23rd Oct 2025 10:16
(Alliance News) - London Stock Exchange Group PLC raised margin guidance after a strong third-quarter driven by growth across the business, led by Risk Intelligence and FTSE Russell indices.
LSEG also announced a GBP1 billion share buyback and a deal with 11 major banks for its Post Trade division.
Shares in the London-based exchange operator and data provider rose 7.2% to 9,350.00 pence each in London on Thursday morning.
LSEG said total income excluding recoveries rose 4.8% to GBP2.22 billion in the third quarter from GBP2.12 billion the year prior, or by 6.4% on an organic constant currency basis. This was slightly ahead of company compiled consensus of GBP2.20 billion.
The growth was led by Risk Intelligence up 14% and FTSE Russell up 9.3%, with Data & Analytics up 4.9% and Markets up 6.3%.
Gross profit increased 4.8% to GBP2.02 billion from GBP1.92 billion, or by 6.5% on an organic constant currency basis, ahead of GBP2.00 billion consensus.
LSEG flagged continued growth of 6.5% in its subscription businesses, with period-end annual subscription value growth of 5.6%, ahead of 5.4% company compiled consensus, although down from 5.8% in the second quarter.
A headline re-acceleration of ASV growth is anticipated in the fourth quarter, it said.
Reflecting the strong quarter, LSEG raised its 2025 earnings before interest, tax, depreciation and amortisation margin guidance to the top of its 75 basis points to 100 bps improvement range, expecting a 100 basis point improvement from 48.8% in 2024, excluding a further 100 basis point benefit from new SwapClear arrangements.
Guidance had already been raised from a range of 50bps to 100bps at the time of first half results.
LSEG said it is "confident in delivering all other financial targets."
LSEG announced an additional GBP1 billion share buyback to be completed by February 2026, bringing total repurchases over the 12-month period to GBP2.5 billion.
The company also addressed concerns that artificial intelligence may impact its business by stating it expects AI to generate "significant and sustained growth in demand for trusted, industry-standard data".
In addition, LSEG signed a deal with 11 global banks - Bank of America Corp, Barclays PLC, BNP Paribas SA, Citigroup Inc, Deutsche Bank AG, HSBC Holdings PLC , JP Morgan Chase & Co, Morgan Stanley, Nomura Holdings Inc, Societe Generale SA, and UBS Group AG - for them to acquire a 20% stake in its Post Trade Solutions division for GBP170 million, valuing the business at GBP850 million.
The agreement will also amend the SwapClear revenue share terms, cutting the banks' portion from 30% to 15% in 2025 and to 10% from 2026, with the arrangement extended to 2045.
LSEG will pay GBP1.15 billion cash for the change in terms, payable in two instalments in 2025 and 2026. A further payment of up to GBP200 million will be payable should certain future growth targets be met.
The company said the changes will lift its share of the revenue surplus and are expected to be 2% to 3% accretive to adjusted earnings per share in 2025, with further benefits anticipated in 2026.
The transaction is expected to close in 2025.
By Jeremy Cutler, Alliance News reporter
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