London Stock Exchange Group Shares Drop After 2020 Earnings Miss Forecasts -- Update
--LSE's revenue and Ebitda increased in 2020, but were worse
--The company expects underlying operating costs to climb in
2021 on Refinitiv acquisition and higher investment
--LSE said integration of Refinitiv going well, sale of Borsa
Italiana expected to wrap up in 1H
By Joe Hoppe
Shares in London Stock Exchange Group PLC fell Friday after the
company's earnings for 2020 undershot market expectations, though
rose over the previous year.
Shares at 1248 GMT were down 1,134 pence, or 12% at 8,354
The stock-exchange and financial-information company posted a
pretax profit of 685 million pounds ($951.7 million), up from
GBP651 million a year before.
Total revenue rose to GBP2.12 billion from GBP2.06 billion a
year prior. The company said the rise in revenue was driven in
particular by growth in its information services and its post trade
services divisions, offsetting a slight slip in technology services
revenue. This missed a consensus forecast of GBP2.36 billion, based
on 10 analyst estimates, provided by FactSet.
Adjusted earnings before interest, taxes, depreciation and
amortization--a metric that strips out exceptional and other
one-off items--rose to GBP1.33 billion from GBP1.27 billion a year
before, missing market consensus by 1%.
The company proposed a final dividend of 51.7 pence a share,
bringing the total full-year dividend up 7% to 75.0 pence.
LSE completed the acquisition of Refinitiv in January, and said
early work integrating the financial data company has confirmed the
quality of the business and the extent of new opportunities that it
The company said it expects underlying operating costs to
increase by mid-single digits in 2021 after taking into account the
acquisition of Refinitiv and reflecting increased levels of
investment. Capital expenditure in the year is expected to reach
GBP850 million, the company said. Commenting on the cost guidance,
U.S. bank Citi said it "appears heavier than expected."
Meanwhile, the disposal of Italian exchange operator, Borsa
Italiana Group, for GBP3.9 billion is expected to complete in the
first half of the year, LSE said.
Write to Joe Hoppe at firstname.lastname@example.org
(END) Dow Jones Newswires
March 05, 2021 08:05 ET (13:05 GMT)
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