After a stable third quarter, London Stock Exchange Group said it was on pace to save money from the integration of data platform Refinitiv, but warned that supply chain bottlenecks could affect the timing of its technology spending.
Pro Forma’s underlying income was 1.78 billion pounds ($2.46 billion) in the three months to the end of September, up from 1.75 billion a year earlier, thanks to increased stock trading volumes and initial public offerings, according to the exchange.
With a drop in earnings from its Trading & Banking solutions business, its data and analytics section, which houses Refinitiv, saw a 0.3 percent drop in pro forma income.
In a statement, Chief Executive David Schwimmer said, “We are making fantastic progress on the integration of Refinitiv and are comfortably on schedule to achieve 125 million pounds of cost synergies in 2021, ahead of our planned timing.”
LSEG stock dropped as high as 4.2 percent before closing at 3.5 percent down.
LSEG forecasted revenue growth of 4-5 percent in the year to April, although revenue growth in the fourth quarter would be slower than in the third quarter on a constant currency basis.
Supply chain difficulties “may affect the timing of some of the technology spend this year,” it warned, without providing more specifics.
In 2018, a consortium led by Blackstone split Refinitiv out of Thomson Reuters, before being purchased by LSEG in a $27 billion deal completed in January 2021.
Schwimmer hopes to turn LSEG into a one-stop-shop for data, trading, and analytics with the acquisition, albeit the expenses of absorbing the data provider have troubled some investors.
Since the beginning of March, when statements regarding the expense of the Refinitiv integration alarmed some investors, LSEG’s stock has dropped roughly 17%.
Refinitiv pays Thomson Reuters for news it distributes, and Thomson Reuters now owns a minority position in LSEG.
