IMS for the period to 28 April 2015, including revenues and KPIs for the three months ended 31 March

  • Good financial performance – revenue up 86 per cent to £581.0 million and total income up 79 per cent, to £602.5 million; excluding Russell Investment Management,  income rose 6 per cent
  • Information Services - revenues up 42 per cent with inclusion of Russell Indexes; and up 5 per cent on an organic and constant currency basis reflecting good performance from FTSE (up 12 per cent) and other information services
  • Capital Markets - revenues up 2 per cent, with growth in both money raised and in the number of new issues on the UK main market and in Italy; secondary markets benefitted from stronger trading in equities, derivatives at IDEM and fixed income trading at MTS
  • Post Trade Services in Italy - revenues up 4 per cent at constant currency (down 6 per cent as reported) with increased clearing and settlement activity
  • LCH.Clearnet - flat after adjusting for currency changes and the previously announced  loss of LME commodities clearing,  with good growth at SwapClear (revenues up 16 per cent) - Group to hold investor update event on opportunities and developments in Post Trade Services on 20 May
  • Technology Services revenues increased 5 per cent (up 2 per cent constant currency)
  • Group making excellent progress integrating Russell Indexes; sale of Russell Investment Management is on track, with a good number of indications of interest received

Commenting on performance in Q1, Xavier Rolet, Chief Executive, said:

“We have delivered a good performance in the first quarter, reflecting both organic growth and the contribution from the newly acquired Russell businesses.  FTSE and Russell Indexes have both performed well, Capital Markets revenues have continued to grow and we have seen good underlying performance in our Italian post trade business and at SwapClear.

“We remain focused on realising integration and efficiency benefits, as well as developing the many opportunities across the Group arising from our extended geographic reach and product range.  The Group is well placed to build on its success as the only major, international open access market infrastructure business, working with its customers to drive innovation and deliver market efficiencies.”

Financial position

Following the payment of dividends, bond coupons, tax and variable compensation during the last quarter, the Group’s financial position is broadly unchanged from the position reported at 31 December 2014.

The euro weakened against sterling compared with the same period last year, while the Group’s increased exposure to the US dollar provided some offset. To illustrate our exposure to movements in exchange rates, a €0.05 change in the average euro:sterling rate would have resulted in a change to total income of c£6 million for Q1, while a $0.05 change in the average dollar:sterling rate would have resulted in a change to total income of c£6 million in the period.

Current trading and outlook

The Group has made a good start to the year and is well placed to deliver benefits from continued positive market trends and from the work to develop further revenue and efficiency opportunities.  We remain confident that the Group will continue to develop and grow. 

The Group will host an investor update event on Post Trade Services on 20 May 2015.

Further information is available from:

London Stock Exchange Group plc

Victoria Cowley – Media

Paul Froud – Investor Relations

+44 (0) 20 7797 1222

+44 (0) 20 7797 3322

Finsbury

David Henderson / Mike Turner

+44 (0) 20 7251 3801

A conference call for analysts and investors will be held at 9:00 (UK time) on Wednesday 29th April.  On the call will be David Warren (CFO) and Paul Froud (Head of Investor Relations).

To access the Telephone conference call, dial 0800 694 0257 or +44 (0) 1452 555 566
Conference ID: 3418 5549


Q1 Revenue Summary

Revenues for three months ended 31 March 2015, with comparatives against performance for the same period last year, are provided below.  Growth rates for performance are also expressed on an organic and constant currency basis.  All figures are unaudited.

Organic   and

Three months ended

constant

31 March

currency

2015

2014

Variance

variance1

£m

£m

%

%

Revenue

Capital Market

85.9

84.2 

2% 

7% 

Post Trade Services - CC&G and Monte Titoli

23.4

25.0 

(6%)

4% 

Post Trade Services - LCH.Clearnet

73.9

90.7 

(19%)

(16%)

Information Services

130.8

92.0 

42% 

5% 

Technology Services

19.6

18.6 

5% 

2% 

Russell Investment Management (gross)

246.5

-

-

- 

Other

0.9

1.3 

(31%)

(31%)

Total revenue

581.0

311.8 

86% 

(1%)

Net   treasury income through CCP business

CC&G

6.8

9.4 

(28%)

(19%)

LCH.Clearnet

13.4

14.1 

(5%)

(4%)

Other income

1.3

1.9 

(32%)

(32%)

LCH.Clearnet unrealised gain / (loss)

0.4  

(0.6)

-

-

Total income including unrealised

602.9

336.5 

79% 

(1%)

Total income excluding unrealised

602.5

337.1 

79% 

(2%)

1Exchange rates for the relevant period are detailed at the end of this section
 Adjustments to calculate organic growth:

1)      Removal of Bonds.com revenue (Capital Markets – Fixed Income)

2)      MTS Indices removal from 2014 Capital Markets Fixed Income revenue and from  2015 Information Services FTSE revenue

More detailed revenues by segment are provided in tables below:

 Capital Markets

Organic   and

Three months ended

constant

31 March

currency

2015

2014

Variance

variance1

Revenue

£m

£m

%

%

Primary Markets

Annual fees

11.3

10.6

7% 

11% 

Admission fees

10.1

10.1

0% 

1% 

 

21.4

20.7

3% 

6% 

Secondary Markets

Cash equities UK & Turquoise

28.1

26.4

6% 

7% 

Cash equities Italy

10.1

9.9

2% 

12% 

Derivatives

4.6

5.0

(8%)

2% 

Fixed income

19.5

19.7

(1%)

7% 

 

62.3

61.0

2% 

8% 

Other

2.2

2.5

(12%)

(8%)

Total revenue

85.9

84.2

2% 

7% 

Adjustments to calculate organic growth:

1 Removal of Bonds.com and MTS Indices from Capital Markets Fixed Income revenue

Post Trade Services - CC&G and Monte Titoli

Three months ended

Constant

31 March

currency

2015

2014

Variance

variance

£m

£m

%

%

Revenue

Clearing

10.0

10.4

(4%)

6% 

Settlement

4.3

4.4

(2%)

10% 

Custody & other

9.1

10.2

(11%)

(1%)

Total revenue

23.4

25.0

(6%)

4% 

Net treasury income

6.8

9.4

(28%)

(19%)

Total income

30.2

34.4

(12%)

(2%)

 

LCH.Clearnet

Three months ended

Constant

31 March

currency

2015

2014

Variance

variance1

Revenue

£m

£m

%

%

OTC

SwapClear

29.9

25.8 

16% 

16% 

ForexClear / CDSClear

6.6

7.4 

(11%)

0% 

 

36.5

33.2 

10% 

13% 

Non-OTC

 

Fixed income

10.4

11.0 

(5%)

3% 

Commodities

-

11.2 

- 

-

Listed derivatives

9.4

13.2 

(29%)

(26%)

Cash equities

9.2

9.1 

1% 

8% 

 

29.0

44.5 

(35%)

(32%)

Total Clearing fee revenue

65.5

77.7 

(16%)

(13%)

Other

8.4

13.0 

(35%)

(34%)

Total revenue

73.9

90.7 

(19%)

(16%)

Net treasury income

13.4

14.1 

(5%)

(4%)

Unrealised gain / (loss)

0.4

(0.6)

- 

- 

Total income including unrealised

87.7

104.2 

(16%)

(13%)

Total income excluding unrealised

87.3

104.8 

(17%)

(14%)

 

1 0% constant currency variance excluding Commodities clearing revenue (£11.2m) and net treasury income / collateral fees (£3.1m) from 2014

Information Services

Organic   and

Three months ended

constant

31 March

currency

2015

2014

Variance

variance1

£m

£m

%

%

Revenue

FTSE

51.2

45.9

12% 

7% 

Russell Indexes

33.8

-

- 

-

Real time data

21.3

23.3

(9%)

(6%)

Other information services

24.5

22.8

7% 

10% 

 

130.8

92.0

42% 

5% 

 

Adjustments to calculate organic growth:

1 MTS Indices removed Information Services FTSE revenue

 

Technology Services

Organic   and

Three months ended

constant

31 March

currency

2015

2014

Variance

variance

£m

£m

%

%

Revenue

MillenniumIT

9.8

10.5

(7%)

(15%)

Technology

9.8

8.1

21% 

26% 

Total revenue

19.6

18.6

5% 

2% 

Basis of Preparation

Results for the period ended 31 March 2015 have been translated into Sterling using the average monthly exchange rates.  Constant currency growth rates have been calculated by translating prior period results at the average exchange rate for the current period.

 

 

Average rate

Closing rate at 31 March 2015

Average rate

Closing rate at 31 March 2014

 

3 months ended

3 months ended

 

31 March 2015

31 March 2014

GBP : EUR

1.35

1.37

1.21

1.20

GBP : USD

1.51

1.48

1.66

1.66

 

Appendix – Key performance indicators

 

Three   months ended

 

31   March

Variance

2015

2014

%

New Issues

UK Main Market, PSM & SFM

22

15

47% 

UK AIM

16

26

(38%)

Borsa Italiana

7

5

40% 

Total

45

46

(2%)

Money Raised (£bn)

UK New

2.0

4.2

(52%)

UK Further

6.1

3.8

61% 

Borsa Italiana new and further

0.4

0.1

300% 

Total (£bn)

8.5

8.1

5% 

  

Capital Markets - Secondary   Markets

Three   months ended

 

31   March

Variance

Equity

2015

2014

%

Totals for period

UK value traded (£bn)

330

322

2% 

Borsa Italiana (no of trades m)

19.5

18.0

8% 

Turquoise value traded (€bn)

300.4

221.0

36% 

SETS Yield (basis points)

0.62

0.61

2% 

Average daily

UK value traded (£bn)

5.2

5.1

2% 

Borsa Italiana (no of trades '000)

309

287

8% 

Turquoise value traded (€bn)

4.8

3.5

37% 

Derivatives (contracts m)

LSE Derivatives

1.3

5.1

(75%)

IDEM

11.0

10.6

4% 

Total

12.3

15.7

(22%)

Fixed Income

MTS cash and BondVision (€bn)

1,186

1,163

2% 

MTS money markets (€bn term   adjusted)

23,613

16,672

42% 

 

Post Trade Services - CC&G and Monte   Titoli

Three   months ended

 

31   March

Variance

2015

2014

%

CC&G Clearing

Contracts (m)

31.8

29.6

7% 

Initial margin held (average €bn)

11.1

11.1

0% 

Monte Titoli

Settlement instructions (trades m)

17.5

16.3

7% 

Custody assets under management   (average €tn)

3.29

3.36

(2%)

 

Post Trade Services -   LCH.Clearnet

Three   months ended

 

31   March

Variance

2015

2014

%

OTC derivatives

SwapClear

IRS notional outstanding ($trn)

304  

404  

(25%)

IRS notional cleared ($trn)

142  

165  

(14%)

SwapClear members

113  

103  

10% 

CDSClear

Notional cleared (€bn)

21.9  

18.9  

16% 

CDSClear members

11  

11  

0% 

ForexClear

Notional value cleared ($bn)

270  

190  

42% 

ForexClear members

22  

20  

10% 

Non-OTC

Fixed income - Nominal value (€trn)

18.6  

17.9  

4%

Listed derivatives (contracts m)

36.7  

49.7  

(26%)

Cash equities trades (m)

140.3  

117.9  

19% 

Average cash collateral (€bn)

54.0  

43.2  

25% 

 

Information Services

As   at

31   March

Variance

2015

2014

%

Terminals

UK

76,000

79,000

(4%)

ETFs assets under management   benchmarked ($bn)

FTSE

242

186

30% 

Russell Indexes

158

136

16% 

Russell   Investment Management AuM ($bn)

272

260

5% 

 

Total Income – Quarterly

CY   2014

CY   2015

£ millions

Q1

Q2

Q3

Q4

CY 2014

Q1

Annual Fees

10.6 

11.0

11.3 

11.2 

44.2 

11.3

Admission Fees

10.1 

14.3

8.8 

11.5 

44.6 

10.1

Cash equities UK & Turquoise

26.4 

24.5

23.8 

26.5 

101.2 

28.1

Cash equities Italy

9.9 

10.0

8.7 

9.4 

38.0 

10.1

Derivatives

5.0 

4.9

4.6 

5.5 

20.0 

4.6

Fixed Income

19.7 

19.9

18.2 

18.1 

75.9 

19.5

Other

2.5 

2.4

2.2 

2.2 

9.3 

2.2

Capital Markets

84.2 

87.0

77.6 

84.4 

333.2 

85.9

Clearing

10.4 

10.2

8.2 

9.3 

38.2 

10.0

Settlement

4.4 

5.0

3.8 

4.2 

17.4 

4.3

Custody & other

10.2 

10.8

10.0 

9.9 

40.9 

9.1

Post Trade Services - CC&G and Monte   Titoli

25.0 

26.0

22.0 

23.4 

96.5 

23.4

OTC - SwapClear

25.8 

26.8

27.6 

29.4 

109.6 

29.9

OTC - ForexClear / CDSClear

7.4 

7.3

6.9 

7.0 

28.6 

6.6

Fixed income

11.0 

11.6

11.0 

9.3 

42.9 

10.4

Commodities

11.2 

14.1

12.2 

- 

37.5 

-

Listed derivatives

13.2 

9.6

10.1 

11.4 

44.4 

9.4

Cash equities

9.1 

8.3

8.4 

9.1 

35.0 

9.2

Other

13.0 

5.5

6.2 

6.8 

31.4 

8.4

Post Trade Services - LCH.Clearnet

90.7 

83.2

82.5 

73.1 

329.4 

73.9

FTSE

45.9 

44.4

48.3 

48.2 

186.8 

51.2

Russell Indexes

- 

-

- 

10.0 

10.0 

33.8

Real time data

23.3 

21.3

21.3 

18.4 

84.3 

21.3

Other information

22.8 

22.3

23.4 

23.4 

91.9 

24.5

Information Services

92.0 

88.0

93.0 

100.0 

373.0 

130.8

MillenniumIT

10.5 

6.0

6.9 

6.3 

29.7 

9.8

Technology

8.1 

8.3

9.6 

10.3 

36.3 

9.8

Technology Services

18.6 

14.3

16.5 

16.6 

66.0 

19.6

Russell Investment Management (gross)

79.7 

79.7 

246.5

Other

1.3 

1.4

1.1 

1.6 

5.4 

0.9

Total Revenue

311.8 

299.9

292.7 

378.8 

1,283.2 

581.0

Net treasury income through CCP:

CC&G

9.4 

7.5

8.0 

7.7 

32.6 

6.8

LCH.Clearnet

14.1 

15.1

17.2 

13.6 

60.0 

13.4

Other income

1.9 

1.4

0.7 

1.3 

5.3 

1.3

LCH.Clearnet unrealised gain / (loss)

(0.6)

0.7

(0.3)

(0.3)

(0.5)

0.4  

Total income including unrealised

336.5 

324.6

318.3 

401.1 

1,380.6 

602.9

Total income excluding   unrealised

337.1 

323.9

318.6 

401.4 

1,381.1 

602.5

 Note: Minor rounding differences may mean quarterly and other segmental figures may differ slightly