The failure of its proposed merger with rival Deutsche Börse (de: DB1) doesn’t seem to have taken the wind out of London Stock Exchange's (LSE) sails. During the first six months of the year, its indices and post-trade services continued to be the jewels in the crown.
Management has expanded the group's reach geographically and via product lines. It acquired US-based data and analytics business Mergent, as well as The Yieldbook and Citi Index businesses from Citigroup (US:C), hoping to gain traction in fixed-income data and indexation. The FTSE Russell indices continued to prove popular, growing revenue 16 per cent on an organic, constant currency basis. The amount of exchange-traded fund assets benchmarked by these indices was up more than a third to $530bn.
The clearing of over-the-counter derivatives continued to be strong. SwapClear saw client trades increase by a third, and members of the platform up from 102 to 106; while ForexClear saw members up from 23 to 27. Overall revenue at LCH, the post-trade services business, was up 17 per cent at constant currencies.
Primary capital markets revenue was up 5 per cent at fixed currencies thanks to a doubling of new money raised on the UK and Italian markets. However, this was offset by a reduction in trading of derivative contracts and equity traded on its secondary markets platform.
Analysts at Numis expect adjusted pre-tax profits of £754m during the 12 months to December 2017, giving EPS of 146p (2016: £623m, 122p).
| LONDON STOCK EXCHANGE GROUP (LSE) | ||||
| ORD PRICE: | 3,892p | MARKET VALUE: | £ 13.5bn | |
| TOUCH: | 3,892-3,893p | 12-MONTH HIGH: | 3,931p | LOW: 2,611p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 45 | |
| NET ASSET VALUE: | 858p* | NET DEBT: | 5% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 722 | 164 | 27.4 | 12 |
| 2017 | 853 | 277 | 50.4 | 14.4 |
| % change | +18 | +69 | +84 | +20 |
| Ex-div: | 24 Aug | |||
| Payment: | 19 Sep | |||
| *Includes intangible assets of £4.2bn, or 1,208p a share | ||||
