London Stock Exchange Group plc reports results for the financial year ended 31 March 2009.
Revenue edged 23% up to GBP671.4 million; a one per cent increase on a pro forma basis (6% down at constant currency) assuming the merger with Borsa Italiana had taken place on 1 April 2007;
Adjusted operating profit (before goodwill impairment, amortisation of purchased intangibles and exceptional items) is 17% up to GBP338.6 million; down one per cent pro forma (down 7% at constant currency);
Adjusted basic earnings per share are 2% up to 74.2 pence; Total dividend for the year is 2% up to 24.4 pence per share and an additional GBP51.5 million returned to shareholders through share buybacks in H1;
Including non-cash goodwill impairment (of GBP484.0 million), amortisation of purchased intangibles and exceptional items, loss before tax was GBP250.8 million (2008: profit before tax GBP227.0 million) and basic loss per share was 126.1 pence (2008: basic EPS 70.8 pence);
Strong net cash flow from operations after exceptional items of GBP352.6 million up from GBP292.9 million last year; and free cash flow of GBP100.2 million (2008: GBP102.1 million);
GBP905 million committed borrowing facilities, of which GBP700 million extends through to 2012 or beyond compared to GBP625 million drawn debt; interest cover at 10.1 times (2008: 9.8 times) remains strong.
During the year Group underlined its vital role for companies with a record GBP106 billion raised by companies on our markets, including GBP99 billion in secondary issues;
There was a total 160 new issues, and the Group remained strong listing venue with 21 international IPOs; AIM Italia was successfully launched and since year-end has hosted its first two IPOs;
Merger integration programme with close to full run rate is well ahead of plan, with 60% increase in cost synergies to GBP32 million to be achieved in the March 2010 financial year; Italian cash equities market successfully migrated to TradElect;
SETS volumes continued to grow, increasing 15% to 740,000 trades per day. SETS average daily value traded declined 24%, in line with an average 22% fall in the FTSE 100; trading at Borsa Italiana was 12% lower at 256,000 trades per day;
Overall performance in the Derivatives and Fixed Income businesses remained resilient despite challenging market conditions;
Demand for the Groups real time data remained generally robust despite the market downturn, with 104,000 professional users of LSE information at year-end, down 8,000 over last year; and in Italy professional terminals stood at 151,000, down 9,000;
Strong performance from post trade services as CC&G performs its crucial function as central counterparty throughout the financial crisis.
While the Groups markets have been affected by the crisis in global financial markets, we have produced good underlying results, underpinned by robust cash flows, as the benefits of a more diversified business emerge following our successful merger with Borsa Italiana, says Chris Gibson-Smith, chairman of London Stock Exchange Group.
The goodwill impairment arising from the all share merger is a technical accounting adjustment reflecting the major deterioration in current economic conditions. It belies the high quality of, and potential arising from the combination. Indeed, the assessed value of Borsa Italiana remains comfortably above the GBP1.3 billion value at the time of completion of the merger given the strengthening of the euro.
Although market conditions are expected to remain testing, the Board believes the Group is well placed for the future. We remain at the heart of global equity capital markets at a time when such markets are fundamental to the recovery of the real economy.
We have performed well, with revenue up 23%, reflecting the overall resilience and diversification of our business, and full year effect of our merger with Borsa Italiana, says Clara Furse, chief executive. Each of our divisions responded well in increasingly difficult markets, with Information Services and our CC&G clearing operations delivering particularly strong growth, and the Exchange playing an essential role in economic recovery during a year of record equity fund raising on its markets.
We have also made very good progress in achieving synergies from the merger and will now deliver a further increase in cost synergies to GBP32 million, up by 60% from the original plan.
L.D.