London Stock Exchange says Refinitiv costs and savings on track

By Huw Jones

LONDON (Reuters) -London Stock Exchange Group's (LSEG) cost and savings targets for integration of data company Refinitiv are on track, it said after half-year results and the launch of a larger than expected 750 million pound ($911 million) share buyback.

Investors are closely monitoring the integration of Refinitiv, which LSEG bought for $27 billion in 2021, after outages and concerns among some of them over the amount of money being spent to mesh two different cultures and systems.

"We are managing costs well and we continue to make progress on achievement of synergies," LSEG Chief Executive David Schwimmer said in the company's half-year results statement.

Shares in LSEG were up 2.5% by 0830 GMT.

LSEG's Refinitiv purchase has transformed the 300-year-old London exchange into a group for which financial market data and analytics are larger than all its other business lines combined, pitting it against the likes of data leader Bloomberg and S&P Global.

The integration has involved internal personnel changes, including LSEG's head of data, Andrea Remyn Stone, stepping down in June after only a year in the job, with her role temporarily taken over by Schwimmer.

"We are successfully executing on our strategy, have good momentum going into the second half and our targets remain unchanged," Schwimmer said.

There was a sharp drop in London Stock Exchange listings in the first half, owing to economic uncertainty caused by the war in Ukraine, but Schwimmer said there was a "healthy pipeline" of IPOs waiting for markets to settle down.

INCOME GROWTH

LSEG reported a gross profit of 3.231 billion pounds, slightly above an analysts' consensus of 3.229 billion pounds. Adjusted basic earnings per share were 167.4 pence, above the 149.6 pence expected by analysts.

"We generate a lot of cash," Schwimmer said.

LSEG reported strong income growth across all divisions, with pro-forma total income, excluding recoveries, up 6.2% on the same period last year.

"A small beat and we are reassured by the unchanged cost outlook commentary," Citi analysts said in a note.

Wealth Club said that modernisation of Refinitiv’s legacy technology will be a multi-year process.

"However, If LSE can pull off the integration, investors could be richly rewarded," said Charlie Huggins, head of equities at the research provider to high net worth investors.

LSEG will pay an interim dividend of 31.7 pence per share, up 27% on the same period last year.

The share buyback, which broker Jefferies said was larger than expected and part of a "reassuring update", will be launched immediately and be conducted over 12 months.

Britain last month set out further reforms to attract more global investors to its capital market after being largely locked out of the European Union since Brexit.

"I don't see any one change or any one shift as the silver bullet," Schwimmer said.

"All of the different initiatives are incrementally helpful in terms of continuing to make London and the UK the most attractive international financial centre in the world."

Thomson Reuters, which owns Reuters News, has a minority shareholding in LSEG.

($1 = 0.8236 pounds)

(Reporting by Huw JonesEditing by Alexander Smith and David Goodman)