Income on LSE soars to £308.9 million

High levels of activity boosted the London Stock Exchange's third-quarter results and the number of share issues nearly doubled in the period, the company announced today.

Revenues rose across all divisions - capital markets, post trade, information services and technology - making a combined total of £272 million for the three months to end December.

This was 13% more than the same period in 2012, while income in the third quarter soared 48% to £308.9 million from £208.9 million the previous year.

Much of the welcome news was supplied by capital markets, where revenue climbed 21% to £80.1 million from £66.3 million in 2012. There was also a £61.2 million contribution from LCH Clearnet Group, the multi-national clearing house acquisition, and a 17% rise in revenues from Technology Services driven by MillenniumIT.

Chief executive of the London Stock Exchange Group Xavier Rolet said that the integration of LCH Clearnet remains a prime focus, with a number of detailed programmes underway to gain further benefits from the transaction.

Secondary markets also benefited from improvements in cash equity and fixed income trading volumes, the exchange operator said. Post Trade Services (Italy) revenues made steady progress on the back of growth in clearing volumes and settlement and custody.

These high levels of capital-raising activity are expected to continue. London's cluster of start-ups is preparing for the float of online delivery service Just Eat in April or May at a valuation of between £700m and £900m.

That would equate to roughly 70 to 90 times the company's projected 2013 earnings - making it a far cry from Ocado's float in 2010, which was forced to cut its price range at the eleventh hour.

Contrarian ideas

Contrarian investors might take note however that the number of new issues comes at a time when the FTSE 100 (UKX) is just 100 points short of its all time high set in 1999 at the height of the dotcom boom, and we all know what happened next.

Last week the LSE appointed Sherry Coutu and Joanna Shields as non-executive directors. The pair bring deep knowledge of the information technology sector, reflecting the group's focus on harnessing technology solutions.

Coutu is a former chief executive officer of Interactive Investor and member of the advisory boards at Linkedin.com and Zoopla.com.

Shields was appointed chairman and CEO of Tech City UK and business ambassador for digital industries in 2012 and has steered a number of high growth businesses in the technology sector to successful exits including Bebo and Veon.