In summary, the enlarged Group has delivered an excellent overall performance, reflecting strong organic growth and the merger with Borsa Italiana:
- Revenue up 56 per cent to £546.4 million; and adjusted operating profit (before exceptional items and amortisation of purchased intangibles) up 56 per cent to £289.0 million
- Operating profit including exceptional items and amortisation up 52 per cent to £265.2 million and basic earnings per share up 45 per cent to 73.1 pence
- Adjusted basic earnings per share up 30 per cent to 73.1 pence
- Cash generated from ongoing operating activities, and inclusion of Borsa Italiana for 6 months, up 42 per cent to £282.7 million
- Total dividend for the year up 33 per cent to 24.0 pence per share
- £139 million returned to shareholders through share buyback programmes
Financial highlights - Pro forma:
(As if Borsa Italiana had been acquired on 1 April 2006, with translation of prior year using the same average exchange rate as the year ended 31 March 2008)
- Revenue increased 15 per cent to £666.8 million; pro forma adjusted operating profit up 27 per cent to £343.0 million
- Adjusted basic earnings per share up 29 per cent to 72.9 pence
Commenting on the results, Chris Gibson-Smith, Chairman of the London Stock Exchange, said: "This has been another year of considerable achievement from both a financial and strategic perspective. In financial terms, the Exchange performed strongly with adjusted basic earnings per share 30 per cent higher at 73.1 pence per share. In strategic terms the company has continued to invest in long term growth as well as successfully completing the merger with Borsa Italiana. In light of these excellent financial results and our confidence in the future, the Board intends to pay a total dividend for the year of 24 pence per share, an increase of 33 per cent."
Clara Furse, Chief Executive of the Exchange, said: "The Exchange has delivered excellent results, with, with each division recording strong growth, despite more re testing conditions towards the end of the year. In particular, Trading Services delivered an exceptional performance, following the successful launch of TradElect, the Exchange's new trading platform, as trading volumes increased by more than eighty per cent during the year.
"The merger with Borsa Italiana diversifies our business, with a number of new assets and products that will accelerate our international development. Our integration is on track and we expect to deliver at least the synergies as announced last year.
"In a dynamic market environment, we are confident of achieving further growth this year."
Operational highlights of the year (pro forma data):
- Completion of merger with Borsa Italiana to create Europe's leading diversified exchange Group - good progress made on integration and expect to deliver approximately half of the £40 million synergies in the current financial year, with full run rate cost synergies by the start of next year
- Successful launch of our new high capacity and low latency trading system, TradElect, helped to deliver an 82 per cent increase in average daily SETS bargains to 642,000 - with record levels of trading in the final quarter of the financial year - and a 39 per cent increase in average daily SETS value traded to £9.1bn
- Cash equities trading in Italy up 20 per cent to an average 290,000 trades per day over the year, and migration to new TradElect platform planned for end of calendar 2008
- Commenced development of exchange traded CFDs on a combined order book offering single point of access for both cash equities and CFDs; and further upgrades to trading system planned during coming year to enhance functionality and speed
- Good overall primary market activity with a total of 411 new issues in London and Milan, and underlining London's pre-eminent position with 128 international companies joining our markets, with more international IPOs than the other major European and US exchanges combined
- Number of new initiatives to develop international business, including announcement with Tokyo Stock Exchange of intention to create new market for growth companies; and opening of representative office in Beijing to extend international reach in this important region;
- Total terminals taking LSE data up 22,000 to record 138,000, of which terminals attributable to professional users up 16,000 to 112,000; Professional users of Italian data up 13,000 to 160,000
- Plans announced for post-trade router to reduce cost of clearing services and enable settlement netting, based on X-TRM router used in Borsa Italiana
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