LSE posts £50million drop in profits for six months to September


Updated:

The London Stock Exchange posted a fall in earnings on a 9 per cent drop in interim revenue from a year ago and said it expected competition in cash equities to remain intense.

Pretax profit dropped to £79.4million for the six months to end-September from £127million a year ago, the company said on Wednesday.

Revenue fell to £311million.

London Stock Exchange

The LSE's monthly market share in the UK has fallen to 58 per cent in October from nearly 96 per cent in January 2008


LSE, like other long-standing European exchanges, has been losing market share to mulitalteral trading facilities such as Chi-X and BATS since pan-European regulation opened the market to competition in 2007.

'Lower trading levels, together with intense competition from new trading venues with aggressive pricing, have contributed to lower equity trading revenues, the main area of decline for the group,' the company said in a statement, adding that market conditions remained uncertain.

The LSE's monthly market share in the UK has fallen to 58 per cent in October from nearly 96 per cent in January 2008, according to Thomson Reuters data for trade on transparent and dark order books and auctions.

The company cited good performance of the post-trade and information and technology divisions, which increased revenues to account for 53 per cent of group revenues overall.

'Increased trading volumes will help drive post-trade activities, although with more settled debt market conditions returning, lower interest spreads on margins held will weigh on clearing revenues,' the company said.

Demand for real-time data is likely to remain under pressure in the second half, while other businesses in the information and technology division remain robust, it said.

It cited record levels of capital-raising for companies in the first quarter, 'with the flow of secondary issues continuing right through the half-year and beyond.'

The pipeline for initial public offerings 'appears promising for 2010,' LSE said.

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