London Stock Exchange profits up as Schwimmer imposes authority
David Schwimmer became chief executive in August.
London Stock Exchange Group has posted a rise in annual sales and profits, but the company’s new chief executive said he would prioritise investment over earnings growth.
The exchange operator booked a 14% rise in operating profit to £751 million in 2018, while revenue jumped 8% to £1.9 billion.
But David Schwimmer, who became chief executive in August following the controversial departure of former boss Xavier Rolet, used his first annual results to tell investors that LSE does not expect to meet earnings targets.
“Prioritisation of further investment in growth opportunities means the group does not plan to achieve cost and group margin targets in 2019,” the firm said.
LSE had been targeting an earnings margin target of around 55% this year.
The group will also cut around 5% of global headcount, or 250 staff, and look to make £30 million of cost savings per year.
But Mr Schwimmer said: “LSE continues to be well positioned in an evolving macroeconomic and regulatory landscape.
“Our businesses, including those perceived to be most exposed to Brexit, such as clearing, continue to perform very well, with no change in our market position.”
Mr Schwimmer is not the firm’s only new recruit.
LSE recently appointed Experian’s Don Robert as chairman following a bitter public dispute within the company’s boardroom.
Mr Robert will succeed Donald Brydon – who had come under pressure from shareholders to quit – as chairman at the end of the annual general meeting on May 1.
The group has also recently shelled out 438 million euro (£384 million) to up its stake in British clearing house LCH to more than 80%.
Shares were up more than 2% in morning trade at 4,608p.