London Stock Exchange revenues up eight per cent as it steps up battle to force through Deutsche Boerse merger
The London Stock Exchange (LSE) has posted a strong set of first quarter results as it ramps up its fight to secure the multi-billion pound merger with Deutsche Boerse (DB).
LSE Chairman, Donald Brydon, hit back at critics of the deal in a fiery exchange with shareholders as the results were announced: "We wouldn't be embarking on a merger if we thought there would be any problems."
Byrdon also point-blank dismissed the idea that a vote to leave the European Union would affect the deal.
Investors in LSE took their time to pour over the figures, eventually sending the shares up by 0.83 per cent to 2,782p in afternoon trading.
The figures
Total income from continuing operations for the FTSE operator climbed by nine per cent in the three months to 31 March to £387.6m.
Revenues – which do not include net treasury income from its central counterparty (CCP) businesses – were up by eight per cent to £358.9m.
All sections of LSE's business operations posted higher revenues, with its data – the information services division, where income was up 10 per cent to £141.5m – continuing to be the main money spinner.
Income at LSE's clearing house, LCH, which works on a number of other exchanges, grew by 15 per cent to £100.9m
Why it's interesting
A good set of results sets the scene for the final acts of the LSE-DB merger saga. The multi-billion pound tie-up has been on the cards for a while, but the American network, the Intercontinental Exchange (ICE) or European rival, Euronext, could yet spoil the party.
LSE said it was preparing documents for shareholders on the merits of the deal – which has the support of both companies – and said the merger represented "a compelling value enhancing opportunity through the creation of a leading global markets infrastructure group anchored in Europe".
Read more: European stock exchange operator tries to block LSE merger
That last bit – "anchored in Europe" – is presumably aimed at American ears.
Xavier Rolet, chief executive of the LSE, has got into a spot of both with the UK authorities of late given his outspoken remarks regarding the capabilities of ICE and his preference for a deal with DB.
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Today's results, LSE hopes, will focus investors' minds on the fundamentals of the deal, rather than any political wrangling.
What the London Stock Exchange said
Rolet welcomed LSE's "strong financial performance" and the company's commitment to "develop innovative new products and expand services and partnerships."
But the juicy comments were reserved for talk of the merger.
He said:
We recently announced our proposed merger with Deutsche Boerse. This presents a compelling opportunity to expand our business in an industry-defining combination, creating a global markets infrastructure group. With substantial cost synergies and multiple opportunities to extend our product offerings, we believe this transaction offers significant value and benefits to customers and shareholders