London Stock Exchange Group interim results for the six months ended 30 September 2010.
* Good financial performance reflecting diversified Group business, with an 11 per cent increase in adjusted earnings per share
* Significant progress achieved in delivering Group strategy to transform business, including roll out of new high performance trading system and a range of product initiatives including plans for trading equity derivatives on Turquoise in the second quarter of 2011
- Total income up one percent at £318.4 million (H1 FY 2010: £314.0 million); Revenue of £297.9 million (H1 FY2010: £301.2 million), down one per cent. On an organic basis and at constant currency all segments except Capital Markets delivered increased revenues
- Operating expenses1 down eight per cent at £165.2 million (H1 FY 2010: £180.2 million)
- Adjusted operating profit1 up 15 per cent at £154.8 million (H1 FY 2010: £134.8 million)
- Profit before tax up 26 per cent at £100.2 million (H1 FY 2010: £79.4 million)
- Basic EPS up 25 per cent at 23.2 pence (H1 FY 2010: 18.5 pence) and adjusted basic EPS up eleven per cent at 32.2 pence (H1 FY 2010: 29.0 pence)
- Interim dividend of 8.8 pence per share, up five per cent (H1 FY 2010 8.4 pence per share)
- Strong net cash inflow from operating activities of £144 million; adjusted net debt down £85 million in the period to £442 million
1) before amortisation of purchased intangibles and exceptional items
All comparisons are against the same corresponding period in the previous year unless stated otherwise
- Roll out of Group's new MillenniumIT technology platform - Turquoise live, other cash equity markets to follow; customers experiencing world beating average latency and performance
- Number of new issues more than doubled on Group's primary markets, with £18 billion capita capital raised, including 19 international companies
- Share of order book trading stabilised in UK cash equities market during the period and average daily UK equity value traded up seven per cent vs H1 last year though yield declined as expected following successful pricing promotions; average daily equity trades in Italy down five per cent over the same period last year
- Trading volumes on Group's fixed income (cash) markets up 21 per cent and derivatives trading volumes on IDEM up 19 per cent
- Significant growth in non-display trading on Turquoise - average daily value traded over €200 million in second quarter during which time it was the number one European dark pool MTF
- Post Trade Services' total income up nine per cent; driven by increased clearing volumes and stronger treasury income from the central counterparty business; CCP services extended to cash collateral management previously performed by the Bank of Italy
- Strong demand for information products, particularly Reference Data, Proquote and FTSE. Expansion of the UnaVista trade matching and confirmation service well received. Real time data professional user figures stable at London Stock Exchange and Borsa Italiana
- Technology Services performed well, with launch of new data centre developments, new client connections and a number of new third party software contract wins for MillenniumIT
Commenting on performance of the Group over the period, Xavier Rolet, Chief Executive said:
"This was a good first half performance, with the uplift in earnings reflecting contributions from our increasingly diversified international exchange business.
"We have seen a significant pick up in IPO activity across our markets, with a more than doubling of the number of new issues in H1, and a continued flow of IPOs in recent weeks indicates an encouraging pipeline. Post Trade, MTS, Technology Services and our Information Services businesses also delivered increased revenues in the period.
"We continue to make real strides in transforming the Group and in particular this half we began to roll out our new, super-fast MillenniumIT trading platform. This is now live on our pan-European MTF, Turquoise, and early feedback from customers has been overwhelmingly positive. The next step will be moving the main UK cash equities market over to the Millennium Exchange platform in early 2011.
"We have made good progress in developing our equity derivatives offering, recently migrating IDEM, our Italian equity derivatives business, onto a significantly enhanced technology platform; and today we can also confirm that we will be launching equity derivatives trading on Turquoise in the second quarter 2011.
"Pursuing growth opportunities, continued delivery on cost reductions, enhancing our competitiveness, driving efficiencies and customer service will remain pivotal to the Group's strategy in the period ahead. There is still much for us to do and, although market conditions are likely to remain mixed, we nonetheless expect to make further progress in the second half of the year."
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