London Stock Exchange Group on Thursday said 2021 was a successful year following the acquisition of Refinitiv, leaving the stock exchange operator well positioned as a financial market infrastructure and data business.
For 2021, LSEG generated total income of £6.81 billion, up from a pro-forma £6.77 billion in 2020. Gross profit rose to £6.24 billion from £6.16 billion on the same basis. Adjusted pretax profit was £2.30 billion, up 27% from £1.81 billion. Statutory pretax profit was £987m, up from £492m.
LSEG declared a final dividend of 70 pence per share, a 27% increase in full year dividend to 95 pence per share, reflecting its strong performance in the year and confidence in outlook.
‘The group has delivered a strong financial and operating performance in the first year following the successful completion of the acquisition of Refinitiv, with good revenue growth across all of our businesses. We are making excellent progress on integration and are on track to meet or exceed all the acquisition targets. We have established our position as a leading global market infrastructure and data business, and we carry good momentum into 2022,’ said Chief Executive Officer David Schwimmer.
LSEG said cost synergies following the Refinitiv acquisition were running ahead of target, with £151 million in annual run-rate achieved in 2021. It has identified an additional £50 million in cost synergies, raising its five-year target to at least £400 million.
LSEG shares were up 9.4% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.4% at 7,460.10
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Hang Seng: up 0.6% at 22,467.34
Nikkei 225: closed up 0.7% at 26,577.27
S&P/ASX 200: closed up 0.5% at 7,151.40
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DJIA: closed up 596.40 points, 1.8%, at 33,891.35
S&P 500: closed up 1.9% at 4,386.54
Nasdaq Composite: closed up 1.6% at 13,752.02
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EUR: down at $1.1098 ($1.1130)
GBP: up at $1.3400 ($1.3363)
USD: firm at JP¥115.68 (JP¥115.60)
Gold: up at $1,929.01 per ounce ($1,923.31)
Oil (Brent): up at $116.98 a barrel ($109.94)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday’s key economic events still to come
0955 CET Germany services purchasing managers’ index
1000 CET EU eurozone services PMI
1100 CET EU producer price index
1100 CET EU unemployment
1300 CET EU ECB meeting accounts
0930 GMT UK services PMI
0830 EST US initial jobless claims
0945 EST US services PMI
1000 EST US ISM report on business services PMI
1000 EST US Fed Chair Powell presents Monetary Policy Report to Congress
1030 EST US EIA weekly natural gas storage report
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Russian forces have taken the Black Sea port of Kherson in southern Ukraine, the first major city to fall after a string of setbacks for Moscow. Russia’s invasion so far has been astonishingly badly managed, a blundering ‘disaster, through and through’, US defence experts said. It is like Moscow ‘tripped over the doorframe on the way into the house,’ one expert said, citing food and fuel shortages, poor intelligence and planning. Ukraine’s second city Kharkiv continues to come under heavy Russian shelling, with police and university buildings among the latest struck.
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Ratings agencies Fitch and Moody’s slashed Russia’s sovereign debt to ‘junk’ status, or the category of countries at risk of not being able to repay their debt, a week after Moscow began its assault on Ukraine. Moody’s downgraded the rating on Russian long-term debt from Baa3 to B3 subject to a further review over the West’s sanctions against Russia, while Fitch lowered its rating from BBB to B, also with a negative outlook. ‘The multi-notch downgrade of Russia’s ratings and maintaining the review for further downgrade were triggered by the severe sanctions that Western countries have imposed on Russia’, including on its central bank and some large financial institutions, Moody’s said in a statement. The agency also noted a ‘heightened risk of disruption’ to sovereign debt repayment in the face of ‘severe and coordinated sanctions’.
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China’s service sector slowed at the slowest rate for six months in February, survey data showed, though businesses expressed a stronger optimism for the year ahead. The seasonally adjusted headline business activity index slipped to 50.2 in February from 51.4 in January, signalling only a marginal rise in services activity.
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Service providers in Ireland reported the fastest growth in new business in six years, as overall business activity hit a four-month high in February, according to survey results released by IHS Markit. The AIB services business activity index jumped to 61.8 points in February from 56.2 in January, as Covid-19 restrictions were lifted in Ireland. The reading was the highest in four months and well above the long-run average of 55.0 points. The month-on-month acceleration in growth was the sharpest on record, IHS Markit said. The strong services score lifted the AIB Ireland composite purchasing managers’ index to 59.1 in February from 56.1 in January, overcoming a decline in the factory sector reading. On Tuesday, IHS Markit had said the manufacturing PMI score was 57.8 points last month, down from 59.4 in January.
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BROKER RATING CHANGES
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Morgan Stanley cuts Hikma Pharmaceutical to ’equal-weight’ (’overweight’) - price target 2,300 (2,800) pence
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JPMorgan resumes SSP with ’overweight’
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COMPANIES - FTSE 100
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Housebuilder Taylor Wimpey said it delivered a strong 2021 performance with results in line with its expectations. For 2021, it posted pretax profit £679.6 million, up from £264.4 million in 2020 on revenue of £4.28 billion, up from £2.79 billion. 2021 saw a 47% increase in UK completions including joint ventures to 14,087, up from 9,609 in 2020, driven by good build performance and strong demand. Taylor Wimpey declared a final dividend of 4.44 pence for 8.58p total, up from 4.14p in 2020. It also plans £150 million share buyback in 2022 to return excess cash. Looking ahead, the company continues to expect to deliver low single-digit year-on-year completions growth in 2022 and to make further progress towards 21% to 22% operating margin target. Its operating margin in 2021 was 19.3%, up from 10.8% in 2020. Taylor Wimpey expects 2022 year-end net cash to be around £600 million, depending on the timing of land payments. ‘With the opportunistic purchase of additional land over the last 18 months, our land pipeline leaves us well placed to accelerate high-quality, profitable volume delivery from 2023, generating additional value and compelling investor returns,’ said Chief Executive Officer Pete Redfern.
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CRH said 2021 was another year of record delivery for the Dublin-based building materials firm, with continued strong cash generation and profit growth. For 2021, CRH posted pretax profit of $3.34 billion, doubled from $1.66 billion in 2020 on revenue of $30.98 billion, up 12% from $27.59 billion. CRH generated record net cash flows from operating activities of $4.2 billion in 2021, up from $3.9 billion in 2020. CRH declared a final dividend of 98.0 US cents per share, resulting in a total dividend of 121.0 cents for the year, up from 115.0 cents in 2020. Looking ahead, CRH expects underlying demand and pricing backdrop to remain favourable in 2022 albeit against an inflationary input cost environment and continued supply chain challenges. Federal funding for infrastructure is underpinned by the passing of the $1.2 trillion infrastructure package by the US Congress, while the US residential market is expected to continue to grow driven by robust demand, it added.
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Coca-Cola HBC revoked its 2022 financial guidance due to the conflict between Russia and Ukraine, two of its key sales territories. The soft drinks bottler noted that 20% of its 2021 volumes and earnings before interest and tax came from the two countries. It temporarily stopped product at its plant in Kyiv on February 24 and evacuated its employees. Coca-Cola HBC said it will use management actions to mitigate the headwinds outside its control and is ready to redeploy marketing spend and capital expenditure to other markets.
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Investment manager Schroders said pretax profit jumped by 25% in 2021 to £764.1 million from £610.5 million in 2020, as net income rose by 18% to £2.57 billion from £2.18 billion. Schroders hiked its annual dividend by 7.0% to 122.0 pence from 114.0p. ‘After a period of benign markets there is a risk that the current turbulence will be with us for some while,’ the company said.
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Thursday’s shareholder meetings
Chemring Group PLC - AGM
Petro Matad Ltd - AGM
Zytronic PLC - AGM
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