London Stock Exchange Group PLC
London Stock Exchange Group Plc (LSE) is a London, United Kingdom-headquartered company which engages in international markets infrastructure business, operating a wide range of equity, ETF, bond and derivatives markets. The company is also a global leader in analytic services, benchmarking and financial indexing, and offers market participants unrivalled access to capital markets in Europe. The group develops and operates high-performance technology solutions, and risk management and post- trade services are a significant part of its business operations.
The company on 1 August 2019 announced the acquisition of Refinitiv for $27 billion, which will be funded by taking on $12.5 billion of existing debt and issuing $14.5 billion in new shares. The deal would help the group to rival the financial data empire of Bloomberg and turn it into global markets and information powerhouse. It will also help the company to further reduce its reliance on its UK and European business and become less dependent on transaction-based revenues. The combined business would create a leading, London headquartered, international financial market infrastructure provider who will have annual revenues of more than GBP 6 billion with planned annual cost savings of more than GBP 350 million within five years of a deal.
LSE- Financial highlights for H1 FY19
Revenue rose by 7% to GBP 1,018 million from GBP 953 million last year and was up by 5% on a constant currency basis, while total income increased by 8% to GBP 1,140 million against GBP 1,060 million last year and was up by 6% on a constant currency basis. Gross profit increased by 8% to GBP 1,031 million (H1 2018: GBP 954 million), even as the cost of sales rose by 3% to GBP 109 million (2% on a constant currency basis). Operating profit was up 2% at GBP 399 million (H1 2018: GBP 393 million) while adjusted operating profit for the period was up by 11% to GBP 533 million (H1 2018: GBP 480 million). Profit before tax was up by 1% to GBP 363 million (H1 2018: GBP 360 million) while adjusted profit before tax rose by 11% to GBP 497 million (H1 2018: GBP 447 million). Profit after tax declined to GBP 265 million (H1 2018: GBP 283 million), corresponding to basic earnings per share of 70.7 pence (H1 2018: 71.1 pence) and adjusted earnings per share of 100.6 pence (H1 2018: 88.7 pence), up by 13%. The group declared an interim dividend of 20.1p per share, which reflected an increase of 17%, and reported a strong balance sheet position with leverage at 1.7x adjusted net debt/pro forma EBITDA.
The ongoing trade tensions between the US and its trading partners, coupled with the political uncertainty in the UK, has unsettled global markets, which may lead to lower revenue due to lower activity. While the income stream of the group has diversified due to geographical diversification, it has also led to greater foreign exchange risk. Investor confidence has been dampened due to the threat of slowing global economy, which can affect activity levels. The company operates in a highly competitive industry, though the acquisition of Refinitiv would help the company to compete better. The latest acquisition offers many opportunities to the group, but it has also increased the risks faced, including the threat of not realising the anticipated gains.
LSE-Share price performance
(Source: Thomson Reuters) Daily Chart: October-01-19, before the market close
On 01 October 2019, at 10:57 AM GMT, while writing, London Stock Exchange Group Plc shares clocked a price point of GBX 7,311 per share; which was up by 0.04 per cent as against the previous day trade closing price point. The company’s market capitalisation was ~ £25.56 billion.
LSE shares have clocked a high of GBX 7,922 (as on 11 September 2019) and a low of GBX 3,842 (as on 06th December 2018) in the past year. At the current price point, as quoted in the price chart, the company’s shares were trading 7.71 per cent below the 52-week high price point and 90.29 per cent above the 52-week low price point.
The stock’s volume before the market close, was around 65,917 while writing. Stock’s average traded volume for 5 days was 584,117.80; 30 days- 775,409.50 and 90 days – 661,621.41. The company’s stock beta (5y monthly) was 0.69, which makes it less volatile as against the benchmark index.
The average traded volume for 5 days plunged by 24.67 per cent as against 30 days average traded volume. The shares of the company were clocking a price level above the 30-days and 60-days simple moving averages (SMA) while writing.
In the past 1 month, LSE shares have delivered a positive return of 59.35 per cent. Also, on a YTD (Year-to-Date) time interval, the stock surged by approximately 79.91 per cent and was up by 33.21 per cent in the last three months.
Share’s RSI (Relative Strength Index) for the 30-days, 14-days and 9-days was recorded at 61.41, 57.35 and 54.64 respectively. Also, the stock’s RSI (3-days) stood at 44.17.
Lloyds Banking Group Plc
London based lender, Lloyds Banking Group Plc (LLOY) is a provider of a wide variety of banking and non-banking services across the United Kingdom. The company’s offering includes deposit facilities, credit facilities (both long-term and short-term), credit and debit payment systems, investment instruments, finance facilities for consumables and debt instruments.
The company operates in different segments, namely- Retail banking, Commercial Banking, Consumer finance and Insurance segment.
By the end of H1 FY19, the company incurred a PPI (Payment Protection Insurance) charge of £650 million, with an unutilised provision of £1,083 million to entertain 190,000 PPI information requests per week. However, these requests were ranging in between 600,000 to 800,000 per week, far more than expected. Hence, the provisions made by the company had been revised, which will lie in the range of £1.2 billion to £1.8 billion. In a separate development, the company acquired Tesco Bank’s residential mortgage portfolio in the UK valued at £3.7 billion.
LLOY-Financial highlights for H1 FY19
The company had delivered a strong performance; underlying profit stood at £4.2 billion in H1 FY19, which was in line with the previous year. The company’s statutory profit after taxation stood at £2.2 billion considering an extra PPI (payment protection insurance) charge incurred amounting to £650 million. The company’s NIM (net interest margin) dipped by 3 basis points to 2.9 per cent in H1 FY19 as against the first half of fiscal year 2018. The company’s Cost to income ratio plunged by 1.8 percentage points to 45.9 per cent.
The company’s return on tangible equity (statutory) surged by 0.2 percentage points to 11.5 per cent as against 11.3 per cent in six months period ended 31st December 2018. The company’s loan portfolio and credit quality were good, reflecting the company’s cautious credit risk assessment and policies. The company’s declared an interim dividend stood at 1.12 pence per share in H1 FY19, a 5 per cent rise against the (1H) six-month period ended in the fiscal year 2018.
LLOY-Share price performance
(Source: Thomson Reuters) Daily Chart: October-01-19, before the market close
On 01 October 2019, at 11:03 AM GMT, while writing, Lloyds Banking Group Plc shares clocked a price point of GBX 54.49 per share; which was up by 0.68 per cent as against the previous day trade closing price point. The company’s market capitalisation was ~ £37.92 billion.
LLOY shares have clocked a high of GBX 67.90 (as on 23 April 2019) and a low of GBX 48.16 (as on 15 August 2019) in the past year. At the current price point, as quoted in the price chart, the company’s shares were trading 19.74 per cent below the 52-week high price point and 13.14 per cent above the 52-week low price point.
The stock’s volume before the market close, was around 25,050,143 while writing. Stock’s average traded volume for 5 days was 121,553,208.40; 30 days- 164,340,092.97 and 90 days – 151,348,479.19. The company’s stock beta (5Y monthly) was 0.74, which makes it less volatile as against the benchmark index.
The average traded volume for 5 days plunged by 26.04 per cent as against 30 days average traded volume. The shares of the company were clocking a price level above the 30-days and 60-days simple moving averages (SMA) while writing.
In the past 1 month, LLOY shares have delivered a negative return of 8.69 per cent. Also, on a YTD (Year-to-Date) time interval, the stock surged by approximately 4.38 per cent and was down by 4.36 per cent in the last three months.
Share’s RSI (Relative Strength Index) for the 30-days, 14-days and 9-days was recorded at 52.37, 57.11 and 57.04 respectively. Also, the stock’s RSI (3-days) stood at 50.14.