London Stock Exchange posts higher profits

London Stock Exchange increased profits by almost two thirds last year despite lower revenues in its core share trading business as competition from newer rivals intensified.

The Exchange, which announced a merger with the Toronto Stock Exchange in February, posted profits of £268m (€305m), up 65%, in the year to March. One-off charges fell from £98m(€111.5m) to £58m (€66m), while underlying profits rose by 22% to £341m (€388m).

Revenues were up 2% to £616m (€700.7m), but turnover in its core capital markets operation fell by 5% to £282m (€321m) as the Exchange cut prices to tackle competition from start-up rivals such as BATS Europe and Chi-X.

Trading revenues though the London market reflected that and tumbled 15% to £86m (€97.8m) even though the daily volume of shares traded rose by 2% to £4.7bn (€5.3bn) and its market share rose to 63.5% to from 61.4%.

New admissions provided some offset, with £13bn (€14.8bn) raised from a total of 185 floats nearly three times the previous year and helped by junior market AIM. The pipeline of prospective new issues also looks promising, it added today.

Next week should see commodities trading giant Glencore list in the largest single company float ever seen in London with up to an estimated $11bn (€7.7bn) worth of shares sold. The trading company yesterday dismissed speculation that recent turbulence in commodity and metal prices could see the listing postponed.