London Stock Exchange Group Plc (LSE.L) Wednesday reported a decline in fiscal 2013 profit, reflecting mainly acquisition-related costs, despite 7 percent rise in revenues. Additionally, the prior-year had a one-time gain related to its interest in FTSE. The exchange operator said it remains optimistic about the year ahead. The shares are up about 6 percent in the morning trade.
According to the firm, acquisitions of GATElab, FTSE and TRS led to a 14 percent increase in year-on-year costs. However, acquisitions made over the past four years, including MillenniumIT, FTSE and the recent purchase of a majority stake in LCH.Clearnet completed in May 2013, have helped to transform the Group, it said.
Xavier Rolet, chief executive of the company stated, "We are optimistic about the year ahead and we will continue to focus on building best in class capabilities, extending our global footprint and to developing opportunities, now with LCH.Clearnet as part of the Group."
The company noted that FTSE has performed well and is embedded as a core part of its business.
Announcing its preliminary results for the year ended March 31, the company said its profit before tax for the year fell to 298.9 million pounds from 639.7 million pounds in the previous year. Before acquisition amortization and non-recurring items, pre-tax profit was 380.7 million pounds, compared to 400.6 million pounds in the prior year.
On a per share basis, earnings were 79 pence, down from 190.9 pence reported last year. Adjusted earnings for the current year totaled 103.4 pence, while the company posted 99.2 pence per share a year earlier.
Annual revenues grew 7 percent to 726.4 million pounds. Total income was 871.2 million pounds, higher than 814.8 million pounds last year. On an organic and constant currency basis, revenues declined 3 percent.
Information Services revenues climbed 40 percent to 306.3 million pounds. In Capital Markets, revenues dropped 11 percent to 267.5 million pounds. Post Trade Services revenue declined 10 percent, while, Technology Services revenue improved 7 percent from the preceding year.
Operating expenses advanced to 522.8 million pounds from 459.8 million pounds in fiscal 2012.
The board has also proposed a final dividend of 19.8 pence per share, up 4 percent from last year, to shareholders of record on July 26, 2013, payable on August 19. This will make the total dividend for the year to 29.5 pence, an increase of 4 percent.
LSE.L is currently trading at 1,417 pence, up 82 pence or 6.14 percent, on a volume of 417,384 shares.
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