Ukraine conflict impacts London Stock Exchange’s revenue, shares fall

The conflict in Ukraine is hurting the London Stock Exchange Group’s revenue, but the bourse said it was on track to reach financial expectations from the $27 billion acquisition of data and analytics firm Refinitiv.

 

LSEG reported a 6.3 percent increase in first-quarter overall income, with strong growth across all divisions, and a 6.8 percent increase after accounting for the group’s measures in response to Russia’s invasion of Ukraine, which resulted in the exchange suspending trading in its Russian listings.

 

The exchange also discontinued the distribution of news and commentary in Russia and suspended all products and services for Russian consumers.

 

Citi analysts said the bank’s estimated gross profit of 1.6 billion pounds was met, calling the findings ‘generally a respectable set of results.’

 

‘At a group level, revenue attrition in Russia/Ukraine is expected to be around 60 million pounds in 2022,’ Citi stated, ‘the great majority of which will be realised in data & analytics.’

 

In January 2021, LSEG purchased Refinitiv, transforming it into a major data player, but the move sparked fears among investors that it had taken on too much, especially after outages.

 

Since then, concerns have calmed as LSEG has made headway in integrating the new company and fulfilling savings targets, but its stock is still trading at a discount to pre-acquisition levels, down 2.5 percent at 0750 GMT.

 

LSEG said on Wednesday that by the end of March, it had achieved 25 million pounds ($31 million) in ‘run rate’ revenue synergies and that it was ‘on course to exceed all financial targets.’

 

‘The Group’s strength and high-quality recurring revenues reflect our capacity to invest for development, make strategic acquisitions, and return cash to shareholders,’ LSEG Chief Executive David Schwimmer said in a statement.

 

‘The group is in a strong position, and we expect to make even more progress in the second half of 2022,’ he continued.

 

The net revenues from LSEG’s $1.1 billion disposal of its wealth back office subsidiary BETA+ will be returned to shareholders through a share buyback, which is expected to begin in the third quarter of this year.