MARKET REPORT: London Stock Exchange Group slides after profits dip despite strong growth across the business

Shares in the London Stock Exchange Group (LSEG) fell as profits dipped despite strong growth.

The FTSE 100 firm’s profit fell 17.6 per cent to £662million in the first six months of this year following a foreign exchange rate adjustment on its balance sheet.

Shares slid 1.2 per cent, or 98p, to 8188p but it said it remained on a solid footing, with revenues up 7.9 per cent to £4billion and ahead of the £3.97billion analysts expected.

Sales across its data and analytics division, which accounts for two-thirds of group revenue and is home to Workspace, Eikon and the indices provider FTSE Russell, rose 7.6 per cent.

Its annual subscription value growth at the end of June was higher than the previous six months but fell short on the first quarter of this year.

Shares hit: London Stock Exchange Group’s profit fell 17.6% to £662m in the first six months of this year following a foreign exchange adjustment on its balance sheet

It now expects revenue to grow towards the top end of the 6-to-8 per cent range it gave in its first quarter update.

Boss David Schwimmer said its partnership with Microsoft is ‘progressing well’ after the pair agreed a ten-year deal in December.

And he told Bloomberg TV that the group is ‘optimistic’ about the IPO market ‘coming back strong and healthy’ in the second half.

The FTSE 100 fell 0.4 per cent, or 32.47 points, to 7529.16 and the FTSE 250 was up 0.1 per cent, or 20.77 points, to 18,833.65.

Stock markets around the world struggled for direction a day after the US government’s credit rating was downgraded following a debt ceiling crisis. In London, the Bank of England raised interest rates by 0.25 per cent to a 15-year high.

Wizz Air returned to profit as the Hungarian budget airline cashed in on demand for summer holidays. It swung back into a profit of £53million, having made a £390million loss the year before.

Stock Watch – Devolver Digital

Devolver Digital fell 28.2 per cent, or 5.5p, to 14p after the video game publisher warned its profits for the year will be lower than expected.

It has been hit by delays to title releases, lower revenue from subscriptions and weak back-catalogue sales.

That included popular action-adventure game The Plucky Squire, which is to be released in 2024, not 2023.

It expects a loss for the first half of this year, to break even for the whole of 2023, and to return to growth in 2024.

First-quarter revenue of £1billion was 52.9 per cent up on the same period a year ago, as it carried a record 15.3m passengers in the three months to the end of June.

But capacity relating to seats flown will grow by around 25 per cent the first half of its financial year, rather than the 30 per cent it previously forecast, due to industry-wide infrastructure and supply issues.

The shares slipped 2 per cent, or 48p, to 2314p.

Mondi is still seeking a buyer to take over its prime Syktyvkar mill in Russia a month after it pulled out of talks with a suitor.

It came as the paper and packaging firm’s profit fell to £360million in the six months to the end of June, down from £804million the year before. 

And revenue fell to £3.34billion, from £3.9billion. It said performance was affected by a slump in demand, customers holding on to less inventory and rising costs.

Shares sank 6.7 per cent, or 90p, to 1245.5p. Drug maker Hikma Pharmaceuticals raised its forecasts for the division which makes the substances used in nasal sprays and dry powder inhalers after revenue soared 39 per cent to £362million in six months to the end of June.

The generics business – 32 per cent of group sales – is expected to increase its revenue by nearly 30 per cent, up from a previous target of almost 20 per cent.

Elsewhere, it took a £72million hit after it halted operations in Sudan, which accounts for less than 3 per cent of sales, amid the country’s conflict.

Hikma’s shares dipped by 0.7 per cent, or 15p, to 2060p.

Helios Towers, the telecoms infrastructure company focused on Africa and the Middle East, increased its forecasts for the spaces it expects to lease this year so a transmission site can be installed. 

The group now expects tenancy additions of between 1,900 and 2,100, having previously set a target of 1,600 to 2,100.

The company’s shares rose by 6 per cent, or 5.05p, to 89.05p.

This post first appeared on Dailymail.co.uk