TIDMLSE TIDMLSEB
RNS Number : 0568M
London Stock Exchange Group PLC
22 January 2009
22 January 2009
LONDON STOCK EXCHANGE GROUP plc
INTERIM MANAGEMENT STATEMENT
FOR THE THREE MONTHS ENDED 31 DECEMBER 2008
Highlights:
Three months to 31 December 2008:
+----------+--------------+
| * | Revenue |
| | up four |
| | per cent |
| | to |
| | GBP171.0 |
| | million; |
| | down |
| | three |
| | per cent |
| | at |
| | constant |
| | currency |
| | |
+----------+--------------+
| * | SETS |
| | volumes |
| | continued |
| | to grow, |
| | increasing |
| | 20 per |
| | cent to |
| | 777,000 |
| | trades per |
| | day, |
| | driven by |
| | a very |
| | strong |
| | October. |
| | SETS value |
| | traded |
| | declined |
| | 30 per |
| | cent, set |
| | against an |
| | average 34 |
| | per cent |
| | fall in |
| | the FTSE |
| | 100 |
| | compared |
| | to the |
| | prior |
| | period. |
| | Trading |
| | volume at |
| | Borsa |
| | Italiana |
| | was seven |
| | per cent |
| | lower at |
| | 253,000 |
| | trades per |
| | day |
| | |
+----------+--------------+
| * | Money |
| | raised |
| | on the |
| | Group's |
| | markets |
| | was up |
| | 145 per |
| | cent to |
| | GBP29.7 |
| | billion, |
| | the |
| | second |
| | highest |
| | quarter |
| | on |
| | record - |
| | mainly |
| | comprising |
| | GBP27.8 |
| | billion |
| | raised in |
| | secondary |
| | issues in |
| | London |
| | |
+----------+--------------+
| * | Demand |
| | for LSE |
| | real |
| | time |
| | data |
| | remained |
| | resilient |
| | with |
| | 111,000 |
| | professional |
| | users of LSE |
| | information, |
| | up 4,000 |
| | over last |
| | year |
| | although |
| | 1,000 down |
| | since the |
| | half year; |
| | professional |
| | terminals |
| | receiving |
| | Borsa |
| | Italiana |
| | data were |
| | 3,000 down |
| | on last year |
| | to 155,500, |
| | and 5,500 |
| | down on the |
| | number at |
| | the half |
| | year |
| | |
+----------+--------------+
| * | Post |
| | Trade |
| | Services |
| | revenues |
| | increased |
| | 60 per |
| | cent to |
| | GBP30.9 |
| | million |
| | as a |
| | result of |
| | an |
| | increase |
| | in margin |
| | and |
| | reserve |
| | fund |
| | deposits, |
| | and the |
| | strength |
| | of the |
| | Euro |
| | (revenue |
| | up 34 per |
| | cent at |
| | constant |
| | currency) |
| | |
+----------+--------------+
| * | Italian |
| | cash |
| | equities |
| | market |
| | successfully |
| | migrated to |
| | TradElect in |
| | early |
| | November; |
| | overall |
| | integration |
| | programme is |
| | on schedule |
| | to deliver |
| | the |
| | increased |
| | synergies |
| | announced at |
| | the Interim |
| | results |
+----------+--------------+
Nine months year to date:
+----------+-------------+
| * | Revenue |
| | up five |
| | per cent |
| | to |
| | GBP516.5 |
| | million; |
| | a one |
| | per cent |
| | decrease |
| | on a pro |
| | forma |
| | basis at |
| | constant |
| | currency |
| | |
+----------+-------------+
| * | SETS |
| | volumes |
| | up 28 |
| | per cent |
| | to |
| | 752,000 |
| | trades |
| | per day. |
| | SETS |
| | value |
| | traded |
| | declined |
| | 12 per |
| | cent, a |
| | resilient |
| | performance |
| | set against |
| | an average |
| | 19 per cent |
| | fall in the |
| | FTSE 100 |
| | over the |
| | comparative |
| | period. |
| | Trading |
| | volume at |
| | Borsa |
| | Italiana |
| | was eight |
| | per cent |
| | lower at |
| | 259,000 |
| | trades per |
| | day |
| | |
+----------+-------------+
| * | Money |
| | raised |
| | on the |
| | Group's |
| | markets |
| | increased |
| | 74 per |
| | cent to |
| | GBP73.3 |
| | billion - |
| | principally |
| | comprising |
| | GBP61.7 |
| | billion in |
| | secondary |
| | issues in |
| | London |
| | |
+----------+-------------+
| * | Revenues |
| | from |
| | Information |
| | Services up |
| | 16 per cent |
| | to GBP136.9 |
| | million, |
| | partly |
| | reflecting |
| | the overall |
| | increase in |
| | terminals |
| | taking real |
| | time data |
| | over the |
| | comparable |
| | period |
| | |
+----------+-------------+
Commenting on performance in the past quarter, Clara Furse, Chief Executive
said:
"The Exchange has delivered a good overall performance in what are very
difficult conditions for financial markets. Capital raising on our markets in
the UK has been strong with a near record in terms of money raised in the
quarter, and while new issues remain subdued we are seeing a continued flow of
secondary issues.
"Trading in the past quarter, in common with other major markets, became weaker,
mainly reflecting the 34 per cent fall in average value of the FTSE 100 and a 47
per cent average reduction in the S&P MIB index equity market. However, we are
pleased to have successfully introduced TradElect in Italy during the period, to
quickly move to a common trading platform for our major cash equity
markets."
Financial results
London Stock Exchange Group plc (the "Exchange") today reports results for the
three months ended 31 December 2008, with comparatives against actual
performance last year. A summary of performance for the nine months to date is
also provided with comparative period data provided on a pro forma basis as if
Borsa Italiana had been acquired on 1 April 2007 ("pro forma basis"). Growth
rates for both Q3 and year to date performance are also expressed on a constant
currency basis. All figures are unaudited.
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| | Three months | | Variance | Nine months | | Variance |
| | ended | | at | ended | | at |
+-------------+------------------+----------+-----------+------------------+----------+-----------+
| | 31 December | | constant | 31 December | | constant |
+-------------+------------------+----------+-----------+------------------+----------+-----------+
| | 2008 | | 2007 | Variance | currency | 2008 | | 2007 | Variance | currency |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| | GBPm | | GBPm | % | % | GBPm | | GBPm | % | % |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Revenue | | | | | | | | | | |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Issuer | 22.5 | | 25.1 | -10% | -15% | 71.9 | | 76.2 | -6% | -10% |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Trading | 64.8 | | 74.2 | -13% | -17% | 215.9 | | 227.2 | -5% | -9% |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Information | 47.1 | | 41.1 | 15% | 9% | 136.9 | | 118.1 | 16% | 12% |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Post | 30.9 | | 19.3 | 60% | 34% | 77.6 | | 60.3 | 29% | 12% |
| Trade | | | | | | | | | | |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Other | 5.7 | | 4.7 | 21% | 10% | 14.2 | | 11.6 | 22% | 15% |
| income | | | | | | | | | | |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Total | 171.0 | | 164.4 | 4% | -3% | 516.5 | | 493.4 | 5% | -1% |
| revenue | | | | | | | | | | |
+-------------+-------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
Good performance in the Information and Post Trade businesses helped deliver a
four per cent increase in third quarter revenues of GBP171.0 million, assisted
also by a 19 per cent appreciation of the Euro against Sterling during the
period (revenues three per cent lower in constant currency). Issuer and Trading
Services reflected the market slowdown in Q3, resulting from the continued
effects of the crisis in financial markets.
The same general trends are reflected in the performance for the nine months to
date with Group revenue up five per cent to GBP516.5 million (revenues one per
cent lower in constant currency).
Issuer Services
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| | Three months | | Variance | Nine months | | Variance |
| | ended | | at | ended | | at |
+-------------+-------------------+----------+-----------+------------------+----------+-----------+
| | 31 December | | constant | 31 December | | constant |
+-------------+-------------------+----------+-----------+------------------+----------+-----------+
| | 2008 | | 2007 | Variance | currency | 2008 | | 2007 | Variance | currency |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| | GBPm | | GBPm | % | % | GBPm | | GBPm | % | % |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Revenue | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Annual fees | 10.3 | | 10.2 | 1% | -6% | 31.1 | | 30.4 | 2% | -3% |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Admission | 5.8 | | 8.7 | -33% | -36% | 22.5 | | 28.6 | -21% | -23% |
| fees | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| RNS, other | 6.4 | | 6.1 | 5% | -4% | 18.3 | | 17.2 | 6% | 0% |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Revenue | 22.5 | | 25.1 | -10% | -15% | 71.9 | | 76.2 | -6% | -10% |
| GBPm | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
Reflecting the difficult market environment for IPO capital raising resulting
from the global crisis in financial markets, Issuer Services saw a decline in
new issue activity in the third quarter, with revenue down 10 per cent to
GBP22.5 million, contributing 13 per cent of total Group revenue.
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| | Three months | | | Nine months | |
| | ended | | | ended | |
+-------------------------------+-----------------+-------+--+-----------------+------+
| | 31 December | | | 31 December | |
+-------------------------------+-----------------+-------+--+-----------------+------+
| | 2008 | 2007 | | | 2008 | 2007 | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| New Issues | | | | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Main Market, PSM & SFM | 12 | 34 | -65% | | 61 | 107 | -43% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| AIM | 22 | 67 | -67% | | 82 | 230 | -64% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Borsa Italiana | 1 | 7 | -86% | | 5 | 30 | -83% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Total | 35 | 108 | -68% | | 148 | 367 | -60% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Company Numbers (as at 31 | | | | | | | |
| December) | | | | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Main Market, PSM & SFM | 1,546 | 1,613 | -4% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| AIM | 1,550 | 1,694 | -9% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Borsa Italiana | 300 | 307 | -2% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Total | 3,396 | 3,614 | -6% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Market capitalisation (as at | | | | | | | |
| 31 December) | | | | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Main Market (UK only) (GBPbn) | 1,288 | 1,932 | -33% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| AIM (GBPbn) | 38 | 98 | -61% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Borsa Italiana (EURbn) | 375 | 734 | -49% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Borsa Italiana (GBPbn) | 339 | 529 | -36% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Total (GBPbn) | 1,665 | 2,559 | -35% | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| IPOs | | | | | | | |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Main Market, PSM & SFM | 3 | 23 | -87% | | 30 | 71 | -58% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| AIM | 1 | 44 | -98% | | 27 | 144 | -81% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Borsa Italiana | 0 | 7 | -100% | | 5 | 29 | -83% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
| Total | 4 | 74 | -95% | | 62 | 244 | -75% |
+-------------------------------+--------+--------+-------+--+--------+--------+------+
The total amount of new capital raised on the Exchange's markets in Q3 was
GBP29.7 billion (2007: GBP12.1 billion), including 84 secondary issues on the
Main Market raising a total of GBP27.5 billion (2007: 106 secondary issues;
GBP1.3bn).
On a year to date basis, Issuer Services revenue declined six percent on a pro
forma basis to GBP71.9 million, largely reflecting the lower level of new issues
on the Exchange's markets resulting from volatile market conditions during the
course of the year.
Trading Services
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| | Three months | | Variance | Nine months | | Variance |
| | ended | | at | ended | | at |
+-------------+-------------------+----------+-----------+------------------+----------+----------+
| | 31 December | | constant | 31 December | | constant |
+-------------+-------------------+----------+-----------+------------------+----------+----------+
| | 2008 | | 2007 | Variance | currency | 2008 | | 2007 | Variance | currency |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| | GBPm | | GBPm | % | % | GBPm | | GBPm | % | % |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| Revenue | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| Cash | 42.6 | | 53.6 | -21% | -22% | 147.7 | | 159.1 | -7% | -9% |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| Derivatives | 6.0 | | 5.5 | 9% | 0% | 19.5 | | 17.3 | 13% | 5% |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| Fixed | 6.3 | | 6.7 | -6% | -20% | 19.2 | | 24.3 | -21% | -30% |
| income | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| Other | 9.9 | | 8.4 | 18% | 4% | 29.5 | | 26.5 | 11% | 1% |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
| Revenue | 64.8 | | 74.2 | -13% | -17% | 215.9 | | 227.2 | -5% | -9% |
| GBPm | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+----------+
The Trading Services division saw a 13 per cent decline in Q3 revenues to
GBP64.8 million, mainly reflecting the reduction in value traded in cash
equities in the UK (the principal driver of trading revenue at LSE) and a slow
down in trading volumes in Italy. Trading Services contributed 38 per cent of
Group revenues in the quarter.
On a year to date basis, revenue decreased five per cent to GBP215.9 million.
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | Three months | | | Nine months | |
| | ended | | | ended | |
+-------------------------------+-----------------+------+--+-----------------+------+
| | 31 December | | | 31 December | |
+-------------------------------+-----------------+------+--+-----------------+------+
| | 2008 | 2007 | | | 2008 | 2007 | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Equity Volume Bargains (m) | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| LSE | 49.7 | 41.3 | 20% | | 144.4 | 110.7 | 30% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana | 15.7 | 16.8 | -7% | | 49.5 | 52.8 | -6% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Total | 65.4 | 58.1 | 13% | | 193.9 | 163.5 | 19% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Equity Value Traded | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| LSE (GBPbn) | 397 | 570 | -30% | | 1,465 | 1,656 | -12% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana (EURbn) | 150 | 374 | -60% | | 718 | 1,207 | -41% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana (GBPbn) | 124 | 264 | -53% | | 574 | 850 | -32% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Total (GBPbn) | 521 | 834 | -38% | | 2,039 | 2,506 | -19% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Equity Average Daily Bargains | | | | | | | |
| ('000) | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| LSE | 777 | 645 | 20% | | 752 | 586 | 28% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana | 253 | 271 | -7% | | 259 | 281 | -8% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Total | 1,030 | 916 | 12% | | 1,011 | 867 | 17% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Equity Average Daily Value | | | | | | | |
| Traded | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| LSE (GBPbn) | 6.2 | 8.9 | -30% | | 7.6 | 8.8 | -14% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana (EURbn) | 2.4 | 6.0 | -60% | | 3.8 | 6.4 | -41% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana (GBPbn) | 2.0 | 4.3 | -53% | | 3.0 | 4.5 | -33% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Total (GBPbn) | 8.2 | 13.2 | -38% | | 10.6 | 13.3 | -20% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Equity Average Bargain Size | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| LSE (GBP'000) | 8.0 | 13.8 | -42% | | 10.2 | 15.0 | -32% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana (EUR'000) | 9.6 | 22.2 | -57% | | 14.5 | 22.9 | -37% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
Trading volumes on SETS, the UK electronic order book, remained good with
average daily bargains up 20 per cent, reflecting the continued growth in high
frequency, algorithmic traders using the low latency trading opportunities
provided by our platform, and also boosted by the strong trading in October. In
terms of value traded on SETS, there was a daily average GBP6.2 billion traded
during the quarter, a fall of 30 per cent, reflecting a 34 per cent drop in the
average value of the FTSE 100 over the same period. The average value of a SETS
bargain in Q3 decreased to GBP8,000 with the yield per bargain GBP0.70 (2007:
GBP1.12, including order management fees in place at the time), representing a
yield of 0.88 basis points of value traded (2007: 0.81 basis points).
The average daily number of trades in Italy in Q3 declined seven per cent,
reflecting the difficult market conditions and a 47 per cent average fall in the
value of the S&P MIB index. In November, the modern lower latency TradElect
platform was successfully migrated to Borsa Italiana.
+------------------------------+--------+--------+------+--+--------+--------+------+
| | Three months | | | Nine months | |
| | ended | | | ended | |
+------------------------------+-----------------+------+--+-----------------+------+
| | 31 December | | | 31 December | |
+------------------------------+-----------------+------+--+-----------------+------+
| | 2008 | 2007 | | | 2008 | 2007 | |
+------------------------------+--------+--------+------+--+--------+--------+------+
| Derivatives (contracts m) | | | | | | | |
+------------------------------+--------+--------+------+--+--------+--------+------+
| EDX | 13.2 | 12.5 | 6% | | 45.2 | 34.0 | 33% |
+------------------------------+--------+--------+------+--+--------+--------+------+
| IDEM | 8.0 | 8.6 | -7% | | 27.3 | 28.6 | -5% |
+------------------------------+--------+--------+------+--+--------+--------+------+
| Total | 21.2 | 21.1 | 0% | | 72.5 | 62.6 | 16% |
+------------------------------+--------+--------+------+--+--------+--------+------+
| | | | | | | | |
+------------------------------+--------+--------+------+--+--------+--------+------+
| Fixed Income (Nominal Value | | | | | | | |
| Traded) | | | | | | | |
+------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana MOT (EURbn) | 56.4 | 36.4 | 55% | | 134.8 | 110.2 | 22% |
+------------------------------+--------+--------+------+--+--------+--------+------+
| Borsa Italiana MOT number of | 1.0 | 0.6 | 67% | | 2.3 | 2.0 | 15% |
| trades (m) | | | | | | | |
+------------------------------+--------+--------+------+--+--------+--------+------+
| MTS (EURbn) | 3,937 | 4,279 | -8% | | 13,878 | 15,222 | -9% |
+------------------------------+--------+--------+------+--+--------+--------+------+
The Exchange's Derivatives operations saw contracts traded remain flat overall
in the third quarter. EDX London recorded a six per cent increase in contracts
traded, driven in part by further growth in Russian derivatives. Trading on the
Italian derivatives market IDEM reduced slightly, reflecting the decline in the
Italian equities market. In December, the Exchange completed the purchase of
the 24 per cent share of EDX London held by Nasdaq OMX, for a total
consideration of GBP5.25 million.
On the Fixed Income markets, trading conditions in Q3 remained testing as a
consequence of the credit market liquidity crisis. On MTS, nominal value traded
on repo and cash trading decreased eight per cent in total although on MOT,
Borsa Italiana's Electronic Bond and Government Securities Market, value traded
increased 55 per cent.
Information Services
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| | Three months | | Variance | Nine months | | Variance |
| | ended | | at | ended | | at |
+-------------+-------------------+----------+-----------+------------------+----------+-----------+
| | 31 December | | constant | 31 December | | constant |
+-------------+-------------------+----------+-----------+------------------+----------+-----------+
| | 2008 | | 2007 | Variance | currency | 2008 | | 2007 | Variance | currency |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| | GBPm | | GBPm | % | % | GBPm | | GBPm | % | % |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Revenue | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Data | 30.6 | | 28.2 | 9% | 2% | 91.2 | | 80.6 | 13% | 8% |
| charges | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Other | 16.5 | | 12.9 | 28% | 25% | 45.7 | | 37.6 | 22% | 19% |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
| Revenue | 47.1 | | 41.1 | 15% | 9% | 136.9 | | 118.1 | 16% | 12% |
| GBPm | | | | | | | | | | |
+-------------+--------+--+-------+----------+-----------+-------+--+-------+----------+-----------+
The Information Services division produced a very strong third quarter
performance, with a 15 per cent revenue increase to GBP47.1 million, comprising
28 per cent of total Group income.During the quarter there was a small
non-recurring element of data income, and an increase in network revenues as
market users upgraded to higher speed access to our markets.
For the nine months to date, revenue increased 16 per cent to GBP136.9 million,
partly reflecting the overall higher level of terminals receiving real time data
over the comparative period.
+-------------------------------+---------+---------+----------+--+----------+----------+
| | 31 December | Variance | | 31-March | Variance |
+-------------------------------+-------------------+----------+--+----------+----------+
| | 2008 | 2007 | % | | 2008 | % |
+-------------------------------+---------+---------+----------+--+----------+----------+
| LSE Terminals | | | | | | |
+-------------------------------+---------+---------+----------+--+----------+----------+
| Professional - UK | 44,500 | 44,000 | 1% | | 45,000 | -1% |
+-------------------------------+---------+---------+----------+--+----------+----------+
| Professional - International | 66,500 | 63,000 | 6% | | 67,000 | -1% |
+-------------------------------+---------+---------+----------+--+----------+----------+
| LSE Total | 111,000 | 107,000 | 4% | | 112,000 | -1% |
+-------------------------------+---------+---------+----------+--+----------+----------+
| | | | | | | |
+-------------------------------+---------+---------+----------+--+----------+----------+
| Borsa Italiana - Professional | 155,500 | 158,500 | -2% | | 160,000 | -3% |
+-------------------------------+---------+---------+----------+--+----------+----------+
At 144,000, the total number of terminals taking London Stock Exchange data was
11,000 above the level at end of December 2007. Professional terminals stood at
111,000 at the end of Q3, up 4,000 over the comparable period last year although
down 1,000 during the quarter.
The number of professional users of the Borsa Italiana data reduced 3,000 from
the comparative period last year, and are 5,500 down since the half year.
Post Trade Services
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
| | Three months | | Variance | Nine months | | Variance |
| | ended | | at | ended | | at |
+-------------+-------------------+----------+----------+------------------+----------+-----------+
| | 31 December | | constant | 31 December | | constant |
+-------------+-------------------+----------+----------+------------------+----------+-----------+
| | 2008 | | 2007 | Variance | currency | 2008 | | 2007 | Variance | currency |
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
| | GBPm | | GBPm | % | % | GBPm | | GBPm | % | % |
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
| Revenue | | | | | | | | | | |
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
| Clearing | 18.0 | | 8.3 | 117% | 80% | 39.7 | | 26.4 | 50% | 31% |
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
| Settlement | 4.5 | | 3.7 | 22% | 2% | 12.5 | | 11.4 | 10% | -4% |
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
| Custody | 8.4 | | 7.3 | 15% | -5% | 25.4 | | 22.5 | 13% | -2% |
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
| Revenue | 30.9 | | 19.3 | 60% | 34% | 77.6 | | 60.3 | 29% | 12% |
| GBPm | | | | | | | | | | |
+-------------+--------+--+-------+----------+----------+-------+--+-------+----------+-----------+
The Post Trade Services division delivered another very strong revenue
performance given the decline in trading volumes in the markets in which it
operates. Revenues reflect the strength of the Euro and higher clearing revenues
associated with treasury management, with the post trade operations contributing
18 per cent of Group revenues. On a year to date basis revenues increased 29
percent.
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | Three months | | | Nine months | |
| | ended | | | ended | |
+-------------------------------+-----------------+------+--+-----------------+------+
| | 31 December | | | 31 December | |
+-------------------------------+-----------------+------+--+-----------------+------+
| | 2008 | 2007 | | | 2008 | 2007 | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| CC&G Clearing: | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Equity Clearing (m) | 16.1 | 17.2 | -6% | | 50.5 | 53.6 | -6% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Derivative Clearing (m) | 8.0 | 8.9 | -10% | | 27.3 | 28.6 | -5% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Total Contracts (m) | 24.1 | 26.1 | -8% | | 77.8 | 82.2 | -5% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Open interest (m) | 2.9 | 2.2 | 32% | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Monte Titoli: | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Settlement Instructions (m) | 11.8 | 12.6 | -6% | | 33.7 | 39.4 | -14% |
+-------------------------------+--------+--------+------+--+--------+--------+------+
| Custody assets under | 2.7 | 2.8 | -4% | | 2.7 | 2.8 | -4% |
| management (EURtn) | | | | | | | |
+-------------------------------+--------+--------+------+--+--------+--------+------+
Declines in clearing transaction volumes at CC&G reflect the reduction in both
Italian cash equities and derivatives trading volumes. Clearing revenues
benefited significantly from an increase in margin and reserve fund deposits,
due to the volatility in the period, and increasing interest rate spreads.
In Monte Titoli, the number of settlement instructions during the third quarter
decreased by six per cent, resulting from a reduction in equities trading.
Custody revenues for Q3 were up 15 per cent to GBP8.4 million due to the
increase in the Euro. On a constant currency basis revenues fell five per cent
in line with the fall in the value of assets under custody to EUR2.7 trillion,
with the majority of assets held being fixed income valued at their nominal
amount.
Financial Position
There has been no significant change to the Group's financial position reported
for the six months ended 30 September 2008.
During the quarter the Exchange closed out a gilt lock hedging instrument for a
total cost of GBP10.6 million, of which GBP6.8m is the loss since inception
reported at the half year.
Current trading and Outlook
The Exchange delivered a good overall performance in the third quarter of the
financial year, set against the challenging financial market conditions and a
difficult equity trading environment.
Since the start of 2009, cash equities trading volumes and value are lower than
the average levels seen in the previous two months and down in comparison to the
record trading levels last January. Weak market conditions mean that new issue
activity remains at very low levels, although the prospects for secondary issues
appear good.
Looking forward to the remainder of the financial year, market conditions remain
very difficult and uncertain. Nonetheless, benefits from the integration with
Borsa Italiana are being delivered, development of new products continues and
underlying operational costs are being tightly controlled.
Further information is available from:
+---------------------------+--------------------------------+------------------------+
| London Stock Exchange | Patrick Humphris - Media | +44 (0) 20 7797 1222 |
+---------------------------+--------------------------------+------------------------+
| | Alessandro Pavesi - Media | +39 02 72426 211 |
+---------------------------+--------------------------------+------------------------+
| | Paul Froud - Investor | +44 (0) 20 7797 3322 |
| | Relations | |
+---------------------------+--------------------------------+------------------------+
| | | |
+---------------------------+--------------------------------+------------------------+
| Finsbury | Alex Simmons | +44 (0) 20 7251 3801 |
+---------------------------+--------------------------------+------------------------+
Basis of Preparation
On 1 October 2007, Borsa Italiana S.p.A. ("BIt") was acquired by London Stock
Exchange Group plc ("LSEG").
The unaudited pro forma information for the nine months to 31 December 2007 and
the quarters ended 30 June 2007 and 30 September 2007 has been prepared by the
directors to illustrate the acquisition of BIt as if it had taken place on 1
April 2007 (the first day of that period). In addition, the pro forma
information includes the revenues of MBE Holding S.p.A. (the holding company for
MTS), of which the remaining 51% was acquired on 14 September 2007, as if it had
it been acquired on 1 April 2007 by BIt. The information has not been designed
to and does not give a presentation of the consolidated revenue of LSEG that
would have been reported had the business combination actually occurred on 1
April 2007 (for example, it does not include the impact of potential synergies).
It has been prepared for illustrative purposes only through the aggregation of
existing LSEG, existing BIt group and MBE Holding S.p.A. (including MTS)
financial information.
Revenue for BIt for the three months ended 31 December 2008 and 31 December
2007has been translated into Sterling using the average monthly exchange rates
prevalent during the period of EUR1.1934 : GBP1 and EUR1.4113 respectively, and for
the nine months ended 31 December 2008 using the average monthly exchange rates
prevalent during the period of EUR1.2379 : GBP1. Pro forma revenue for BIt for
the nine months ended 31 December 2007 has been translated at the average
exchange rate for the year ended 31 March 2008 of EUR1.4196 : GBP1. Constant
currency growth rates for both the three months and the nine months ended 31
December 2008 have been calculated by translating prior period results at the
average exchange rate for the current period.
Appendix
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Quarterly revenues | | FY2008 | | FY2009 |
+-------------------------+--+----------------------------------------+--+--------------------------+
| GBPm | | Q1 | | Q2 | | Q3 | | Q4 | | Q1 | | Q2 | Q3 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| | | | | | | | | | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Annual fees | | 10.0 | | 10.2 | | 10.2 | | 10.4 | | 10.6 | | 10.2 | 10.3 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Admission fees | | 11.3 | | 8.6 | | 8.8 | | 5.7 | | 10.3 | | 6.5 | 5.8 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| RNS, other | | 6.2 | | 4.8 | | 6.1 | | 4.8 | | 6.6 | | 5.2 | 6.4 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Issuer | | 27.4 | | 23.7 | | 25.1 | | 20.9 | | 27.5 | | 21.9 | 22.5 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| | | | | | | | | | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Cash | | 50.7 | | 54.9 | | 53.6 | | 59.6 | | 51.7 | | 53.4 | 42.6 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Derivatives | | 6.0 | | 5.7 | | 5.5 | | 7.1 | | 6.9 | | 6.6 | 6.0 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Fixed income | | 8.8 | | 8.8 | | 6.7 | | 8.1 | | 7.0 | | 5.9 | 6.3 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Other | | 8.9 | | 9.1 | | 8.4 | | 8.0 | | 9.5 | | 10.1 | 9.9 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Trading | | 74.5 | | 78.5 | | 74.2 | | 82.9 | | 75.1 | | 76.0 | 64.8 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| | | | | | | | | | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Data charges | | 23.6 | | 26.1 | | 26.8 | | 28.9 | | 30.4 | | 30.2 | 30.6 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Other | | 13.9 | | 13.4 | | 14.3 | | 14.8 | | 14.4 | | 14.8 | 16.5 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Information | | 37.5 | | 39.5 | | 41.1 | | 43.7 | | 44.8 | | 45.0 | 47.1 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| | | | | | | | | | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Clearing | | 9.3 | | 8.8 | | 8.3 | | 11.0 | | 12.5 | | 9.2 | 18.0 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Settlement | | 4.2 | | 3.5 | | 3.7 | | 3.7 | | 4.1 | | 3.9 | 4.5 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Custody | | 8.2 | | 7.1 | | 7.3 | | 7.0 | | 9.2 | | 7.8 | 8.4 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Post Trade | | 21.6 | | 19.4 | | 19.3 | | 21.6 | | 25.8 | | 20.9 | 30.9 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| | | | | | | | | | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Other income | | 3.5 | | 3.4 | | 4.7 | | 4.3 | | 4.6 | | 3.9 | 5.7 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| | | | | | | | | | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| Total revenue | | 164.5 | | 164.5 | | 164.4 | | 173.4 | | 177.8 | | 167.7 | 171.0 |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| | | | | | | | | | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
| FY2008 Pro forma revenues calculated using an average exchange rate of | | | |
| EUR1.4196:GBP1 | | | |
+--------------------------------------------------------------------------------+--+-------+-------+
| FY2009 revenues calculated using an average exchange rate of | | | | | |
| EUR1.2379:GBP1 | | | | | |
+-------------------------+--+-------+--+-------+--+-------+--+-------+--+-------+--+-------+-------+
Following completion of acquisition accounting in financial year ended 31 March
2008, a GBP3.5m adjustment was made to third quarter revenues, from GBP167.9m to
GBP164.4m. This was fully reflected in the Group's published full year results
for the year ended 31 March 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IMSBCGDBRGDGGCB
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