London Stock Exchange owner downplays extent of listing exodus
The owner of the London Stock Exchange dismissed the gloom that is plaguing London’s public markets, pointing to its solid performance relative to European counterparts.
Speaking alongside his firm’s full-year results, David Schwimmer, the veteran boss of the London Stock Exchange Group (LSEG), reiterated his view that UK IPOs would pick up this year, saying he was “very confident in the direction of travel”.
“The LSE [London Stock Exchange] was the number one venue in Europe for raising equity capital, with £25bn raised for 274 companies” Schwimmer said. “This was more than the next three exchanges combined.”
The LSEG reported a 10.3 per cent jump in the group’s profit before tax this morning, allowing it to announce a new £500m buyback for the first half of this year.
But the firm tempered analyst expectations on future revenue estimates, suggesting it will come in between 6.5 per cent and 7.5 per cent in 2025; a slight tail off from the 7.7 per cent it generated last year.
The LSEG has swollen into one of the world’s largest data and analytics firms in recent years, employing over 25,000 people and becoming a constituent of the ‘FTSE 10’ – an informal group of the 10 largest companies on the FTSE 100 index.
Its expansion into other exchanges and wider data products means the London market now accounts for less than three per cent of revenue. The transition has prompted some shareholders – including Blue Whale Growth manager Stephen Yiu – to call for the group to spin off or sell the LSE and focus on its data arm.
But Schwimmer poured cold water the proposal when asked about it on Tuesday, saying it was “absolutely core to our [LSEG’s] strategy, our business model and our brand”.
The boss was also asked about the London Stock Exchange’s ability to retain some of its blue chip firms, amid a growing pattern of companies being picked off public markets by private equity or opting to move their primary listing to the US.
But Schwimmer played down the extent and gravity of the exodus to the US, pointing that just two listed UK-listed companies a year in the past 10 years had opted to move listings to US exchanges.
“When you look at the facts… I feel very good and very confident about the direction of travel,” he said.