1st Quarter Results
29 April 2015
LONDON STOCK EXCHANGE GROUP plc
INTERIM MANAGEMENT STATEMENT
FOR THE PERIOD TO 28 APRIL 2015, INCLUDING REVENUES AND KPIs FOR THE THREE MONTHS ENDED 31 MARCH 2015 (Q1)
· 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
|
Capital Markets - Primary Markets |
|
|
|
|
|
|
|
|
|
|
|
|
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%) |
|
Borsa Italiana Professional Terminals |
130,000 |
|
126,000 |
3% |
|
|
|
|
|
|
|
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
This information is provided by RNS
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