--LSE's revenue and Ebitda increased in 2020, but were worse than expected

--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 pence.

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 brings.

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 joseph.hoppe@wsj.com

 

(END) Dow Jones Newswires

March 05, 2021 08:05 ET (13:05 GMT)

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