London Stock Exchange Group (LSEG), operator of the UK's main stock exchange, reported an 11.9% increase in total income for the first half of 2022 to £4.179 billion. Despite the revenue growth, which is expected to be near the top end of its 6-8% guidance range for the full year, the company's share price dropped 5.3% on Thursday.
The company said growth in its data and analytics division was 7.6% in the first half, signaling that the integration of data company Refinitiv, acquired for $27 billion in 2021, is progressing on track. Data and analytics makes up the bulk of LSEG's income. CEO David Schwimmer noted that the segment is "growing faster than it has for many years."
However, basic earnings per share fell 21.2% to 77.2p due to a higher effective tax rate. Profit before tax declined 17.6% to £662 million, though interim dividends per share rose 12.6% to 35.7p
Total income excluding recoveries increased 7.9% to £3.99 billion, while adjusted operating profit rose 4.1% to £1.41 billion.
Schwimmer mentioned that LSEG's "transformational strategic partnership" with Microsoft, which recently announced plans to acquire a 4% stake in LSEG for $2 billion, is progressing and customers will start seeing benefits next year. The partnership will make LSEG's data and analytics available through Microsoft Teams.
Despite the progress, investor sentiment appears to have been impacted by wider macroeconomic concerns. LSEG's share price decline on the back of the earnings highlights market uncertainty, outweighing the positive growth metrics reported.
