The London Stock Exchange (LSE) emerged a winner despite tough market conditions, to accomplish its quarterly growth forecasts with acquisitions and expansion into information and technology sectors boosted its revenues.
The British exchange reported on Wednesday that its revenues in the three months to the end of June rose 10% year-on-year to £209.5 million, roughly in line with a forecast for £210.3 million, despite weak trading in its core capital markets business.
Amidst concerns over the weakness of the initial public offering market, LSE Group shares fell 1.8% to 994 points, but analysts have noted that the shares have leapt 25% since the start of the year, owing to the group’s diversification strategy.
The boost in revenues was mainly attributed to the inclusion of an estimated £35million from the FTSE index business, which the group bought from Pearson in December 2011. Revenue from information services business, and development of trading technology platforms in equity and fixed income, helped offset the 15% fall in capital market revenues. The fall was caused by low initial public offering activity and weak secondary trading volumes amidst turbulent market conditions.
Xavier Rolet, chief executive of LSE Group, said the overall performance “reflects our broad suite of products and services and the increased diversification of the group.” Investors and strategists supported Rolet’s interpretation of the numbers, generally focusing on the upbeat performance in information services and the resilience of its post-trade business, rather than worrying about the dip in capital market revenues.