London stock exchange says Refinitiv costs and savings on track

The London Stock Exchange Group said on Friday that costs and savings targets for integrating data company Refinitiv were on track and that it was launching a 750 million pound ($911 million) share buy-back.

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 1.9% in early trading.

LSEG's Refinitiv purchase has transformed the 300-year-old London exchange into a group where financial market data and analytics are larger than all its other business lines combined, pitting it against firms such as 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.

INCOME GROWTH

LSEG reported a gross profit of 3.231 billion pounds, slightly above analysts' consensus of 3.229 billion pounds. It reported an adjusted basic earnings per share of 167.4 pence, above analysts' expectations of 149.6.

It said there was 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," analysts from Citi said in a note.

Wealth Club said that modernising Refinitiv's legacy tech systems 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-buy back will be launched immediately and be conducted over 12 months, its first since a smaller one in 2017.

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

($1 = 0.8236 pounds)