information

The Group is organised into operating units based on its service lines and has six reportable segments: Information Services, Post Trade Services - LCH, Post Trade Services - CC&G and Monte Titoli, Capital Markets, Technology Services and Other. These segments generate revenue in the following areas:

   --      Information Services - Subscription and licence fees for data and index services provided; 

-- Post Trade Services - LCH - Fees based on CCP and clearing services provided, non-cash collateral management and net interest earned on cash held for margin and default funds;

-- Post Trade Services - CC&G and Monte Titoli - Clearing fees based on trades and contracts cleared, net interest earned on cash, securities held for margin and default funds, and fees from settlement and custody services;

-- Capital Markets - Admission fees from initial listing and further capital raises, annual fees charged for securities traded on the Group's markets, and fees from our secondary market services;

-- Technology Services - Capital markets software licences and related IT infrastructure, network connection and server hosting services; and

   --      Other - Includes events and media services. 

The Executive Committee monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. The Executive Committee primarily uses a measure of adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) to assess the performance of the operating segments.

Sales between segments are carried out at arm's length and are eliminated on consolidation.

 
Segmental disclosures for the year ended 31 December 2019 are as 
 follows: 
 
                                                              Post 
                                                             Trade 
                                                  Post    Services 
                                                 Trade      - CC&G 
                               Information    Services   and Monte   Capital  Technology 
                                  Services       - LCH      Titoli   Markets    Services  Other  Eliminations  Group 
                                      GBPm        GBPm        GBPm      GBPm        GBPm   GBPm          GBPm   GBPm 
-----------------------------  -----------  ----------  ----------  --------  ----------  -----  ------------  ----- 
Revenue from external 
 customers                             902         550         103       426          66      9             -  2,056 
Inter-segmental revenue                  -           -           -         -          17      -          (17)      - 
-----------------------------  -----------  ----------  ----------  --------  ----------  -----  ------------  ----- 
Revenue                                902         550         103       426          83      9          (17)  2,056 
Net treasury income 
 from CCP clearing 
 business                                -         206          49         -           -      -             -    255 
Other income                             -           -           -         -           -      3             -      3 
-----------------------------  -----------  ----------  ----------  --------  ----------  -----  ------------  ----- 
Total income                           902         756         152       426          83     12          (17)  2,314 
-----------------------------  -----------  ----------  ----------  --------  ----------  -----  ------------  ----- 
 
Cost of sales                         (74)       (114)         (7)       (5)         (7)    (3)             -  (210) 
 
Gross profit                           828         642         145       421          76      9          (17)  2,104 
-----------------------------  -----------  ----------  ----------  --------  ----------  -----  ------------  ----- 
 
Income from equity 
 investments                             -           7           -         -           -      -             -      7 
Share of loss after 
 tax of associates                       -           -           -       (1)           -    (6)             -    (7) 
-----------------------------  -----------  ----------  ----------  --------  ----------  -----  ------------  ----- 
 
Earnings before interest, 
 tax, depreciation, 
 amortisation and impairment           505         415         101       228          56   (34)           (6)  1,265 
Underlying depreciation, 
 amortisation and impairment          (56)        (76)         (9)      (32)        (25)    (6)             4  (200) 
 
Operating profit/(loss) 
 before non-underlying 
 items                                 449         339          92       196          31   (40)           (2)  1,065 
Amortisation and impairment 
 of goodwill and purchased 
 intangible assets                                                                                             (195) 
Other non-underlying 
 items                                                                                                         (132) 
-----------------------------                                                                    ------------  ----- 
Operating profit                                                                                                 738 
Net finance expense 
 including non-underlying 
 items                                                                                                          (87) 
Profit before tax                                                                                                651 
 

Revenue from external customers principally comprises fees for services rendered of GBP1,981 million (2018: GBP1,837 million) and Technology Services of GBP66 million (2018: GBP65 million).

Net treasury income from CCP clearing businesses of GBP255 million (2018: GBP218 million) comprises gross interest income of GBP1,337 million (2018: GBP1,025 million) less gross interest expense of GBP1,082 million (2018: GBP807 million).

During the year the Group recognised a total of GBP29 million (2018: GBP106 million) of net treasury income on financial assets and financial liabilities held at amortised cost comprising GBP1,028 million (2018: GBP732 million) gross treasury income and GBP999 million (2018: GBP626 million) gross treasury expense.

GBP226 million net income (2018: GBP112 million net gain) on assets held at fair value was recognised, comprising GBP309 million (2018: GBP293 million) income and GBP83 million (2018: GBP181 million) expense.

Presented within revenue are net settlement expenses from the CCP clearing businesses of net nil (2018: GBP2 million) which comprise gross settlement income of GBP30 million (2018: GBP24 million) less gross settlement expense of GBP30 million (2018: GBP26 million).

 
The Group's revenue from contracts with customers disaggregated 
 by segment, major product and service line, and timing of revenue 
 recognition for the year ended 31 December 2019 is shown below: 
 
Revenue from 
external 
customers 
                                                        Post 
                                                       Trade 
                                             Post   Services 
                                            Trade     - CC&G 
                  Information            Services  and Monte     Capital  Technology 
                     Services               - LCH     Titoli     Markets    Services         Other  Group 
                         GBPm                GBPm       GBPm        GBPm        GBPm          GBPm   GBPm 
 
Major product & 
service 
lines 
FTSE Russell 
 Indexes - 
 subscription             418                   -          -           -           -             -    418 
FTSE Russell 
 Indexes - 
 asset based              231                   -          -           -           -             -    231 
Real time data             97                   -          -           -           -             -     97 
Other 
 information 
 services                 156                   -          -           -           -             -    156 
Clearing                    -                 550         43           -           -             -    593 
Settlement, 
 custody and 
 other                      -                   -         60           -           -             -     60 
Primary capital 
 markets                    -                   -          -         151           -             -    151 
Secondary 
 capital markets 
 - equities                 -                   -          -         151           -             -    151 
Secondary 
 capital markets 
 - fixed income, 
 derivatives 
 and other                  -                   -          -         124           -             -    124 
Capital markets 
 software 
 licences                   -                   -          -           -          66             -     66 
Other                       -                   -          -           -           -             9      9 
Total revenue 
 from contracts 
 with customers           902                 550        103         426          66             9  2,056 
 
Timing of 
revenue 
recognition 
Services 
 satisfied at 
 a point in time           42                 544         95         283           4             7    975 
Services 
 satisfied over 
 time                     860                   6          8         143          62             2  1,081 
Total revenue 
 from contracts 
 with customers           902                 550        103         426          66             9  2,056 
 
 
  Segmental disclosures for the year ended 31 December 2018 are 
  as follows: 
                                             Post 
                                            Trade 
                                         Services 
                                   Post         - 
                                  Trade      CC&G 
                               Services       and 
                  Information         -     Monte    Capital  Technology 
                     Services       LCH    Titoli    Markets    Services       Other  Eliminations           Group 
                         GBPm      GBPm      GBPm       GBPm        GBPm        GBPm          GBPm            GBPm 
Revenue from 
 external 
 customers                841       487       102        407          65           9             -           1,911 
Inter-segmental 
 revenue                    -         -         1          -          21           -          (22)               - 
Revenue                   841       487       103        407          86           9          (22)           1,911 
Net treasury 
 income 
 from CCP 
 clearing 
 business                   -       175        43          -           -           -             -             218 
Other income                -         -         -          -           -           6             -               6 
Total income              841       662       146        407          86          15          (22)           2,135 
Cost of sales            (70)     (123)       (7)       (16)         (9)         (2)             -           (227) 
Gross profit              771       539       139        391          77          13          (22)           1,908 
 
Share of loss 
 after 
 tax of 
 associates                 -         -         -        (1)           -         (7)             -             (8) 
 
Earnings before 
 interest, 
 tax, 
 depreciation, 
 amortisation 
 and 
 impairment               469       304        92        201          18         (5)          (13)           1,066 
Underlying 
 depreciation, 
 amortisation 
 and 
 impairment              (29)      (62)       (9)       (17)        (20)         (2)             4           (135) 
Operating 
 profit/(loss) 
 before 
 non-underlying 
 items                    440       242        83        184         (2)         (7)           (9)             931 
Amortisation and 
 impairment of 
 goodwill 
 and purchased 
 intangible 
 assets                                                                                                      (159) 
Other 
 non-underlying 
 items                                                                                                        (21) 
Operating profit                                                                                               751 
Net finance 
 expense                                                                                                      (66) 
Profit before 
 tax                                                                                                           685 
 
The Group's revenue from contracts with customers disaggregated 
 by segment, major product and service line, and timing of revenue 
 recognition for the year ended 31 December 2018 is shown below: 
 
Revenue from external customers 
 
                                                        Post 
                                                       Trade 
                                                    Services 
                                             Post     - CC&G 
                                            Trade        and 
                  Information            Services      Monte     Capital  Technology 
                     Services               - LCH     Titoli     Markets    Services         Other         Group 
                         GBPm                GBPm       GBPm        GBPm        GBPm          GBPm          GBPm 
Major product & 
service 
lines 
 
FTSE Russell 
 Indexes 
 - subscription           373                   -          -           -           -             -           373 
FTSE Russell 
 Indexes 
 - asset based            219                   -          -           -           -             -           219 
Real time data             94                   -          -           -           -             -            94 
Other 
 information 
 services                 155                   -          -           -           -             -           155 
Clearing                    -                 487         41           -           -             -           528 
Settlement, 
 custody 
 and other                  -                   -         61           -           -             -            61 
Primary capital 
 markets                    -                   -          -         113           -             -           113 
Secondary 
 capital 
 markets - 
 equities                   -                   -          -         169           -             -           169 
Secondary 
 capital 
 markets - fixed 
 income, 
 derivatives and 
 other                      -                   -          -         125           -             -           125 
Capital markets 
 software 
 licences                   -                   -          -           -          65             -            65 
Other                       -                   -          -           -           -             9             9 
                                                   --------- 
Total revenue 
 from 
 contracts with 
 customers                841                 487        102         407          65             9         1,911 
 
Timing of 
revenue 
recognition 
Services 
 satisfied 
 at a point in 
 time                      45                 479         93         237           2             8           864 
Services 
 satisfied 
 over time                796                   8          9         170          63             1         1,047 
                                                   --------- 
Total revenue 
 from 
 contracts with 
 customers                841                 487        102         407          65             9         1,911 
31 December 2018 comparatives have been re-presented in line 
 with current year classification. 
 
 
 
5. Expenses by nature 
Expenses comprise the following: 
 
                                                                           2019  2018 
                                                                    Notes  GBPm  GBPm 
 
Employee costs                                                          6   529   510 
IT costs                                                                    146   136 
Short-term lease costs                                                        2     - 
Lease costs for low value items                                               2     - 
Other costs                                                                 163   193 
Foreign exchange gains                                                      (3)   (5) 
Underlying operating expenses before depreciation, 
 amortisation and impairment                                                839   834 
Non-underlying operating expenses before 
 depreciation, amortisation and impairment                              7   132    21 
Operating expenses before depreciation, amortisation 
 and impairment                                                             971   855 
Other costs include GBP49 million in relation to professional fees 
 (2018: GBP60 million). Previously property costs included within 
 other costs are now recognised as depreciation under IFRS 16 (note 
 2). 
 
6. Employee costs 
Employee costs comprise the following: 
                                                                     2019        2018 
                                                                     GBPm        GBPm 
Salaries and other benefits                                           397         387 
Social security costs                                                  71          62 
Pension costs                                                          26          25 
Share-based compensation                                               35          36 
Total                                                                 529         510 
 
Staff costs include the costs of contract staff who are not on 
 the payroll, but fulfil a similar role to employees. 
 
 
 
The average number of employees in the Group from total operations 
 was: 
                                                                        2019           2018 
UK                                                                     1,631          1,628 
USA                                                                      664            659 
Italy                                                                    643            612 
France                                                                   185            166 
Sri Lanka                                                              1,082          1,025 
Other                                                                    493            315 
Total                                                                  4,698          4,405 
Average staff numbers are calculated from the date of acquisition 
 for subsidiary companies acquired in the year and up to the date 
 of disposal for businesses disposed in the year. 
 
7. Non-underlying items 
 
                                                                              2019   2018 
                                                                        Note  GBPm   GBPm 
 
 
Amortisation and impairment of goodwill 
 and purchased intangible assets                                          12   195    159 
Transaction costs                                                               96      9 
Restructuring costs                                                             32      - 
Integration costs                                                                4     12 
Operating expenses before depreciation, 
 amortisation and impairment                                                   132     21 
 
Total affecting operating profit                                               327    180 
Non-underlying finance expense                                                  16      - 
 
Total affecting profit before tax                                              343    180 
 
Tax effect on items affecting profit before 
 tax 
Deferred tax on amortisation of purchased 
 intangible assets                                                            (31)   (33) 
Current tax on amortisation of purchased 
 intangible assets                                                            (11)   (11) 
Tax effect on other items                                                      (8)   (11) 
 
Total tax effect on items affecting profit 
 before tax                                                                   (50)   (55) 
 
Total non-underlying charge to income 
 statement                                                                     293    125 
 
 
 

During the year the Group incurred a GBP180 million (2018: GBP154 million) amortisation charge in relation to purchased intangible assets, which includes GBP25 million accelerated amortisation in relation to Mergent Inc. In the prior year GBP5 million expense was recognised in relation to written-off work in progress assets no longer required for development.

The Group impaired goodwill of GBP8 million and purchased intangible assets of GBP1 million in relation to Turquoise Global Holdings Ltd and the Group impaired goodwill of GBP6 million in relation to Mergent Inc (note 12).

Transaction costs comprise charges incurred for services relating to potential merger and acquisition transactions.

Restructuring costs comprise one-off implementation costs arising from the cost savings programme announced in March 2019.

Integration costs in the current and prior year relate to the activities to integrate the Mergent and Yield Book businesses into the Group.

Financing costs relate to fees for establishing a Bridge Financing to refinance the Refinitiv notes and term loans in full following completion of its proposed acquisition. Further details of the facility are provided in note 14.

 
8. Net finance expense 
 
                                                                  2019   2018 
                                                                  GBPm   GBPm 
Finance income 
Expected return on defined benefit 
 pension scheme assets                                               1      1 
Bank deposit and other interest income                               9      8 
Other finance income                                                 4      4 
Underlying finance income                                           14     13 
 
Finance expense 
Interest payable on bank and other 
 borrowings                                                       (73)   (72) 
Defined benefit pension scheme interest 
 cost                                                                -    (1) 
Lease interest payable                                             (4)      - 
Other finance expenses                                             (8)    (6) 
Underlying finance expense                                        (85)   (79) 
Non-underlying                                                    (16)      - 
Net finance expense                                               (87)   (66) 
 
Bank deposits and other income includes negative interest earned 
 on the Group's borrowings. Interest payable includes amounts where 
 the Group earns negative interest on its cash deposits. 
Other finance income includes amounts relating to the unwind of 
 discount on net investments in leases. These amounts are immaterial. 
 
During the year the Group recognised a total of GBP72 million (2018: 
 GBP66 million) of net interest expense on financial assets and 
 financial liabilities held at amortised cost, comprising GBP13 
 million (2018: GBP12 million) gross finance income and GBP85 million 
 (2018: GBP78 million) gross finance expense. Presented within finance 
 income and finance expense are amounts in relation to defined benefit 
 pension schemes which are measured at fair value. 
 
 
9. Taxation 
 
The standard UK corporation tax rate for the year 
 was 19% (2018: 19%). 
                                                                           2019     2018 
Taxation charged to the income statement                                   GBPm     GBPm 
 
Current tax: 
UK corporation tax for the year                                              84       53 
Overseas tax for the year                                                   134      107 
Adjustments in respect of previous 
 years                                                                      (3)     (12) 
 
                                                                            215      148 
Deferred tax: 
Deferred tax for the year                                                     2       15 
Adjustments in respect of previous 
 years                                                                        -        2 
Deferred tax on amortisation of purchased intangible 
 assets                                                                    (31)     (33) 
                                                                           (29)     (16) 
Total taxation charge                                                       186      132 
The adjustments in respect of previous years' corporation tax are 
 mainly in respect of tax returns submitted to relevant tax authorities. 
                                                                           2019       2018 
Taxation on items not recognised in the 
 income statement                                                          GBPm       GBPm 
Current tax credit: 
Tax allowance on share awards in excess 
 of expense recognised                                                        7          5 
 
                                                                              7          5 
Deferred tax (charge)/credit: 
Tax on defined benefit pension scheme remeasurement                         (2)          5 
Adjustments relating to change in defined 
 benefit pension tax rate                                                     2          - 
Tax allowance on share options/awards in 
 excess of expense recognised                                                10          2 
Tax on movement in value of investments 
 in financial assets                                                        (5)          4 
                                                                             12         16 
Factors affecting the tax charge for the 
 year 
The income statement tax charge for the year differs from the standard 
 rate of corporation tax in the UK of 19% (2018: 19%) as explained 
 below: 
                                                                           2019       2018 
                                                                           GBPm       GBPm 
Profit before tax                                                           651        685 
 
Profit multiplied by standard rate of corporation 
 tax in the UK                                                              124        130 
Expenses not deductible/(income not taxable)                                  9        (7) 
Adjustment arising from change in tax rates                                   7          - 
Overseas earnings taxed at higher rate                                       38         25 
Adjustments in respect of previous years                                    (3)       (10) 
Adjustment arising from changes in tax rates 
 on amortisation of purchased intangible 
 assets                                                                       4        (2) 
Deferred tax provided for withholding tax 
 on distributable reserves                                                    2          - 
Derecognition of deferred tax                                                 5        (4) 
Taxation                                                                    186        132 
 
 

The UK Finance Bill 2016 was enacted in September 2016, reducing the standard rate of corporation tax to 17% effective from 1 April 2020. Accordingly, the UK deferred tax balances at December 2019 have been stated at the rate dependent on when the temporary differences are expected to reverse. The deferred tax balances in other countries are recognised at the substantively enacted rates at the balance sheet date.

Uncertain tax positions

EU State Aid

The Group continues to monitor developments in relation to EU State Aid investigations. On 25 April 2019, the EU Commission's final decision regarding its investigation into the UK's Controlled Foreign Company (CFC) regime was published. It concludes that the legislation up until December 2018 does partially represent State Aid.

Both the Group and the UK Government, among a number of other UK PLCs, have since submitted appeals to the EU general court to annul the EU Commission's findings.

The UK Government are required to commence the process of recovering the State Aid while the decision is under appeal, issuing their first round of determinations in December 2019 focusing on the financial year 2015 due to the expiry of certain time limits.

The Group received a determination in respect of one of its two affected subsidiaries for GBP1 million, which was both paid by the Group and appealed against separately to HMRC in January 2020. The appeal against the determination to HMRC is likely to stay until the conclusion of the appeals to the EU general court to annul the original EU Commission's decision.

Considering the appeals made by the UK PLCs (including the Group), UK Government, and management's internal view, the Group does not consider any provision is required in relation to this investigation. Additionally, in accordance with the provisions of IFRIC 23 'Uncertainty over Income Tax Treatments' and IAS 12 'Income Taxes', the Group will recognise a receivable for the determination paid in January 2020.

As previously disclosed, the Group has made claims under the CFC legislation and considers that the potential amount of tax payable, excluding compound interest, remains between nil and GBP65 million.

Other

The Group does not have any other uncertain tax positions as at 31 December 2019 (2018: nil).

 
10. Earnings per share 
 
Earnings per share is presented on four bases: basic earnings per 
 share, diluted earnings per share, adjusted basic earnings per share, 
 and adjusted diluted earnings per share. Basic earnings per share 
 is in respect of all activities. Diluted earnings per share takes 
 into account the dilutive effects that would arise on conversion 
 or vesting of all outstanding share options and share awards under 
 the Group's share option and award schemes. Adjusted basic earnings 
 per share and adjusted diluted earnings per share exclude amortisation 
 of purchased intangible assets and non-underlying items to enable 
 a better comparison of the underlying earnings of the business with 
 prior periods. 
                                                                2019    2018 
Basic earnings per share                                      119.5p  138.3p 
Diluted earnings per share                                    118.1p  136.0p 
Adjusted basic earnings per share                             200.3p  173.8p 
Adjusted diluted earnings per share                           198.0p  170.8p 
 
Profit and adjusted profit for the year attributable to the Company's 
 equity holders: 
 
                                                                2019    2018 
                                                                GBPm    GBPm 
Profit for the financial year attributable to the 
 Company's equity holders                                        417     480 
 
Adjustments: 
Total non-underlying items (note 7)                              293     125 
Amortisation of purchased intangible assets, non-underlying 
 items and taxation attributable to non-controlling 
 interests                                                      (11)     (2) 
Adjusted profit for the year attributable to the 
 Company's equity holders                                        699     603 
 
Weighted average number of shares - millions                     349     347 
Effect of dilutive share options and awards - millions             4       6 
Diluted weighted average number of shares - millions             353     353 
 
The weighted average number of shares excludes those held in the 
 Employee Benefit Trust and treasury shares held by the Group. 
 
 
11. Dividends 
 
                                                 2019  2018 
                                                 GBPm  GBPm 
Final dividend for 31 December 2017 paid 30 
 May 2018: 37.2p per Ordinary share                 -   129 
Interim dividend for 31 December 2018 paid 
 18 September 2018: 17.2p per Ordinary share        -    60 
Final dividend for 31 December 2018 paid 29 
 May 2019: 43.2p per Ordinary share               151     - 
Interim dividend for 31 December 2019 paid 
 17 September 2019: 20.1p per Ordinary share       70     - 
                                                  221   189 
 

Dividends are only paid out of available distributable reserves.

The Board has proposed a final dividend in respect of the year ended 31 December 2019 of 49.9p per share, which is estimated to amount to an expected payment of GBP174 million in May 2020. This is not reflected in the financial statements.

 
12. Intangible assets 
                                               Purchased intangible assets 
                                                                        Software, 
                                              Customer                   licences 
                                          and supplier           and intellectual    Software 
                              Goodwill   relationships  Brands           property   and other  Total 
Cost:                             GBPm            GBPm    GBPm               GBPm        GBPm   GBPm 
31 December 2017                 2,377           1,848     960                584         678  6,447 
Additions                            -               -       -                  -         187    187 
Disposals                            -             (6)       -               (14)         (4)   (24) 
Transfer of asset                    -               -       -                  -           3      3 
Write-off                            -               -       -                  -         (5)    (5) 
Foreign exchange                    70              50      45                 12          13    190 
31 December 2018                 2,447           1,892   1,005                582         872  6,798 
Acquisition of subsidiaries         14               -       -                  -           -     14 
Additions                            -               -       -                  -         206    206 
Disposals and write-off              -             (2)     (1)                (2)        (16)   (21) 
Foreign exchange                 (104)            (64)    (24)               (12)        (39)  (243) 
31 December 2019                 2,357           1,826     980                568       1,023  6,754 
 
Accumulated amortisation and 
 impairment: 
31 December 2017                   521             566     151                291         317  1,846 
Amortisation charge 
 for the year                        -              91      39                 24         102    256 
Impairment                           -               -       -                  -           1      1 
Disposals                            -             (6)       -               (14)         (4)   (24) 
Write-off                            -               -       -                  -         (1)    (1) 
Foreign exchange                     7              11       7                  3           5     33 
31 December 2018                   528             662     197                304         420  2,111 
Amortisation charge 
 for the year                        -             117      41                 22         123    303 
Impairment                          14               1       -                  -           9     24 
Disposals and write-off              -             (2)     (1)                (2)        (14)   (19) 
Foreign exchange                  (27)            (26)     (5)                (6)        (22)   (86) 
31 December 2019                   515             752     232                318         516  2,333 
Net book values: 
31 December 2019                 1,842           1,074     748                250         507  4,421 
31 December 2018                 1,919           1,230     808                278         452  4,687 
 
 

Goodwill

On 31 May 2019, the Group acquired Beyond Ratings SAS ("Beyond Ratings"), which resulted in additions to goodwill of GBP14 million (note 19).

The goodwill arising on consolidation represents the growth potential and assembled workforces of the Italian Group, LCH Group, FTSE Group, MillenniumIT, the US Information Services Group and Turquoise.

During the year an impairment has been recognised in relation to Turquoise Global Holdings Ltd due to uncertainties in the underlying future cash flows resulting in an impairment of GBP8 million in goodwill.

An impairment has been recognised in relation to Mergent due to lower forecast cash flows, driven by revenue performance below expectations set at the time of acquisition. This has resulted in an impairment of GBP6 million in goodwill.

Purchased intangible assets

The fair values of the purchased intangible assets were principally valued using discounted cash flow methodologies and are being amortised over their useful economic lives, which do not normally exceed 25 years. The Group's purchased intangible assets include:

Customer and supplier relationships

These assets have been recognised on acquisition of major subsidiary companies by the Group. The amortisation periods remaining on these assets are between 7 to 23 years. Following a reassessment of useful economic lives the Group has recognised a GBP25 million acceleration of amortisation charge in the year.

Brands

Brands have been recognised in a number of major acquisitions, including FTSE, LCH, Russell and Yield Book. Included within brands are trade names relating to the acquisition of Frank Russell Group of GBP538 million (2018: GBP583 million). The remaining amortisation period on these assets are between 3 to 23 years.

Software, licences and intellectual property

These assets have been recognised on acquisition of subsidiary companies and have a remaining amortisation period of 2 to 18 years.

There are no other individual purchased intangible assets with a carrying value that is considered material to each asset class.

Following a review of purchased intangible assets no longer in use, the Group disposed of assets with costs of GBP2 million of customer relationships, GBP1 million of brands and GBP2m of software licences, all with a nil net book value.

Impairment tests for purchased intangible assets

Turquoise

An impairment of GBP1 million has been recognised in relation to Customer and Supplier Relationships which represents the recurring source of income from customers' existing at the time of acquisition. The impaired asset belongs to the Capital Markets reportable segment.

The recoverable amount has been determined based on a value in use calculation using cash flow projections from financial budgets and forecasts approved by senior management covering a three year period. The pre tax discount rate applied to cash flow projections is 8.8% (2018: 9.7%) and cash flows beyond the three-year period are extrapolated using a 3.4% growth rate (2018: 3.5%). The projected cash flows have been impacted by weaker demand in the 'lit' trading book, coupled with increased costs of additional investment in information technology to support the business. This has resulted in the carrying value exceeding the value in use and the Group has recognised an impairment of GBP1 million in the current year taking the carrying value to nil.

Software and other

As a part of the business operating model the Group develops technology solutions where software products are developed internally, for use within the Group or to sell externally. The cost of self-developed software products in the year includes GBP100 million ( 2018 : GBP133 million) representing assets not yet brought into use. No amortisation has been charged on these assets and instead they are tested for impairment annually.

During the year, additions relating to internally generated software amounted to GBP176 million ( 2018 : GBP175 million). Research expenditure of GBP16 million (2018: GBP4 million) has been recognised in the income statement in the year.

Other amounts represent the internally built and developed trading systems within the various business lines, licences, capitalised contract costs and right-of-use assets. In general, these assets have a useful economic life of up to 7 years.

During the year, the Group capitalised GBP9 million (2018: GBP10 million) of incremental contract costs in respect of revenue generating contracts with customers and recognised a GBP7 million (2018: GBP6 million) amortisation charge relating to contract cost assets. No impairment was recognised in the year (2018: nil) in relation to contract cost assets.

Previously, the Group recognised licences held under finance leases with a carrying value of GBP6 million at 2018 . On 1 January 2019, the Group adopted IFRS 16 (note 2) and these assets are now included with other right-of-use assets within 'software and other'. During the year the Group recognised additions of GBP21 million of right-of-use assets, with a corresponding amortisation charge of GBP7 million.

Following a review of software assets in the year the Group recognised GBP9 million impairment in relation to assets no longer in use.

During the year the Group recognised disposals and write-offs of assets no longer in use with a cost of GBP16 million, comprising GBP14 million nil net book value assets and GBP2 million of assets not yet brought into use.

 
13. Financial assets and financial liabilities 
 
  Financial instruments by category 
The financial instruments of the Group are categorised as follows: 
 
Financial assets 
                                                    Financial       Financial 
                                                       assets     instruments 
                                     Financial        at fair         at fair 
                                        assets          value   value through 
                                  at amortised        through          profit 
                                          cost            OCI         or loss    Total 
31 December 2019                          GBPm           GBPm            GBPm     GBPm 
 
Clearing member financial 
assets: 
- Clearing member trading 
 assets                                122,299              -         574,889  697,188 
- Other receivables from 
 clearing 
 members                                 8,330              -               -    8,330 
- Other financial assets                     -         23,576               -   23,576 
- Clearing member cash and cash 
 equivalents                            67,118              -               -   67,118 
Clearing member business assets        197,747         23,576         574,889  796,212 
 
Trade and other receivables                521              -               5      526 
Cash and cash equivalents                1,493              -               -    1,493 
Investments in financial assets 
 - debt instruments                          -            106               -      106 
Investments in financial assets 
 - equity instruments                        -            241               -      241 
Derivative financial 
 instruments                                 -              -               2        2 
 
Total                                  199,761         23,923         574,896  798,580 
 
There were no transfers between categories during the year. 
Prepayments and contract assets within trade and other receivables 
 are not classified as financial instruments. 
The Group no longer recognises bonds with less than three months 
 maturity as cash and cash equivalents. They remain within investments 
 in financial assets - debt. 
Financial liabilities 
                                                                    Financial 
                                                                  liabilities 
                                                                      at fair 
                                                    Financial           value 
                                                  liabilities         through 
                                                 at amortised          profit 
                                                         cost        and loss    Total 
31 December 2019                                         GBPm            GBPm     GBPm 
 
Clearing member financial liabilities: 
- Clearing member trading liabilities                 122,299         574,889  697,188 
- Other payables to clearing members                   98,914               -   98,914 
Clearing member business liabilities                  221,213         574,889  796,102 
 
Trade and other payables                                  747               -      747 
Borrowings                                              2,085               -    2,085 
Derivative financial instruments                            -              40       40 
 
Total                                                 224,045         574,929  798,974 
 
There were no transfers between categories during the year. 
Social security and other tax liabilities within trade and other 
 payables, and contract liabilities are not classified as financial 
 instruments. 
 
The financial instruments of the Group at the previous year's balance 
 sheet date were as follows: 
 
Financial assets 
                                                                    Financial 
                                                    Financial     instruments 
                                                       assets         at fair 
                                     Financial        at fair           value 
                                        assets          value         through 
                                  at amortised        through          profit 
                                          cost            OCI         or loss       Total 
31 December 2018                          GBPm           GBPm            GBPm        GBPm 
 
Clearing member financial 
assets: 
- Clearing member trading 
 assets                                138,153              -         604,303     742,456 
- Other receivables from 
 clearing members                        2,261              -               -       2,261 
- Other financial assets                     -         19,694               -      19,694 
- Clearing member cash and cash 
 equivalents                            70,927              -               -      70,927 
Clearing member business assets        211,341         19,694         604,303     835,338 
 
Trade and other receivables                761              -               -         761 
Cash and cash equivalents                1,510              -               -       1,510 
Investments in financial assets 
 - debt 
 instruments                                 -             84               -          84 
 
Total                                  213,612         19,778         604,303     837,693 
 
Prepayments and contract assets within trade and other receivables 
 are not classified as financial instruments. 
Contract assets that have been reclassified as fees receivable 
 are included within trade and other receivables. 
Financial liabilities 
                                                                    Financial 
                                                                  liabilities 
                                                                      at fair 
                                                    Financial           value 
                                                  liabilities         through 
                                                 at amortised          profit 
                                                         cost         or loss    Total 
31 December 2018                                         GBPm            GBPm     GBPm 
 
Clearing member financial 
 liabilities: 
- Clearing member trading 
 liabilities                                          138,153         604,303  742,456 
- Other payables to 
 clearing members                                      93,052               -   93,052 
Clearing member business 
 liabilities                                          231,205         604,303  835,508 
 
Trade and other payables                                  510              10      520 
Borrowings                                              2,203               -    2,203 
Derivative financial 
 instruments                                                -              47       47 
 
Total                                                 233,918         604,360  838,278 
 
Social security and other tax liabilities within trade and other 
 payables are not classified as financial instruments. 
 
14. Borrowings 
 
                                                                         2019     2018 
                                                                         GBPm     GBPm 
Current 
Bank borrowings                                                           256       41 
Commercial paper                                                          256      270 
Bonds                                                                       -      250 
                                                                          512      561 
 
Non-current 
Bonds                                                                   1,573    1,642 
                                                                        1,573    1,642 
 
Total                                                                   2,085    2,203 
 
 
 
The Group has the following committed bank facilities and unsecured 
 notes: 
                                                                                Interest rate 
                                                                Carrying value     percentage 
                                                                            at             at 
                                  Expiry                           31 December    31 December 
                                   date         Notes/facility            2019           2019 
Type                                                      GBPm            GBPm              % 
Drawn value of Facilities 
Dual-currency bridge facility     Jan 2022(1)           10,167             (8)    LIBOR + 0.3 
Multi-currency revolving credit 
 facility                         Nov 2022                 600             115   LIBOR + 0.45 
Multi-currency revolving credit 
 facility                         Dec 2024                 600             149    LIBOR + 0.3 
Total committed bank facilities                                            256 
 
Commercial paper                  Jan 2020                 256             256        (0.330)  (2) 
 
GBP300 million bond, issued 
 November 2012                    Nov 2021                 300             299          4.750 
EUR500 million bond, issued 
 September 2017                   Sep 2024                 427             426          0.875 
EUR500 million bond, issued 
 December 2018                    Dec 2027                 427             424          1.750 
EUR500 million bond, issued 
 September 2017                   Sep 2029                 427             424          1.750 
Total bonds                                                              1,573 
Total committed facilities 
 and unsecured notes                                                     2,085 
(1) Terminates 12 months after the earlier of Refinitiv business 
 acquisition or the end of January 2022. 
(2) The Commercial paper interest rate reflected is the average 
 interest rate achieved on the outstanding issuances. 
 

Current borrowings

The Group retained total committed revolving credit bank facilities of GBP1,200 million during the financial year. The final one year extension option on the five year GBP600 million facility arranged in December 2017 was taken up to push the final maturity out to December 2024. In August 2019 the Group arranged a Bridge Facility comprising tranches of US$9.325 billion and EUR3.58 billion. The revolving credit facilities were partially drawn at 31 December 2019 and the Bridge Facility remained undrawn, with total facilities carrying value of GBP256 million (2018: GBP41 million) which includes GBP10 million of deferred arrangement fees (2018: GBP2 million). Further details of the Bridge Facility arrangement fees amortised to the income statements are provided in note 7.

The Group maintained its GBP1 billion Euro Commercial Paper Programme. Outstanding issuances at 31 December 2019 of EUR300 million (GBP256 million) (2018: of EUR300 million (GBP270 million)) may be reissued upon maturity in line with the Group's liquidity requirements.

In October 2019, the Company redeemed the 2009 GBP250 million unsecured bond using funding drawn from its bank credit facilities. The issue price of the bond was GBP99.548 per GBP100 nominal. The coupon on the bond was dependent on the Company's credit ratings with Moody's and Standard & Poor's, which were unchanged at A3 and A- respectively. The bond coupon remained at 9.125% per annum for the period outstanding.

Cassa di Compensazione e Garanzia S.p.A. (CC&G) has direct intra-day access to refinancing with the Bank of Italy to cover its operational liquidity requirements in the event of a market stress or participant failure. In addition, it has arranged commercial bank back-up credit lines with a number of commercial banks, which total EUR420 million at 31 December 2019 (2018: EUR420 million), for overnight and longer durations to broaden its liquidity resources consistent with requirements under the European Markets Infrastructure Regulation (EMIR).

LCH SA has a French banking licence and is able to access refinancing at the European Central Bank to support its liquidity position. LCH Limited is deemed to have sufficient fungible liquid assets to maintain an appropriate liquidity position, and has direct access to certain central bank facilities to support its liquidity risk management in accordance with the requirements under the EMIR. In accordance with the Committee on Payments and Market Infrastructures (CPMI), International Organization of Securities Commissions (IOSCO) and Principles for Financial Market Infrastructures (PFMIs), many Central Banks now provide for CCPs to apply for access to certain Central Bank facilities.

In addition, a number of Group entities have access to uncommitted operational, money market and overdraft facilities which support post trade activities and day-to-day liquidity requirements across its operations.

Non-current borrowings

In November 2012, the Company issued a GBP300 million bond under its Euro Medium Term Notes Programme (launched at the same time) which is unsecured and is due for repayment in November 2021. Interest is paid semi-annually in arrears in May and November each year. The issue price of the bond was GBP100 per GBP100 nominal. The coupon on the bond is fixed at 4.75% per annum.

In September 2017, the Company issued EUR1 billion of bonds in two EUR500 million (GBP427 million) tranches under its updated Euro Medium Term Notes Programme. The bonds are unsecured and the tranches are due for repayment in September 2024 and September 2029 respectively. Interest is paid annually in arrears in September each year. The issue prices of the bonds were EUR99.602 per EUR100 nominal for the 2024 tranche and EUR99.507 per EUR100 nominal for the 2029 tranche. The coupon on the respective tranches is fixed at 0.875% per annum and 1.75% per annum respectively.

In December 2018, the Company issued a EUR500 million (GBP427 million) bond under its updated Euro Medium Term Notes Programme. The bond is unsecured and due for repayment in December 2027. Interest is paid annually in arrears in December each year. The issue price was EUR99.547 per EUR100 nominal. The coupon on the bond is fixed at 1.75% per annum.

 
Fair values 
The fair values of the Group's 
 borrowings are as follows: 
                                            2019                  2018 
                                    Carrying              Carrying 
                                       value  Fair value     value  Fair value 
                                        GBPm        GBPm      GBPm        GBPm 
Borrowings 
 - within 1 year                         512         512       561         561 
 - after more than 
  1 year                               1,573       1,676     1,642       1,914 
 
                                       2,085       2,188     2,203       2,475 
   ------------------------------- 
 

Bonds are classified as Level 1 in the Group's hierarchy for determining and disclosing the fair value of financial instruments. Bond fair values are as quoted in the relevant fixed income markets.

Bank borrowings and commercial paper are classified as Level 2 in the Group's hierarchy for determining and disclosing the fair value of financial instruments. The fair values of these instruments are based on discounted cash flows using a rate based on borrowing cost. Bank borrowings bear interest at an appropriate inter-bank reference rate plus and agreed margin, and commercial paper attracts interest at a negotiated rate at the time of issuance.

 
The carrying amounts of the Group's borrowings are 
 denominated in the following currencies: 
                                            2019                            2018 
                                      Drawn  Swapped   Effective  Drawn  Swapped  Effective 
Currency                               GBPm     GBPm        GBPm   GBPm     GBPm       GBPm 
Sterling                                420        -         420    572    (270)        302 
Euro                                  1,557    (637)         920  1,631    (361)      1,270 
US dollar                               108      637         745      -      631        631 
Total                                 2,085        -       2,085  2,203        -      2,203 
15. Analysis of net debt 
Group net debt includes interest bearing loans and borrowings and 
 derivative financial instruments less cash and cash equivalents. 
 
                                                                            2019       2018 
                                                                            GBPm       GBPm 
Due within 1 year 
Cash and cash equivalents                                                  1,493      1,510 
Bank borrowings                                                            (256)       (41) 
Commercial paper                                                           (256)      (270) 
Bonds                                                                          -      (250) 
Derivative financial assets                                                    2          - 
Derivative financial liabilities                                             (1)       (30) 
                                                                             982        919 
Due after 1 year 
Bonds                                                                    (1,573)    (1,642) 
Derivative financial liabilities                                            (39)       (17) 
Total net debt                                                             (630)      (740) 
 
Reconciliation of net cash flow to movement in net debt 
 
                                                                            2019       2018 
                                                                            GBPm       GBPm 
Increase in cash in the year                                                  57         84 
Bond issue proceeds                                                            -      (445) 
Commercial paper issuance                                                      -      (255) 
Additional drawdowns from 
 bank credit facilities                                                    (261)          - 
Net repayments made towards 
 bank credit facilities                                                       35        489 
Repayment of bonds                                                           250          - 
Change in net debt resulting 
 from cash flows                                                              81      (127) 
 
Foreign exchange                                                              14          4 
Movement on derivative financial 
 assets and liabilities                                                        9       (22) 
Bond valuation adjustment                                                    (2)          3 
Movement in bank credit facility 
 arrangement fees                                                              8        (1) 
Net debt at the start of the 
 year                                                                      (740)      (597) 
Net debt at the end of the 
 year                                                                      (630)      (740) 
 
 
 
16. Share capital and share premium 
 
 
Ordinary shares issued and fully paid 
                                       Number 
                                           of  Ordinary          Share 
                                       shares    shares  (1)   premium  Total 
                                     millions      GBPm           GBPm   GBPm 
 
 
1 January 2018                            350        24            964    988 
Issue of shares to the Employee 
 Benefit Trust                              1         -              1      1 
 
31 December 2018                          351        24            965    989 
Issue of shares to the Employee 
 Benefit Trust                              -         -              2      2 
 
31 December 2019                          351        24            967    991 
 
 

(1) Ordinary Shares of 6 (79/86) pence

The Board approved the allotment and issue of 68,020 ordinary shares of par value 6 (79/86) pence at a weighted average exercise price of 2,238 pence to the Employee Benefit Trust ( 2018 : 72,763 ordinary shares of par value 6 (79/86) pence at 2,042 pence), to settle employee 'Save As You Earn' share plans. This generated a premium of GBP2 million ( 2018 : GBP1 million).

The Ordinary Share Capital of 351 million shares is shown net of 1 million treasury shares, recorded at par.

 
17. Net cash flow generated from operations 
 
 
 
                                                                      2019       2018 
                                                           Notes      GBPm       GBPm 
Profit before tax                                                      651        685 
 
Adjustments for depreciation, amortisation and 
 impairments: 
Depreciation and amortisation                                          369        287 
Impairment of software and intangible assets                            24          5 
Impairment of property, plant and equipment                              2          2 
 
Adjustments for other non-cash items: 
Loss on disposal of intangible assets                                    2          - 
Share of loss of associates                                              7          8 
Net finance expense                                             8       87         66 
Share scheme expense                                            6       35         36 
Royalties                                                                1          3 
Movement in pensions and provisions                                    (2)       (19) 
Net foreign exchange differences                                      (27)         30 
Research and development tax credit                                    (1)          - 
 
Decrease/(increase) in receivables and contract 
 assets                                                                203      (107) 
Increase in payables and contract liabilities                           37          3 
 
Movement in other assets and liabilities relating 
 to operations: 
Decrease/(increase) in clearing member financial 
 assets                                                              6,525  (101,678) 
(Decrease)/increase in clearing member financial 
 liabilities                                                       (6,796)    101,646 
Movement in derivative assets and liabilities 
 (1)                                                                  (28)          2 
 
Cash generated from operations                                       1,089        969 
 
(1) Movement in derivative assets and liabilities includes GBP10 
 million relating to the Group's exercise of its option to purchase 
 the remaining interest in Euro TLX SIM S.p.A, a subsidiary of the 
 Group and GBP1 million from the revaluation of the derivative option 
 attached to the convertible loan to Nivaura Limited. 
 
 

18. Commitments and contingencies

The Group has no contracted capital commitments or any other commitments not provided for in the financial

statements as at 31 December 2019   ( 2018 : nil). 

In the normal course of business, the Group receives legal claims in respect of commercial, employment and other matters. Where a claim is more likely than not to result in an economic outflow of benefits from the Group, a provision is made representing the expected cost of settling such claims.

19. Business combinations

Acquisitions in the year to 31 December 2019

On 31 May 2019, the Group acquired 100% of Beyond Ratings SAS (Beyond Ratings), a provider of financial analysis that includes Environmental, Social and Governance criteria based in France. The consideration of GBP14 million (EUR15 million) cash was paid in two instalments during the year.

The provisional fair value of the net assets acquired was nil, including fixed assets of GBP1 million, current assets of GBP1 million and liabilities of GBP2 million. The fair value of assets acquired will be finalised within 12 months of acquisition. There were no purchased intangible assets. The Group provisionally recognised GBP14 million in goodwill which represents the potential growth of future income streams expected as the Beyond Ratings business is highly complementary to the Group's analytics tools and the index and data products.

The post-acquisition revenues and operating profit from the continuing operations of Beyond Ratings were not material to the Group. If the acquisition had taken place at the beginning of the year there would have been no material effect on the Group.

Acquisition related costs incurred have been recognised in the income statement during the year, but were immaterial.

Acquisitions in the year to 31 December 2018

There were no acquisitions in the year ended 31 December 2018 .

20. Events after the reporting period

In January 2020 the Group created a Post Trade Division. The division will include LCH Group and the post trade businesses in Italy, Monte Titoli and CC&G, which are currently reported separately as part of our financial results. The Post Trade division will also include UnaVista, the trade reporting business that currently sits in the Information Services Division.

The Group will disclose segmental information for the Post Trade Division in future financial reporting.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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