TIDMLSE
RNS Number : 7360X
London Stock Exchange Group PLC
01 May 2019
LONDON STOCK EXCHANGE GROUP PLC
Annual General Meeting
Wednesday 1 May 2019
Chairman's statement by Donald Brydon
The Group delivered another strong performance in 2018. We
continued to execute our strategy successfully to grow and
diversify, operating on an Open Access basis in partnership with
our customers. We are strategically, operationally and financially
well positioned to capitalise on a range of opportunities ahead,
and to continue to drive returns for shareholders.
As ever there has been an evolving backdrop of macroeconomic,
regulatory and political challenges, including of course the
ramifications of Brexit. It is therefore particularly to the credit
of the management that the Group has been so successful.
This was clearly demonstrated in our 2018 results, with growth
across all of our core business pillars - Information Services;
Risk and Balance Sheet Management; and Capital Formation.
We have remained focused on both the organic and inorganic
growth of our businesses, including increasing our stake in LCH to
82.6%; the investment through a near 5% stake in Euroclear; the
acquisition of 100% ownership of the FTSE TMX Global Debt Capital
Markets business; and the purchase of a minority stake in Nivaura
to support capital markets innovation. LSEG also acquired a
minority 16% stake in AcadiaSoft, supporting LCH's strategy to
expand into the non-cleared space.
For 2018, total income rose 9% to GBP2.1 billion, and adjusted
operating profit increased to GBP931 million. The Board is
proposing a final dividend of 43.2 pence per share, making a total
dividend for the year of 60.4 pence per share - a 17% year-on-year
increase, in line with the growth in adjusted earnings per
share.
In Information Services, FTSE Russell now has more than $16
trillion of assets benchmarked to its indices, while $606 billion
of ETF assets are currently tracking its indices. We have been able
to significantly enhance FTSE Russell's fixed income capabilities,
whilst increasing the Group's footprint in the US and Asia.
In Post Trade, LCH cleared record volumes in 2018, driven by new
business as well as additional flow from existing customers.
SwapClear remains the leading OTC rates liquidity pool in the
world, processing more than $1 quadrillion in notional value in
2018, driven by significant growth in new clients across Europe,
the Americas and Asia Pacific. Compression volumes also continued
to rise with over $773 trillion compressed, providing significant
economic benefits to LCH members, delivering approximately $39
billion in capital and operational savings over the course of the
year and helping to make the global banking industry more
efficient.
In Capital Markets, London Stock Exchange continued to be the
largest European exchange in terms of money raised, with GBP35.9
billion raised through Initial Public Offers and Further Offers in
2018. In fixed income, 2018 was the strongest year for bond
issuance in the past five years, with over 2,000 bonds issued.
Borsa Italiana helped companies raise EUR2 billion through listings
in 2018 across its markets.
Building on the results from 2018, I am pleased to be able to
share our Q1 2019 results, released this morning.
The Group delivered a good overall first quarter income
performance. Total income rose 5% year-on-year, with growth in our
Information Services and LCH Post Trade businesses. Revenues for
our Capital Markets business declined, reflecting lower equity
trading volumes in a challenging market. Gross profit in Q1 rose 6%
to GBP490 million.
It was another busy period as we continued to execute on our
strategy, acquiring a minority stake in Euroclear, reaching an
updated SwapClear agreement which will deliver significant cost
savings, and further investment in new products and opportunities.
We remain well positioned to develop further in an evolving
macroeconomic landscape.
During the first half of the year, the Group was led by David
Warren, who combined his role as Chief Financial Officer with that
of interim Chief Executive Officer. His collegiate approach and
professionalism ensured that the Group lost no momentum. I should
like to record my gratitude and that of the Board to him for his
excellent service which of course continues today in his role as
CFO.
We were joined in August by David Schwimmer as our new Chief
Executive Officer. During his first nine months in post, he has
demonstrated his deep knowledge of market infrastructure, his
evident intellect and clarity of thought, his determination to
succeed through leading a business with the right culture and a
collaborative style. David has provided excellent leadership during
this complex time, and we look forward to his continued leadership
of the Group.
In the last year, there have been a number of initiatives in the
area of corporate governance culminating in the publication of the
revised UK Corporate Governance Code. The Code makes reference to
the need for boards to consider carefully the culture of the
company. During the past year, we have worked with the executive
team to develop ways to ensure that we set the tone for appropriate
collaboration and customer-focused behaviours, as well as monitor
our culture on an ongoing basis. We have had excellent support and
leadership from the CEO in this endeavour.
We were pleased to welcome several new Board members who bring
the benefit of their experience to the Group. Marshall Bailey
joined as Chairman of LCH Group and a member of the LSEG Board in
September last year, bringing banking and regulatory skills to the
roles. Ruth Wandhöfer was appointed in October 2018, bringing a
background in banking and regulation and an understanding of
emerging technologies.
Professor Kathleen DeRose joined in December of 2018, bringing
significant experience in asset management and fintech. Cressida
Hogg joined the Group in March this year, bringing substantial
board experience to the Group combined with a strong corporate
background in infrastructure and private equity.
Finally, but most importantly we welcomed Don Robert to the
Board in January 2019 as a Non-Executive Director, bringing to the
Board a strong track record in the global financial services sector
and a deep understanding of technology, data and analytics. He will
succeed me as Chairman of the Group following this meeting.
I have great confidence in the future of this great company -
Don, it will be a privilege for you to lead it from the Chair. I
wish you and all the Board and management continued success.
Further information is available from:
London Stock Exchange Group plc
Gavin Sullivan / Lucie Holloway Media +44 (0)20 7797 1222
Paul Froud Investor Relations +44 (0)20 7797 3322
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END
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