LSE in good shape, despite merger uncertainty

Information and post-trade services continued to lead the way in terms of revenue growth. Global clearing business LCH grew its revenue 10 per cent on an organic, constant-currency basis to £357m. This was driven by a significant increase in over-the-counter (OTC) clearing of derivatives contracts through its SwapClear platform. In contrast, increased competition in the equity and derivative markets eroded non-OTC clearing revenue.

The popularity of FTSE Russell indices continued, with subscription and data sales increasing FTSE Russell revenue by 7 per cent. Management says it is running ahead of schedule on its targeted annual synergies of $30m for the business, which it had expected to achieve by the end of 2017. Overall, information services, which provides global indices, real-time pricing data and product identification services, grew organic sales 7 per cent to £595m last year. US corporate information provider Mergent was also added to the fold, increasing the division's footprint in North America.

Macroeconomic uncertainty during the year held back primary market activity. The total amount of capital raised across the group's markets declined more than a third to £26bn. Meanwhile, new issues for the UK main market were 51, compared with 88 during 2015, while there were just three more issues on the alternative market. However, secondary market activity was stronger. The average daily equity value traded on pan-European equities platform Turquoise grew more than a quarter to €5.4bn (£4.7bn). Italian equity trading volumes also increased slightly, while in the UK average daily order books were higher. Overall, revenue and operating profit for this segment were flat.

Numis expects adjusted pre-tax profit of £737m for 2017, giving EPS of 141p (from £623m and 125p in 2016).