London Stock Exchange Group’s pre-tax profit jumps 5.2% in 2020

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Written on Mar 5, 2021

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London Stock Exchange Group’s pre-tax profit jumps 5.2% in 2020.
The British company reports £2.12 billion of total revenue.
LSE proposed 51.7 pence per share of final dividend on Friday.

London Stock Exchange Group plc (LON: LSE) said on Friday that its pre-tax profit in 2020 saw a 5.2% growth. The company attributed the increase to robust revenue last year. On the back of its hawkish performance, LSE also raised its dividend on Friday.

LSE shares slid more than 1% in premarket trading on Friday and lost another 5% in the next hour. Including the price action, the stock is now trading at £88.22 per share versus £92.62 per share at the start of the year. In comparison, it had tumbled to as low as £58 per share in March 2020, when the COVID-19 pandemic wreaked havoc on the global financial markets.

LSE reports £2.12 billion of total revenue

The stock exchange reported £685 million of pre-tax profit in 2020. In the previous year, its pre-tax profit stood at a lower £651 million. LSE said that it generated £2.12 billion of total revenue in the recently concluded year – an increase from £2.06 billion in 2019.

LSE highlighted a slight decline in its revenue from technology services last year. Its post-trade services and information services segments, however, more than offset the decline, resulting in a growth in its overall revenue in 2020.

As per the financial information company, its adjusted EBITDA (earnings before interests, taxes, depreciation, and amortisation) in 2020 stood at £1.33 billion versus the year-ago figure of £1.27 billion.

In an announcement in October, LSE said that it had struck a deal with Euronext to sell Borsa Italiana.

LSE proposed 51.7 pence per share of final dividend on Friday, which pushed its total full-year dividend to 75 pence per share or 7% higher than the previous year.

CEO David Schwimmer’s comments on Friday

According to Chief Executive David Schwimmer:

“LSEG is well-positioned for long-term sustainable growth in a continually evolving landscape as a leading global financial markets infrastructure and data provider.”

London Stock Exchange’s financial report comes a day after Melrose Industries warned that the aerospace sector was likely to struggle this year due to the COVID-19 crisis that has so far infected more than 4.2 million people in the UK, and caused over 124 thousand deaths.

London Stock Exchange Group plc performed fairly upbeat last year with an annual gain of a little under 20%. At the time of writing, it is valued at £53.15 billion.