00:00We've had a record first half. This is the strongest first half we have had since the
00:04acquisition of Affinitiv five years ago. A top-line growth of 8.4%. We're getting a lot of
00:11improvement out of our margins, so great operating leverage in the business. And we are also seeing
00:16real benefits in terms of a lot of the new product that we've rolled out, a lot of that being
00:19AI,
00:20where we're getting traction with thousands of users. You touched on the volatility.
00:24We are seeing the benefits of volatility, particularly across our markets, businesses,
00:29but also in our data businesses, where the demand for the data continues to be very strong. But in
00:33our markets businesses, whether that's foreign exchange trading, fixed income trading, the various
00:40derivatives asset classes in the clearinghouse, and of course equities, we saw a very strong first
00:45half really across the board. And we'll see what the volatility looks like in the second half. But
00:51we have a lot of confidence in the performance for the full year in the second half. And as you
00:56mentioned, we have upped our both revenue and margins guidance, full year guidance for the rest
01:01of the year. Now, the last time we spoke to you earlier this year, we talked a little bit about
01:06buybacks. And I'm wondering, you have a new buyback announced this morning, £1.35 billion. I'm just
01:14wondering, was there much pressure from shareholders, thinking about management as well, to up the
01:19amount of that buyback? How much influence did they have?
01:21No, this is just the completion of the 3 billion buyback that we announced earlier in the year. So,
01:27we've done a good amount of that in the first half. And then what we have announced today is
01:32just the completion of that amount. So, I think there is a reflection in that of the very strong
01:40cash flow that we're generating. And at the same time, we have plenty of capital to continue to invest,
01:46whether that's organically, whether that is through bolt-on M&A, that we're always evaluating.
01:52So, the buyback is sort of a steady-as-we-go here.
01:57Well, one of the main issues for the UK in the past decade is this shrinking stock market.
02:02You know, it's both from kind of cheap valuations and therefore companies being bought up, also
02:08a lack of IPOs. Do you think that the UK will have a globally significant stock market in a few
02:13years' time? Absolutely. So, first notion that M&A on the market is a bad thing, I think is,
02:20frankly, completely wrong. A healthy market has M&A. And I think we've seen very healthy M&A activity
02:28in this market and a good corporate regime and good disclosure and great companies. I think where
02:35there has been a challenge, not just in London, but around the world, is in a reduction of new
02:41companies coming to the markets. Now, we actually have a great pipeline for London here and reported
02:49pretty much day after day or week after week in terms of new companies that are planning to come
02:54to London. They're not going to come in August, but we expect to see more in the back half of
02:59this year,
03:00as well as going into 2027. And I think that's the key aspect in terms of getting that kind of
03:06replenishment of public companies on the markets. Now, we've also seen the development over the last
03:1310, 15 years of very robust private markets. And in many ways, because of the availability of capital
03:22in the private markets, that has reduced some of the need, if you will, for companies to go public.
03:27We also have great offerings to address the private markets as well. And we're getting real traction with
03:33our private securities market, where just this past month, we have seen offerings from Wave and
03:40Moneybox and others that are really taking advantage of this innovative new platform,
03:44our private securities market. So absolutely healthy markets going forward, whether they be private or
03:51public. I'll come back to the private markets in a moment, but just on the IPO pipeline,
03:56there have been quite a few deferrals of listings, the likes of Waterstones, for example. I mean,
04:01is that down to market volatility? Are you worried about when you see those numbers of deferrals?
04:06I'm not worried about the volatility in the markets. The volatility in the markets is what it is.
04:12And in many ways, the volatility is healthy for other parts of our business. When I look at the London
04:19markets,
04:20yes, of course, sometimes volatility will have an impact on companies' decisions as to when they want to
04:27access the markets. Companies often don't want to access the markets. If there's great uncertainty,
04:31that can be political, it can be about interest rates, it can be about concerns about war.
04:38But companies need capital. Companies want that capital to grow. And I think we are getting into an
04:45environment here where, in many ways, the volatility is the new norm. And companies recognize they have
04:51to sail through that and access the market so that they can raise the capital that they want and need
04:56to grow. There is a concern, though, about around the UK in the sense that, you know, low valuations,
05:04yes, it might kind of propel M&A, but it also does mean de-equitization and a lack of competitiveness.
05:09And part of that is in terms of the relative disadvantage that some see because of the 0.5%
05:16stamp duty on share purchases in the UK. Have you had any conversations with Andy Burnham or his team,
05:22the new Prime Minister here in the UK, to try to convince him, this has been a long-running saga,
05:28try to convince this iteration of government to actually remove that tax, to try to do what the
05:34government seems to want to do, which is to encourage investment in stocks?
05:37So I think there are a few different aspects to this discussion, and we've been involved in
05:43pushing on a number of them over the last several years. I think the notion of the stamp
05:48tax on the equity markets is one that comes up time and time again. Of course, we'd love to see
05:55that go away. I think it is the wrong incentive structure in terms of having robust trading in
06:03listing in this environment. I think there are other levers as well. And one of the big ones is
06:09pension capital, where the UK, of course, has huge pools of pension capital and, frankly,
06:15under-invest in its own market. And I think there's an opportunity not through mandation,
06:21but there's an opportunity through incentive structures, including the very large tax benefits
06:25that go to the pension funds, of creating, I'll call it a default minimum amount of allocation of
06:32capital to the UK, which could have a big difference, a big impact.
06:35There was work with Rachel Reeves and others, you know, doing that. Have you had contact with John
06:39Healy or Andy Burnham on those points to press those issues that, as you say, are long-running?
06:44This government's talking about, you know, quick changes. Are they going to do something?
06:47So I'm not going to comment on any specific discussions, but I think there are signs of
06:54receptivity in terms of some of the reforms that we've been talking about with respect to pension
07:00capital. So we'll see how that plays out.
07:02Are you more optimistic about changes now than you were with the last government?
07:06I would say a little bit, yes.
07:09Just coming back to the private markets question, given that we're coming up to a year anniversary
07:13for the Pisces framework, what sort of, what looks like success for you in that market?
07:19You've talked about the activity you've already had. What benchmarks are you setting?
07:21Right. So early days still, but I would say already a really good start. And I'd like to
07:28see a healthy ongoing flow of companies accessing that market on a regular basis so that we have
07:35a very healthy public market ecosystem and a very healthy private market ecosystem. And
07:41it's doing well thus far. And I look forward to seeing that continue.
07:45Okay. Just lastly, sort of circling back to what you also said earlier, on the relationship with
07:49Elliott Management now, do investors see that as positive?
07:54Do investors see?
07:55See the relationship between LSEG and Elliott Management as positive?
08:00Oh, I can't really speculate on what our other investors see about that. I would say our own
08:06interaction with them has been really constructive. And we have ongoing dialogue with lots of our
08:12shareholders. Now, our shareholders do have different views on things. Some of our shareholders
08:16have more of a short-term perspective. Some of our shareholders have more of a long-term
08:20perspective. And they don't always agree with each other. But we listen to all of them. And I would
08:25say I have had constructive engagement with that one in particular.
Comments