(Alliance News) - London Stock Exchange Group PLC outlined plans to return GBP1 billion to shareholders in 2024 and said its agreement with Microsoft would help drive a step-up in revenue growth.

The operator of the London Stock Exchange made the predictions as it prepares to kick-off a two-day Capital Markets event this evening and tomorrow, called "Partnering to Transform our Industry."

It said this will highlight LSEG's differentiation, the attractiveness of its end markets, plus its plans to accelerate growth, both through continued organic investment and its extensive partnership with Microsoft.

Chief Executive David Schwimmer said: "In less than three years we have transformed our business, trebling the growth rate of the Refinitiv Data & Analytics businesses we acquired and beating our growth targets line by line. But the real opportunity still lies in front of us."

"As we enter the next phase of growth, we will leverage our leading franchises across the financial markets lifecycle to create seamless workflows within and across asset classes."

LSEG said for 2023 it remains on track to achieve guidance.

"We expect to deliver full year revenue growth towards the upper end of the 6-8% guidance range, with earnings before interest, tax, depreciation and amortisation margin also in line with guidance," the firm said.

It issued new medium-term guidance, including a step-up in growth expectations. LSEG now expects mid to high single-digit organic revenue growth annually, accelerating after 2024 as customers start to benefit from the investment in platforms and the Microsoft partnership.

It predicts underlying Ebitda margin to increase over time and capital expenditure to decline to a high single-digit percentage of revenue over time. Cumulative free cash flow is to exceed underlying profit after tax attributable to equity holders, it said.

The company reported strong progress with its Microsoft partnership with a new cloud environment build well advanced with early product enhancements and new applications to begin to launch in the first half of 2024. LSEG expects revenue to build from 2025.

Enhanced shareholder returns are also planned with GBP1 billion of buybacks to be executed during 2024 plus a progressive dividend policy. The company will target a dividend cover ratio of 2.5x-3.0x it said, with a split of approximately one-third/two-thirds between the interim and final dividends.

A new reporting structure was unveiled. From 2024, LSEG will report as five divisions and simplify its business lines, aligning with new management structure and enabling easier identification of key business trends.

The firm said demand for data and its integration into workflows is growing while the rise of new technologies including artificial intelligence will increase the usage and value of data and give rise to new applications and use cases.

Shares in London Stock Exchange Group closed up 0.4% at 8,418.00 pence in London on Thursday.

By Jeremy Cutler, Alliance News reporter

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