The knock-on effects of the financial crisis have meant bad news for trading volumes at the London Stock Exchange (LSE), something that these figures understate. Strip out a £484m impairment charge relating to the acquisition of Borsa Italiana, and group operating profits fell from last year's £276.1m to £182.3m.
Annual fee income fell from last year's £41m to £35.2m - but this was offset by a 21 per cent rise in admission fees to £34m, largely reflecting a rise in secondary fund raising rather than new issues. Income from UK equity trading fell 35 per cent, partly because investors were less active, but also as a result of growing competition from alternative trading platforms.
LSE responded to that threat in two ways. One was lowering tariff charges to attract new business, which put a further squeeze on margins. The other was buying out rivals; last year, it took over Turquoise and Millennium IT. Through Turquoise, the LSE now has a greater reach and, since the financial year-end, the platform also includes trading in US securities.
Subject to revision, Numis Securities expects pre-tax profits for 2011 of £249m and EPS of 61.4p.
| LONDON STOCK EXCHANGE(LSE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 641p | MARKET VALUE: | £ 1,738m | |
| TOUCH: | 639-641p | 12-MONTH HIGH: | 950p | LOW: 606p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 380p* | NET DEBT: | 39% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 298 | 93.5 | 27.8 | 12.0 |
| 2007 | 350 | 162 | 50.5 | 18.0 |
| 2008 | 546 | 235 | 73.1 | 24.0 |
| 2009 | 645 | -251 | -126 | 24.4 |
| 2010 | 606 | 144 | 33.8 | 24.4 |
| % change | -6 | - | - | - |
Ex-div:21 Jul Payment:16 Aug *Includes intangible assets of £1.48bn or 547p a share | ||||
