Diversity boosts LSE profits

The London Stock Exchange said a move to diversify its products had paid off, with in a big jump in profits in the first half.

The London Stock Exchange said a move to diversify its products had paid off, with in a big jump in profits in the first half.

But the company said economic conditions meant there could be testing times ahead.

Pre-tax profits for the six months to the end of September up 79% at £179.7m, with basic earnings per share up 86% at 43.1p.

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The company also pushed its interim dividend up 6% to 9.3 pence per share.

LSE flagged up the performance of its post trade services, where total income was up 68%, driven by growth in clearing volumes and increased treasury income from its central counterparty business.

It also benefitted from an increasing number of firms raising funds on the bourse.

The number of new issues on the group's primary markets increased 15% to 102, including 24 international companies, with total capital raised up 32% at £23bn.

The numbers were boosted by the float of Glencore, the largest ever international IPO in London, which raised £6.2 billion.

However, it said that activity levels at the start of of the second half were lower than last year and any extended period of market volatility made timing of new issues uncertain, although the pipeline for IPOs appeared encouraging with a number of international companies seeking opportunities to raise capital.

In the secondary markets, average daily value traded in the UK cash equities market increased 2% to £5.0bn, helped by strong trading in August.

In Italy, where LSE owns Borsa Italiana, the average daily number of trades rose 7% to 267,000, also benefitting from heightened trading over the summer.

"Looking forward, market conditions are expected to be testing, though the group is in good shape as we continue to diversify our business through a focus on our strategy to improve competitiveness, drive innovation, extend our scope and scale and deliver growth," said LSE chairman, Chris Gibson-Smith.