Strong financial performance - Q1 total income up 16 per cent to £323.9 million
Revenue increased 20 per cent overall and 12 per cent on an organic and constant currency basis, with growth across nearly all business segments
- Capital Markets revenues up 16 per cent, with strong growth in primary markets as the number of new issues more than doubled; secondary markets benefitted from improvements in fixed income trading and Italian cash equity volumes
- Post Trade Services (Italy) revenues up 4 per cent, and up 8 per cent on an organic and constant currency basis with increases in clearing volumes and within settlement and custody
- LCH.Clearnet total income up 14 per cent on a pro forma, constant currency basis, with good growth in OTC and commodities revenues
- Information Services revenues up 5 per cent, reflecting good performances from FTSE and a number of other services
- Technology Services revenues declined 8 per cent, mainly as the result of the phasing of customer deliveries
- The Group announced the proposed acquisition of Frank Russell Company on 26 June 2014; preparation of a Circular for a shareholder meeting and a Prospectus for the accompanying rights issue is underway, with posting expected in late August
Commenting on performance in Q1, Xavier Rolet, Chief Executive, said:
"We have made good progress in the first quarter, delivering a strong financial performance reflecting organic growth and inorganic revenues across the Group. We have been pleased by the continued resurgence in the IPO market with an increase both in the number of companies joining our markets and the amount of money raised.
"The proposed acquisition of Russell Investments will also help to expand the global footprint of the Group, particularly in the key U.S. market. This is a strong strategic acquisition for the Group, which will accelerate development in one of our core strengths, intellectual property, and offers significant growth potential. In the coming months, we will focus on obtaining the necessary approvals to complete the acquisition and to deliver the financial benefits of the transaction to the Group."
Financial Position
Prior to the announcement of the proposed acquisition of Frank Russell Company, the Group put in place new, committed, multicurrency revolving credit facilities of £600 million for a term of up to 3 years. The new facilities have been arranged on similar terms to the Group's existing £700 million syndicated deal, signed in July 2013, and are available for part financing the Russell transaction. Other than these new arrangements, and normal scheduled coupon payments on longer term debt in the quarter, there are no material changes to the Group's financial position since the financial year end.
The euro weakened against sterling compared with the same period last year, from €1.18 to €1.23. To illustrate our exposure to movements in this exchange rate, a €0.05 change in the average euro:sterling rate would have resulted in a change to total income of c£7.3 million for Q1
Current trading and outlook
The Group has made good progress in the start to the new financial year. As we enter the seasonally quieter summer period, the Group remains well placed to benefit from continued positive market trends through its increasingly diversified businesses and from the work to realise the previously announced integration synergies at LCH.Clearnet Group.
The Group expects to provide interim financial results for the period to 30 June 2014 at the time of the release of the Prospectus in connection with the acquisition of Frank Russell Company.
Further information is available from:
|
London Stock Exchange Group plc
|
Gavin Sullivan - Media
Paul Froud - Investor Relations
|
+44 (0) 20 7797 1222
+44 (0) 20 7797 3322
|
|
|
|
|
|
RLM Finsbury
|
David Henderson / Mike Turner
|
+44 (0) 20 7251 3801
|
A conference call for analysts and investors will be held at 9:00 (UK time) on Wednesday 16th July. On the call will be David Warren (CFO) and Paul Froud (Head of Investor Relations).
To access the Telephone conference call dial 0800 376 7922 or +44 (0) 2071 928 000
Conference ID: 7330 9625
Q1 Revenue Summary
Revenues for three months ended 30 June 2014, with comparatives against performance for the same period last year, are provided below. Growth rates for performance are also expressed on an organic and constant currency basis. All figures are unaudited.
|
|
|
|
Organic and
|
|
Three months ended
|
|
constant
|
|
30 June
|
|
currency
|
|
2014
|
2013
|
Variance
|
variance1
|
|
£m
|
£m
|
%
|
%
|
|
Revenue
|
|
|
|
|
|
Capital Markets
|
87.0
|
75.0
|
16%
|
14%
|
|
Post Trade Services
|
26.0
|
25.1
|
4%
|
8%
|
|
LCH.Clearnet 2
|
83.2
|
49.0
|
70%
|
21%
|
|
Information Services
|
88.0
|
83.9
|
5%
|
7%
|
|
Technology Services
|
14.3
|
15.5
|
(8%)
|
(2%)
|
|
Other
|
1.4
|
1.2
|
17%
|
17%
|
|
Total revenue
|
299.9
|
249.7
|
20%
|
12%
|
|
|
|
|
|
|
Net treasury income through CCP business
|
|
|
|
|
CC&G
|
7.5
|
16.7
|
(55%)
|
(53%)
|
|
LCH.Clearnet 2
|
15.1
|
11.7
|
29%
|
(13%)
|
|
Other income
|
1.4
|
2.1
|
(33%)
|
(30%)
|
|
LCH.Clearnet unrealised gain / (loss)
|
0.7
|
(1.2)
|
-
|
-
|
|
Total income including unrealised
|
324.6
|
279.0
|
16%
|
7%
|
|
Total income excluding unrealised
|
323.9
|
280.2
|
16%
|
7%
|
1Exchange rates for the relevant period are detailed at the end of this section
Adjustments to calculate organic growth:
1) Removal of EuroTLX and Bonds.com revenue (Capital Markets - Fixed Income)
2) LCH.Clearnet pro forma for three months
3) MTS Indices remove from Capital Markets Fixed Income revenue and include in Information Services FTSE revenue
2LCH.Clearnet represents two months ended 30 June 2013
More detailed revenues by segment are provided in tables below:
Capital Markets
|
|
|
|
Organic and
|
|
Three months ended
|
|
constant
|
|
30 June
|
|
currency
|
|
2014
|
2013
|
Variance
|
variance1
|
|
Revenue
|
£m
|
£m
|
%
|
%
|
|
Primary Markets
|
|
|
|
|
|
Annual fees
|
11.0
|
10.0
|
10%
|
11%
|
|
Admission fees
|
14.3
|
9.5
|
51%
|
52%
|
|
|
25.3
|
19.5
|
30%
|
31%
|
|
Secondary Markets
|
|
|
|
|
|
Cash equities UK & Turquoise
|
24.5
|
24.2
|
1%
|
1%
|
|
Cash equities Italy
|
10.0
|
8.6
|
16%
|
20%
|
|
Derivatives
|
4.9
|
5.0
|
(2%)
|
2%
|
|
Fixed income
|
19.9
|
15.5
|
28%
|
10%
|
|
|
59.3
|
53.3
|
11%
|
7%
|
|
Other
|
2.4
|
2.2
|
9%
|
14%
|
|
Total revenue
|
87.0
|
75.0
|
16%
|
14%
|
1 Removal of EuroTLX and Bonds.com revenue (Capital Markets - Fixed Income) and
MTS Indices removed from Capital Markets Fixed Income revenue and included in Information Services FTSE revenue
Post Trade Services
|
Three months ended
|
|
Constant
|
|
30 June
|
|
currency
|
|
2014
|
2013
|
Variance
|
variance
|
|
£m
|
£m
|
%
|
%
|
|
Revenue
|
|
|
|
|
|
Clearing
|
10.2
|
10.1
|
1%
|
5%
|
|
Settlement
|
5.0
|
4.4
|
14%
|
19%
|
|
Custody & other
|
10.8
|
10.6
|
2%
|
6%
|
|
Total revenue
|
26.0
|
25.1
|
4%
|
8%
|
|
Net treasury income
|
7.5
|
16.7
|
(55%)
|
(53%)
|
|
Total income
|
33.5
|
41.8
|
(20%)
|
(17%)
|
LCH.Clearnet
|
|
|
|
Organic and
|
|
Three months ended
|
|
constant
|
|
30 June
|
|
currency
|
|
2014
|
20132
|
Variance
|
variance1
|
|
Revenue
|
£m
|
£m
|
%
|
%
|
|
OTC
|
|
|
|
|
|
SwapClear
|
26.8
|
14.9
|
80%
|
25%
|
|
ForexClear / CDSClear
|
7.3
|
2.7
|
170%
|
85%
|
|
|
34.1
|
17.6
|
94%
|
34%
|
|
Non-OTC
|
|
|
|
|
|
Fixed income
|
11.6
|
5.4
|
115%
|
53%
|
|
Commodities
|
14.1
|
4.4
|
220%
|
164%
|
|
Listed derivatives
|
9.5
|
12.4
|
(23%)
|
(48%)
|
|
Cash equities
|
8.4
|
6.2
|
35%
|
(3%)
|
|
|
43.6
|
28.4
|
54%
|
9%
|
|
Total Clearing fee revenue
|
77.7
|
46.0
|
69%
|
19%
|
|
Other
|
5.5
|
3.0
|
83%
|
63%
|
|
Total revenue
|
83.2
|
49.0
|
70%
|
21%
|
|
Net treasury income
|
15.1
|
11.7
|
29%
|
(13%)
|
|
Unrealised gain / (loss)
|
0.7
|
(1.2)
|
-
|
-
|
|
Total income including unrealised
|
99.0
|
59.5
|
66%
|
16%
|
|
Total income excluding unrealised
|
98.3
|
60.7
|
62%
|
14%
|
1Pro forma represents three months ended 30 June 2013
2LCH.Clearnet 2013 represents two months ended 30 June 2013
Information Services
|
|
|
|
Organic and
|
|
Three months ended
|
|
constant
|
|
30 June
|
|
currency
|
|
2014
|
2013
|
Variance
|
variance1
|
|
£m
|
£m
|
%
|
%
|
|
Revenue
|
|
|
|
|
|
FTSE
|
44.4
|
41.7
|
6%
|
8%
|
|
Real time data
|
21.3
|
22.4
|
(5%)
|
(3%)
|
|
Other information services
|
22.3
|
19.8
|
13%
|
14%
|
|
Total revenue
|
88.0
|
83.9
|
5%
|
7%
|
1 MTS Indices removed from Capital Markets Fixed Income revenue and included in Information Services FTSE revenue
Technology Services
|
|
|
|
Organic and
|
|
Three months ended
|
|
constant
|
|
30 June
|
|
currency
|
|
2014
|
2013
|
Variance
|
variance
|
|
£m
|
£m
|
%
|
%
|
|
Revenue
|
|
|
|
|
|
MillenniumIT
|
6.0
|
7.4
|
(19%)
|
(9%)
|
|
Technology
|
8.3
|
8.1
|
2%
|
4%
|
|
Total revenue
|
14.3
|
15.5
|
(8%)
|
(2%)
|
Basis of Preparation
Results for Borsa Italiana and LCH.Clearnet for the period ended 30 June 2014 have been translated into Sterling using the average monthly exchange rate for the period of €1.23: £1. Constant currency growth rates have been calculated by translating prior period results at the average exchange rate for the current period.
|
Average €:£ rate
3 months ended
30 June 2014
|
Closing €:£ rate at 30 June 2014
|
Average €:£ rate
3 months ended
30 June 2013
|
Closing €:£ rate at 30 June 2013
|
|
|
|
|
|
|
€ 1.23
|
€ 1.25
|
€ 1.18
|
€ 1.18
|
Appendix - Key performance indicators
|
Capital Markets - Primary Markets
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
30 June
|
Variance
|
|
2014
|
|
2013
|
%
|
|
New Issues
|
|
|
|
|
|
UK Main Market, PSM & SFM
|
33
|
|
12
|
175%
|
|
UK AIM
|
38
|
|
18
|
111%
|
|
Borsa Italiana
|
7
|
|
3
|
133%
|
|
Total
|
78
|
|
33
|
136%
|
|
|
|
|
|
|
Company Numbers (as at period end)
|
|
|
|
|
|
UK Main Market, PSM & SFM
|
1,371
|
|
1,365
|
0%
|
|
UK AIM
|
1,104
|
|
1,085
|
2%
|
|
Borsa Italiana
|
297
|
|
283
|
5%
|
|
Total
|
2,772
|
|
2,733
|
1%
|
|
|
|
|
|
|
Market Capitalisation (as at period end)
|
|
|
|
|
|
UK Main Market (£bn)
|
2,270
|
|
2,088
|
9%
|
|
UK AIM (£bn)
|
78
|
|
62
|
26%
|
|
Borsa Italiana (€bn)
|
499
|
|
354
|
41%
|
|
Borsa Italiana (£bn)
|
400
|
|
300
|
33%
|
|
Total (£bn)
|
2,748
|
|
2,450
|
12%
|
|
|
|
|
|
|
Money Raised (£bn)
|
|
|
|
|
|
UK New
|
7.6
|
|
2.0
|
280%
|
|
UK Further
|
4.8
|
|
2.6
|
85%
|
|
Borsa Italiana new and further
|
7.5
|
|
0.3
|
2400%
|
|
Total (£bn)
|
19.9
|
|
4.9
|
306%
|
|
Capital Markets - Secondary Markets
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
30 June
|
Variance
|
|
Equity
|
2014
|
|
2013
|
%
|
|
Totals for period
|
|
|
|
|
|
UK value traded (£bn)
|
265
|
|
275
|
(4%)
|
|
Borsa Italiana (no of trades m)
|
16.9
|
|
14.3
|
18%
|
|
Turquoise value traded (€bn)
|
241.4
|
|
175.1
|
38%
|
|
|
|
|
|
|
SETS Yield (basis points)
|
0.66
|
|
0.66
|
0%
|
|
|
|
|
|
|
Average daily
|
|
|
|
|
|
UK value traded (£bn)
|
4.2
|
|
4.4
|
(5%)
|
|
Borsa Italiana (no of trades '000)
|
272
|
|
227
|
20%
|
|
Turquoise value traded (€bn)
|
3.83
|
|
2.74
|
40%
|
|
|
|
|
|
|
Derivatives (contracts m)
|
|
|
|
|
|
LSE Derivatives
|
2.8
|
|
3.7
|
(24%)
|
|
IDEM
|
8.8
|
|
8.1
|
9%
|
|
Total
|
11.6
|
|
11.8
|
(2%)
|
|
|
|
|
|
|
Fixed Income
|
|
|
|
|
|
MTS cash and Bondvision (€bn)
|
1,098
|
|
807
|
36%
|
|
MTS money markets (€bn term adjusted)
|
19,997
|
|
19,491
|
3%
|
|
MOT number of trades (m)
|
1.43
|
|
1.75
|
(18%)
|
|
Post Trade Services
|
|
|
|
|
|
CC&G and Monte Titoli
|
|
|
|
|
|
Three months ended
|
|
30 June
|
Variance
|
|
2014
|
|
2013
|
%
|
|
CC&G Clearing (m)
|
|
|
|
|
|
Equity clearing (no of trades)
|
17.6
|
|
15.2
|
16%
|
|
Derivative clearing (no of contracts)
|
8.8
|
|
8.1
|
9%
|
|
Total
|
26.4
|
|
23.3
|
13%
|
|
Open interest (contracts as at period end)
|
4.4
|
|
3.9
|
13%
|
|
Initial margin held (average €bn)
|
10.3
|
|
12.4
|
(17%)
|
|
|
|
|
|
|
Monte Titoli
|
|
|
|
|
|
Pre Settlement instructions (trades m)
|
8.5
|
|
7.0
|
21%
|
|
Settlement instructions (trades m)
|
9.9
|
|
7.4
|
34%
|
|
Total Settlement
|
18.4
|
|
14.4
|
28%
|
|
Custody assets under management (average €tn)
|
3.40
|
|
3.28
|
4%
|
|
LCH.Clearnet
|
|
|
|
|
|
Three months ended
|
|
30 June
|
Variance
|
|
2014
|
|
2013
|
%
|
|
|
|
|
|
|
OTC derivatives
|
|
|
|
|
|
SwapClear
|
|
|
|
|
|
IRS notional outstanding ($trn)
|
419
|
|
391
|
7%
|
|
IRS notional cleared ($trn)
|
181.3
|
|
127.2
|
43%
|
|
SwapClear members
|
106
|
|
83
|
28%
|
|
CDSClear
|
|
|
|
|
|
Open interest (€bn)
|
31.0
|
|
13.2
|
135%
|
|
Notional cleared (€bn)
|
19.5
|
|
44.5
|
(56%)
|
|
CDSClear members
|
9
|
|
11
|
(18%)
|
|
ForexClear
|
|
|
|
|
|
Notional value cleared ($bn)
|
212.2
|
|
263.3
|
(19%)
|
|
ForexClear members
|
20
|
|
15
|
33%
|
|
Non-OTC
|
|
|
|
|
|
Fixed income - Nominal value (€trn)
|
18.6
|
|
18.6
|
0%
|
|
Commodities (lots m)
|
46.3
|
|
34.3
|
35%
|
|
Listed derivatives (contracts m)
|
42.7
|
|
42.6
|
0%
|
|
Cash equities trades (m)
|
103.8
|
|
89.9
|
15%
|
|
|
|
|
|
|
Average cash collateral (€bn)
|
46.5
|
|
41.5
|
12%
|
|
Information Services
|
|
|
|
|
|
As at
|
|
|
30 June
|
Variance
|
|
2014
|
|
2013
|
%
|
|
UK Terminals
|
|
|
|
|
|
Professional - UK
|
32,000
|
|
33,000
|
(3%)
|
|
Professional - International
|
47,000
|
|
48,000
|
(2%)
|
|
Total
|
79,000
|
|
81,000
|
(2%)
|
|
|
|
|
|
|
Borsa Italiana Professional Terminals
|
132,000
|
|
138,000
|
(4%)
|
|
FTSE ETFs assets under management benchmarked ($bn)
|
213
|
|
163
|
31%
|
Total Income - Quarterly
|
FY 2014
|
|
|
|
|
FY 2015
|
|
£ millions
|
Q1
|
Q2
|
Q3
|
Q4
|
FY 2014
|
Q1
|
|
|
|
|
|
|
|
|
Annual Fees
|
10.0
|
10.3
|
10.2
|
10.7
|
41.2
|
11.0
|
|
Admission Fees
|
9.5
|
7.6
|
12.8
|
10.0
|
39.9
|
14.3
|
|
Cash equities UK & Turquoise
|
24.2
|
22.2
|
21.7
|
26.4
|
94.5
|
24.5
|
|
Cash equities Italy
|
8.6
|
8.6
|
9.0
|
9.9
|
36.1
|
10.0
|
|
Derivatives
|
5.0
|
4.7
|
4.9
|
5.0
|
19.6
|
4.9
|
|
Fixed Income
|
15.5
|
14.5
|
18.4
|
19.7
|
68.1
|
19.9
|
|
Other
|
2.2
|
2.3
|
3.1
|
2.5
|
10.1
|
2.4
|
|
Capital Markets
|
75.0
|
70.2
|
80.1
|
84.2
|
309.5
|
87.0
|
|
|
|
|
|
|
|
|
Clearing
|
10.1
|
9.0
|
10.4
|
10.5
|
40.0
|
10.2
|
|
Settlement
|
4.4
|
3.4
|
4.2
|
4.4
|
16.4
|
5.0
|
|
Custody & other
|
10.6
|
10.6
|
10.6
|
10.2
|
42.0
|
10.8
|
|
Post Trade Services
|
25.1
|
23.0
|
25.2
|
25.1
|
98.4
|
26.0
|
|
2 months
|
|
|
|
|
|
|
OTC - SwapClear
|
14.9
|
26.3
|
24.5
|
25.8
|
91.5
|
26.8
|
|
OTC - ForexClear / CDSClear
|
2.7
|
4.0
|
4.0
|
7.4
|
18.1
|
7.3
|
|
Fixed income
|
5.4
|
8.4
|
7.0
|
11.0
|
31.8
|
11.6
|
|
Commodities
|
4.4
|
9.1
|
9.3
|
11.3
|
34.1
|
14.1
|
|
Listed derivatives
|
12.4
|
11.2
|
11.5
|
12.9
|
48.0
|
9.5
|
|
Cash equities
|
6.2
|
8.2
|
8.7
|
9.3
|
32.4
|
8.4
|
|
Other
|
3.0
|
(5.0)
|
(3.8)
|
12.9
|
7.1
|
5.5
|
|
LCH.Clearnet
|
49.0
|
62.2
|
61.2
|
90.6
|
263.0
|
83.2
|
|
|
|
|
|
|
|
|
FTSE
|
41.7
|
42.2
|
44.2
|
45.9
|
174.0
|
44.4
|
|
Real time data
|
22.4
|
22.1
|
23.0
|
23.3
|
90.8
|
21.3
|
|
Other information
|
19.8
|
20.1
|
21.2
|
22.8
|
83.9
|
22.3
|
|
Information Services
|
83.9
|
84.4
|
88.4
|
92.0
|
348.7
|
88.0
|
|
|
|
|
|
|
|
|
MillenniumIT
|
7.4
|
5.7
|
7.9
|
10.5
|
31.5
|
6.0
|
|
Technology
|
8.1
|
8.2
|
8.1
|
8.1
|
32.5
|
8.3
|
|
Technology Services
|
15.5
|
13.9
|
16.0
|
18.6
|
64.0
|
14.3
|
|
|
|
|
|
|
|
|
Other
|
1.2
|
0.8
|
1.4
|
1.3
|
4.7
|
1.4
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
249.7
|
254.5
|
272.3
|
311.8
|
1,088.3
|
299.9
|
|
Net treasury income through CCP:
|
|
|
|
|
|
|
|
CC&G
|
16.7
|
11.4
|
10.1
|
9.4
|
47.6
|
7.5
|
|
LCH.Clearnet
|
11.7
|
18.8
|
17.6
|
14.1
|
62.2
|
15.1
|
|
Other income
|
2.1
|
2.2
|
8.9
|
1.8
|
15.0
|
1.4
|
|
LCH.Clearnet unrealised gain / (loss)
|
(1.2)
|
(0.8)
|
(0.9)
|
(0.6)
|
(3.5)
|
0.7
|
|
Total income including unrealised
|
279.0
|
286.1
|
308.0
|
336.5
|
1,209.6
|
324.6
|
|
Total income excluding unrealised
|
280.2
|
286.9
|
308.9
|
337.1
|
1,213.1
|
323.9
|