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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  London Stock Exchange plc    LSE   GB00B0SWJX34

LONDON STOCK EXCHANGE PLC

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London Stock Exchange : Thomson Reuters operating profit tops Wall Street estimates

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10/31/2019 | 10:55am EST
FILE PHOTO: A Thomson Reuters logo is pictured on a building during the World Economic Forum (WEF) annual meeting in Davos

NEW YORK (Reuters) - Thomson Reuters Corp, parent of Reuters News, reported higher-than-expected quarterly operating profit on Thursday and said it would raise its dividend payout ratio and buy back more shares.

Chief Executive Jim Smith said the company had spent just over half the $2 billion it had set aside for acquisitions to expand its main divisions and would love to spend the rest.

Operating profit rose to $262 million, or 27 cents a share, in the third quarter, from $173 million or 12 cents a share a year ago. Analysts, on average, expected profit of 19 cents a share, according to Refinitiv.

Thomson Reuters affirmed its 2019 and 2020 sales and earnings outlook. It said it intended to increase its dividend payout ratio to 50% to 60% of free cash flow, from 40% to 50% previously.

The company, controlled by Canada's Thomson family, also said its board had approved a new buyback worth $200 million of shares both this year and next.

Revenue rose 10% to $1.41 billion in the quarter, slightly below estimates of $1.43 billion. So-called organic sales growth was 4%, matching the pace of the second quarter, driven by subscription sales to legal, corporate and other customers.

Its Toronto- and New York-listed shares dipped about 0.9 percent. They have each gained more than 30 percent in 2019.

The news and information provider posted single-digit sales increases in each of its three largest divisions, Legal Professionals, Corporates and Tax & Accounting Professionals. The Reuters News division saw organic revenue rise 3%.

The increase in operating profit reflected the revaluation of warrants the company holds in Refinitiv, which the London Stock Exchange (LSE) has agreed to buy, Thomson Reuters said in its statement.

Thomson Reuters sold a majority stake in its financial-data business last year to a consortium led by Blackstone Group Inc. The LSE agreed on Aug. 1 to buy the financial-data business, now called Refinitiv, from Blackstone for $27 billion in an all-share deal.

Thomson Reuters will hold a 15% stake in the LSE on completion of the Refinitiv deal, which is expected in the second half of 2020, the companies said. A Thomson Reuters representative will also sit on the LSE board.

Under the agreement, Thomson Reuters can sell a third of its shares in each of the third and fourth years after completion, and the rest thereafter.

Thomson Reuters has set aside $2 billion of the $17 billion proceeds from the Blackstone deal for purchases to help expand its Legal, Tax & Accounting and Corporates businesses.

"We're about just over half of the $2 billion that we have set aside for acquisitions," CEO Smith said in an interview. "I'd love to find a way to spend the other half."

During the quarter, the company acquired events company FC Business Intelligence (FCBI), which hosts exhibitions and conferences in sectors including pharmaceuticals, energy and transport, to help promote its Reuters News brand.

(Additional reporting by Kenneth Li in New York; Writing by Nick Zieminski; Editing by David Clarke)

Stocks mentioned in the article
ChangeLast1st jan.
LONDON STOCK EXCHANGE PLC 0.40% 7950 Delayed Quote.2.58%
THOMSON REUTERS CORPORATION 0.57% 104.06 Delayed Quote.11.39%
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Financials (GBP)
Sales 2019 2 280 M
EBIT 2019 1 061 M
Net income 2019 551 M
Debt 2019 1 370 M
Yield 2019 0,87%
P/E ratio 2019 53,8x
P/E ratio 2020 43,7x
EV / Sales2019 12,8x
EV / Sales2020 12,0x
Capitalization 27 759 M
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Average target price 7 693,62  GBp
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David Adam Schwimmer Group Chief Executive Officer & Executive Director
Donald Austin Robert Chairman
David Shalders Chief Operating & Integration Officer
David Porter Warren Group Chief Financial Officer & Executive Director
Anthony McCarthy Chief Information Officer
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