Bourse operator London Stock Exchange Group Plc (LSE.L) reported Wednesday a decline in profit for the first half, reflecting a 9% drop in revenues due to lower trading levels and increased competition, particularly in UK cash equities. Looking ahead, the company noted that underlying market conditions remain uncertain, at least in the near term, and expects intense competition to remain in cash equities trading. For the first half of the year, the company's profit before tax declined to GBP 79.4 million from GBP 127 million in the previous year. Profit for the period attributable to equity holders dropped to GBP 49.3 million or 18.4 pence per share from GBP 81.7 million or 30 pence per share in the same period last year. Adjusted profit for the financial period attributable to equity holders was GBP 77.6 million or 28.9 pence per share, lower than GBP 106.1 million or 38.9 pence per share a year ago.
The company noted that adjusted earnings decreased as a result of lower revenues and the effect of GBP 20.4 million of non-recurring costs associated with the MillenniumIT acquisition, which is equivalent to 5.5 pence per share. Revenues for the first half decreased 9% to GBP 310.9 million from GBP 342.5 million in the year-ago period. In constant currency, revenues for the period were down 13%. Chris Gibson-Smith, chairman said, "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."
However, LSE noted that there were good performances in both the Post Trade and Information & Technology Services divisions, which recorded increased revenues over last year and in aggregate comprised 53% of Group revenues. Segment-wise, revenues from Capital Markets decreased to GBP 147.2 million from GBP 187.3 million in the previous year. Capital Markets comprises the Group's primary markets activities, providing access to capital for corporates and others, and the secondary market trading of cash equities, derivatives and fixed income.
Revenues from Primary markets declined to GBP 34.2 million from GBP 37.5 million last year, due to the expected fall in annual fee revenues following the reductions in market capitalization last year, the company noted. Secondary Markets revenues were GBP 95.2 million, down from GBP 131.6 million in the preceding year-period, reflecting a reduction in the value of UK cash equities traded.
Information & Technology Services revenues slightly increased to GBP 103.5 million from GBP 102.4 million in the prior year. Post Trade revenues were GBP 59.3 million, up from GBP 51.1 million in the comparable period a year ago.
Operating profit was GBP 95.8 million, down from GBP 154.2 million in the prior year.
During the half year, the company recorded amortization of purchased intangible assets of GBP 25.4 million and exceptional items and impairment of goodwill totaling GBP 13.6 million. Exceptional items mainly relate to costs associated with the reduction of 133 in Group headcount, which fell to 1,006 from 1,135 at year end. Excluding items, operating expenses increased to GBP 180.2 million from GBP 165.6 million in the first half of last year. Operating expenses for the recent period include GBP 20.4 million, of a total GBP 31 million, of non-recurring accelerated depreciation and other IT costs relating to the existing TradElect platform, which will be replaced next year as a result of the acquisition of MillenniumIT, the company said. Excluding these costs, operating expenses in constant currency were 8% lower than the same period last year. According to the company, an additional GBP 5 million of associated non-recurring costs will be taken in second half of the year and GBP 6 million will be taken in fiscal 2011. The company also said that the acquisition of MillenniumIT is expected to result in estimated annual cost savings of at least GBP 10 million from fiscal 2012.
Net finance costs reduced to GBP 18.8 million from GBP 27.2 million in the prior-year period. Xavier Rolet, chief executive said, "Despite testing markets, there are some encouraging elements within our first half results. Both the Post Trade and the Information & Technology divisions performed well and in our primary markets business there was a continued flow of capital raising activity. The overall Group performance reflected market conditions depressed by the fall out from turmoil in financial markets last year and increased competition, particularly in UK cash equities trading which, as expected, resulted in a weaker performance in the Capital Markets division." While commenting on the current trading, the company noted that during October daily average equity value traded in London increased 8% compared with September, while average daily equity volumes were up 13% in Italy, although trading on both markets in November to date has fallen below October levels. In addition, the Directors declared an interim dividend of 8.4 pence per share, to shareholders of record on December 4, 2009, payable on January 5, 2010. LSE.L is currently trading at 839 pence, down 8 pence or 0.94%, on a volume of 455 thousand shares. In the past 52 weeks, the shares have been trading in a range of 355.75 pence - 949.5 pence on the LSE.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.