LondonStockExGroup LSE Half Yearly Report

  LondonStockExGroup (LSE) - Half Yearly Report

RNS Number : 2809R
London Stock Exchange Group PLC
16 November 2012




16 November 2012



                       LONDON STOCK EXCHANGE GROUP plc

                                      

                       ANNOUNCEMENT OF INTERIM RESULTS

                  FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

                                      

· Strong financial performance in challenging markets with good
contribution from the Group's Information Services, Post Trade Services and
Technology businesses



· FTSE performing well, with major US and European client wins announced;
range of new services and initiatives launched; further successful roll out of
MillenniumIT platforms; and continued success of UK and Italian retail bond
markets



· Total income up 10 per cent at £423.7 million (H1 FY 2012: £386.5
million)



· Revenue up 7 per cent to £349.8 million (H1 FY 2012: £328.1 million)



· Adjusted operating profit^1up 1 per cent at £217.2 million (H1 FY 2012:
£214.3 million); operating profit of £186.8 million (H1 FY 2012: £192.5
million)



· Adjusted basic EPS^1up 9 per cent at 51.8 pence (H1 FY 2012: 47.6
pence); basic EPS broadly stable at 43.0 pence (H1 FY 2012: 43.1 pence)



· Interim dividend up 4 per cent to 9.7 pence per share (H1 FY 2012: 9.3
pence per share)



· Successful inaugural retail bond on Group's ORB platform - increases
facility headroom and extends maturity of financing through a £300 million,
4.75 per cent 9 year bond



· Strong net cash inflow from operating activities of £172.5 million;
operating net debt to adjusted EBITDA was 1.4 times, in line with the position
at the start of the year 



· Regulatory and anti-trust processes are progressing in respect of the
acquisition of up to 60 per cent of LCH.Clearnet, with approval received from
French lead regulator; the Group remains in discussions to explore options
regarding potential implications of increased capital requirements for
LCH.Clearnet





Commenting on performance of the Group, Xavier Rolet, Chief Executive said:



"We have delivered a strong first half financial performance. The 10 per cent
uplift in total income highlights the benefits of our increasingly diversified
international Group and reflects growth from our Information, Post Trade and
Technology businesses.



"Good performances, business wins and development of new initiatives have
characterised another busy period for the Group. FTSE's recent significant US
and European client wins, the continued progress of our retail bond platforms
in Italy and the UK, the development of our International Board and the
successful migration to MillenniumIT trading systems, are all particular
highlights.



"We remain focused on realising operational and integration efficiencies,
developing growth opportunities and progressing our transaction with
LCH.Clearnet. We continue to adapt to an evolving regulatory landscape and
market conditions remain challenging in some areas, notably in Capital
Markets, but we remain strongly placed to benefit from market improvements and
the opportunities presented by industry changes."

^

^1 before amortisation of purchased intangibles and non-recurring items

All comparisons are against the same corresponding period in the previous year
unless stated otherwise



Further information is available from:



London Stock Exchange      Victoria Brough - Media         +44 (0) 20 7797
Group                                                      1222
                           Paul Froud - Investor Relations +44 (0) 20 7797
                                                           3322
Citigate Dewe Rogerson     Patrick Donovan/Grant Ringshaw  +44 (0) 20 7638
                                                           9571



Notes to editors:



About London Stock Exchange Group:



London Stock Exchange Group (LSE.L) sits at the heart of the world's financial
community. The Group operates a broad range of international equity, bond and
derivatives markets, including London Stock Exchange; Borsa Italiana; MTS,
Europe's leading fixed income market; and Turquoise, offering UK and Russian
derivatives trading, pan-European and US lit and dark equity trading. Through
its markets, the Group offers international business unrivalled access to
Europe's capital markets.



The Group is a leading developer of high performance trading platforms and
capital markets software and also offers its customers around the world access
to an extensive range of real-time and reference data products and
market-leading post-trade services. The Group is also home to a world leading
index provider FTSE, which creates and manages over 200,000 equity, bond and
alternative asset class indices.



Headquartered in London, United Kingdom with significant operations in Italy
and Sri Lanka, the Group employs around 1,900 people.



Further information on London Stock Exchange Groupcan be found at
www.londonstockexchangegroup.com



Chairman's Statement



Introduction



The Group has produced a strong first half financial performance in
challenging markets, with income growth in our Information Services, Post
Trade Services and Technology business segments. The good results are further
testament to the benefits of increased scope and diversification of our
business, reflecting the success of our strategy for increased expansion and
reach that we have been actively following for the past three years. We also
continue to focus on operational efficiencies, controlling costs which
remained flat on an underlying basis and working hard on the integration of
new businesses, such as FTSE, in to the Group. We have seen a busy period
with a number of successful business wins and development of new initiatives
as we seek further growth opportunities, through customer partnerships and new
services. We highlight the progress we have made, and the factors affecting
Group performance over the past six months, in the commentary below.



Operational Performance



The Information Services division delivered a headline 66 per cent increase in
revenue to £147.6 million, reflecting inclusion of FTSE since the acquisition
of full control in December 2011. On an organic and constant currency basis,
revenues increased 1 per cent. The number of professional users of real time
UK data at 30 September 2012 declined 8 per cent year on year to 86,000
although the number of users of Italian data grew 4 per cent over the same
period. Offsetting the reduction in real time sales was a 17 per cent
increase in revenue from other information services, with good performance in
particular from UnaVista, Sedol and Proquote.



The FTSE indices business produced a good performance, with revenues of £64.8
million. In October, FTSE announced that it has been selected by Vanguard,
one of the top three US asset management firms, as the index benchmark
provider for six international equity index funds with aggregate assets of
$170 billion as of 31 August 2012. This contract win represents the largest
ever international index provider benchmark switch, and helps to establish
FTSE as the third-largest equity ETF index benchmark provider globally as well
as helping cement a strong presence in the important US market. French
exchange-traded funds provider Lyxor also selected FTSE as the index provider
for two of its funds. Progress is being made to integrate FTSE into the Group
and achieve the planned cost and revenue synergies. Work is underway to
deliver IT savings, organisational changes are being made and new products
have been launched, such as global FX indices in partnership with Curex. With
the benefit of new business in H2, we expect FTSE will deliver double digit
revenue growth for the full financial year.



Post Trade Services produced another strong performance with total income,
including net treasury income, growing 6 per cent to £112.7 million, up 16 per
cent at constant currency. Treasury income through the CC&G central
counterparty (CCP) business increased 38 per cent at constant currency to
£68.1 million, as the quantum of initial cash margin held was 21 per cent
higher than the same period last year at an average €10.5 billion, and deposit
yields remained at elevated levels. Excluding treasury income, revenues for
clearing and settlement declined 13 per cent at constant currency, mainly
reflecting a reduction in trading of Italian equities and derivatives in the
period. In the Monte Titoli custody operations, the value of assets under
management increased to €3.19 trillion, with a 4 per cent increase in revenues
at constant currency.



During the period, Monte Titoli launched a new service to provide tri-party
collateral management through its X-Com service, which allows customers to
manage their investment strategies and financing more efficiently. Monte
Titoli also signed the ECB's T2S framework agreement and will be a first wave
participant in the project, which aims to provide a harmonized and competitive
European securities settlement infrastructure.



Proposed technical standards for CCPs under the forthcoming European Markets
Infrastructure Regulation, due to come into effect from early 2013, were
published at the end of September. Although the new regulatory framework is
likely to provide more stringent rules on regulatory capital, the Group has
stated that requirements would be met from CC&G's existing capital resources
and current year profit generation.



The proposed standards also require that a CCP's cash deposits placed with
financial institutions shall be subject to collateralised arrangements, with
95 per cent of such deposits collateralised with debt instruments meeting
certain conditions regarding, among other things, liquidity and credit and
market risk. As indicated at the time, the Group expects that as market
conditions improve it will see a more normalised return compared to recent
elevated levels and the recommendations, if adopted in their current form,
would further reduce net treasury income in the Group's financial year ended
31 March 2014 as a consequence of the proposed requirements in relation to
deposits of collateral. Although details of a revised investment approach are
not fully agreed and the new standards are not yet adopted, CC&G is already
adapting its investment policy in advance of the mandatory enforcement, with
in excess of €4 billion of cash margin currently invested on a fully
collateralised basis. Our latest assessment, given its strength in H1 and if
market conditions are maintained, is that net treasury income will slightly
exceed current FY 2013 market estimates.



Revenue for the Group's Capital Markets segment, which includes primary and
secondary market activities, reduced 19 per cent to £129.7 million as markets
continued to be impacted by macro economic uncertainties and trading and
issuance levels were consequently subdued.



In primary markets, the total amount of capital raised was £7.9 billion, down
on the strong comparable period last year (H1 FY 2012: £23.3 billion).
Nonetheless, our markets have remained active and have provided capital
raising for a number of domestic and international issuers, with 43 companies
admitted to trading on AIM, four companies coming to market in Italy and 12 in
London, including Sberbank, the largest commercial bank in Russia, which
joined our Main Market in September and became our fourth largest ever
international capital raising.



ORB, our retail bond market in London, continued to make good progress with a
number of new issuers, including its first Renminbi-denominated retail bond.
Following the Group's own successful inaugural retail bond last month, ORB has
successfully raised in excess of £2.8 billion for companies from the retail
investor community since launch in 2010, with £1.3 billion raised since March
2012. In Italy, the MOT retail bond market also performed well and last month
saw more than €18 billion raised on its market with the third issue of BTP
Italia, the biggest ever bond sale in Europe.



In secondary markets, average daily value traded in the UK cash equities
market declined 18 per cent to £4.1 billion, while in Italy, the average daily
number of trades reduced 15 per cent to 227,000, indicative of widespread
declines in equities trading across Europe. Trading in derivatives was also
similarly affected, with a 32 per cent overall decline across the IDEM and
Turquoise markets. IDEM recently announced the launch of the FTSE 100
Mini-future, the first Italian futures contract based on the euro denominated
FTSE 100 index.



The fixed income business delivered a resilient performance with trading on
MOT up 26 per cent and MTS repo markets flat year on year. MTS cash markets
declined 16 per cent although, within this segment, trading increased on
BondVision, the dealer to client electronic bond market. During the period
MTS announced plans to launch a daily repo index series for the euro, in
conjunction with other partners. The index series will include indices for a
number of European sovereign bond markets.



Revenues for Technology Services increased 3 per cent to £25.6 million, up 10
per cent at constant currency. MillenniumIT performed well, with revenues up
36 per cent at constant currency, as its technology successfully went live on
three markets in three continents during the period; five different trading
platforms, including cash equities, fixed income and structured products at
Borsa Italiana, now hosted in Milan, successfully migrated to Millennium
Exchange, while Johannesburg Stock Exchange and the Mongolian Stock Exchange
also went live on MillenniumITtrading platforms. Since the period end,
trading has successfully gone live on MillenniumIT technology on Oslo Børsand
it was also recently announced that a MillenniumIT surveillance system is to
be used by London Metal Exchange.



In July, the Group announced the signing of a Memorandum of Understanding with
the Singapore Stock Exchange (SGX) to allow the largest and most actively
traded stocks on each exchange to be traded by their respective member firms.
The trading of SGX-listed shares on LSE is expected to launch in the near
future.



Board and Management changes



During the period a number of key Board and senior management changes and
appointments were announced. Doug Webb stepped down as Chief Financial Officer
after four busy years in the role. He played a significant part in the recent
strategic diversification, strong financial performance and growth of the
organisation and the Board is grateful for his contribution over this time.
David Warren joined the Group as CFO in July, bringing a wealth of senior
level experience both in banking and in running exchanges, including 9 years
as CFO at Nasdaq OMX.

Alexander Justham was appointed to the new role of CEO London Stock Exchange
plc and Director of Regulation & Public Affairs. He will draw not only on his
experience in banking but also from four years in regulation as Director of
Markets at the FSA. Elsewhere, existing senior executives took on new or
additional roles: Antoine Shagoury was appointed Group COO; David Lester was
appointed Group Director of Strategy; and Mark Makepeace joined the Executive
Committee as Group Director of Information Services in addition to his role as
CEO of FTSE. These appointments further strengthen the Group's executive
management team as the business continues to pursue its strategic and
operational ambitions.



LCH.Clearnet



Regulatory and anti-trust processes are progressing in respect of the
announced acquisition of up to a 60 per cent stake in LCH.Clearnet. The
competition authorities in the UK and Portugal are continuing to review the
proposed transaction with the UK OFT and Portuguese competition authority
decisions expected before the end of 2012. Clearances have been received from
the Spanish competition authority, CNC, and the French regulator, ACP.



Following the release in September of proposed technical standards for CCPs
under the forthcoming European Markets Infrastructure Regulation, LCH.Clearnet
announced that it estimates that it will be required to increase its
regulatory capital by between €300 million to €375 million. The Group is in
discussions with LCH.Clearnet regarding the potential financial implications
of the proposed technical standards and the measures LCH.Clearnet is exploring
to ensure it can continue to deliver an acceptable return on its capital
employed. The Group will disclose the outcome of these discussions in due
course.



Financial Summary



Unless otherwise stated, all figures below refer to the six months ended 30
September 2012. Comparative figures are for the six months ended 30 September
2011 (H1 FY 2012). Variance is also provided at organic and constant
currency. The basis of preparation is set out at the end of this report.



                                                                   Organic and
                                         Six months ended             constant
                                             30 September             currency
                                             2012    2011 Variance    variance
                                               £m      £m        %           %
Revenue
Capital Markets                            129.7  159.8   (19%)      (16%)
Post Trade Services                         44.6   52.4   (15%)       (6%)
Information Services                       147.6   89.0     66%         1%
Technology Services                         25.6   24.8      3%        10%
Other revenue                                2.3    2.1     10%        15%
Total revenue                              349.8  328.1      7%       (8%)
Net treasury income through CCP business    68.1   54.3     25%        38%
Other income                                 5.8    4.1     41%        45%
Total income                               423.7  386.5     10%       (1%)
Operating expenses                        (206.5) (174.5)     18%         3%
Share of profit of JVs and associates           -    2.3       -
Amortisation of purchased intangibles      (30.4)  (21.8)     39%
and non-recurring items
Operating profit                           186.8  192.5    (3%)         8%
Adjusted operating profit*                 217.2  214.3      1%       (2%)
Basic earnings per share (p)                43.0   43.1    (0%)
Adjusted basic earnings per share (p)*      51.8   47.6      9%
Dividend (p)                                 9.7    9.3      4%
* before amortisation of purchased intangibles and non-recurring items



The Group produced a strong financial performance in challenging markets.
Total income rose 10 per cent to £423.7 million (H1 FY 2012: £386.5 million);
revenue increased 7 per cent to £349.8 million (H1 FY 2012: £328.1 million)



Operating expenses, before amortisation of purchased intangibles and
non-recurring items, rose 18 per cent to £206.5 million (H1 FY 2012: £174.5
million), principally reflecting FX impacts and £35.3 million operating costs
relating to FTSE. Adjusting for currency changes, estimated inflation and the
impact of the acquisitions of FTSE and TRS, operating costs remained flat,
reflecting tight control of our underlying cost base.



Adjusted operating profit for the period, before amortisation of purchased
intangibles and non-recurring items, increased 1 per cent to £217.2 million
(H1 FY 2012: £214.3 million).



Net finance costs were £21.4 million, up from £19.2 million in H1 last year,
reflecting the utilisation of credit facilities to fund the acquisition of the
outstanding 50 per cent stake in FTSE in December 2011. The underlying
effective Group tax rate was 29.0 per cent, down slightly on the rate for the
year ended 31 March 2012 (29.2 per cent).



Basic earnings per share were 43.0 pence, in line with last year (H1 FY 2012:
43.1 pence). Adjusted basic earnings per share increased 9 per cent to 51.8
pence (H1 FY 2012: 47.6 pence).



During the period theGroup received a non-recurring payment of C$29 million
(£18.3 million) from TMX Group in respect of last year's terminated merger
transaction.



Net cash inflow from operating activities was £172.5 million (H1 FY 2012:
£154.2 million). Capital expenditure in the period amounted to £26.7
million. Net cash generated after capex, other investments and dividends was
£79.5 million (H1 FY 2012: £113.5 million). Free cash flow per share (pre
dividend) was 50.0 p (H1 FY 2012: 63.0p)



At 30 September 2012adjusted net debt was £662.6 million (after setting aside
£200 million of cash for regulatoryand operationalsupport purposes) while
drawn borrowings of £713.2 million are £44 million lower than at the start of
the current financial year. Committed credit lines available for general
group purposes at 30 September 2012 totalled £1.35 billion,with £750
millionextendingto 2015or beyond.



Since the period end, the Group successfully issued a £300 million, 4.75% 9
year sterling fixed rate bond on the Group's ORB platform. This bond provides
a more diversified source of longer term financing for the Group and extends
debt maturities out to 2021.



The Group had net assets of £1,458.3 million at 30 September 2012 (31 March
2012: £1,449.7 million). As usual, the central counterparty clearing business
assets and liabilities within CC&G largely offset each other and are shown
gross on the balance sheet as the amounts receivable and payable are with
different counterparties.



Interim Dividend



The Directors have declared an interim dividend of 9.7 pence per share, an
increase of 4 per cent on the interim dividend paid last year. The interim
dividend will be paid on 7 January 2013 to shareholders on the register on 7
December 2012.



Current Trading and Outlook



The Group has delivered a strong first half performance, demonstrating the
benefits of a more diversified, international business. Market conditions
continue to present challenges in some areas, notably in our Capital Markets
businesses, although the successful Direct Line IPO (the largest UK equity
capital raising this year) demonstrates that our markets remain active.



Looking ahead, the Group is well placed as we continue to adjust our business
to an evolving industry and regulatory landscape. We will continue our focus
on operational and integration efficiencies, progressing the transaction with
LCH.Clearnet as well as developing further opportunities to grow and diversify
the Group.





Chris Gibson-Smith

Chairman

16 November 2012



Operating Performance - Key statistics



To assist investors in understanding the underlying performance of the Group,
percentage changes are also presented on a constant currency basis.



Capital Markets



Capital Markets comprises the Group's primary markets activities, providing
access to capital for corporates and others, and the secondary market trading
of cash equities, derivatives and fixed income.



Capital Markets
                             Six months ended          Variance at
                               30 September               constant
                                 2012    2011 Variance    currency
Revenue                            £m      £m        %           %
Primary Markets
Annual fees                      19.2    20.1     (4%)        (2%)
Admission fees                   14.5    20.4    (29%)       (28%)
                                 33.7    40.5    (17%)       (15%)
Secondary Markets
Cash equities UK & Turquoise     40.1    52.1    (23%)       (23%)
Cash equities Italy              12.2    16.2    (25%)       (17%)
Derivatives                       6.8     9.0    (24%)       (18%)
Fixed income                     15.9    18.8    (15%)        (8%)
                                 75.0    96.1    (22%)       (19%)
Other                            21.0    23.2     (9%)        (3%)
Total revenue                   129.7   159.8    (19%)       (16%)



Capital Markets - Primary Markets
                                          Six months ended
                                              30 September Variance
                                              2012    2011        %
New Issues
UK Main Market, PSM & SFM                      12     39   (69%)
UK AIM                                         43     58   (26%)
Borsa Italiana                                  4      5   (20%)
Total                                          59    102   (42%)
Company Numbers (as at period end)
UK Main Market, PSM & SFM                   1,393  1,457    (4%)
UK AIM                                      1,107  1,156    (4%)
Borsa Italiana                                288    294    (2%)
Total                                       2,788  2,907    (4%)
Market Capitalisation (as at period end)
UK Main Market (£bn)                        1,885  1,713     10%
UK AIM (£bn)                                   64     64       -
Borsa Italiana (€bn)                          345    337      2%
Borsa Italiana (£bn)                          275    292    (6%)
Total (£bn)                                 2,224  2,069      7%
Money Raised (£bn)
UK New                                        4.1   11.5   (64%)
UK Further                                    2.4    3.3   (27%)
Borsa Italiana new and further                1.4    8.5   (84%)
Total (£bn)                                   7.9   23.3   (66%)



Capital Markets - Secondary Markets
                                       Six months ended
                                           30 September Variance
                                           2012    2011        %
Totals for period
UK value traded (£bn)                       508     626    (19%)
Borsa Italiana (no of trades m)            28.6    34.2    (16%)
Turquoise value traded (€bn)              200.8   276.3    (27%)
SETS Yield (basis points)                  0.68    0.70     (3%)
Average daily
UK value traded (£bn)                       4.1     5.0    (18%)
Borsa Italiana (no of trades '000)          227     267    (15%)
Turquoise value traded (€bn)               1.57    2.14    (27%)
Derivatives (contracts m)
Turquoise                                  13.4    21.7    (38%)
IDEM                                       20.4    28.3    (28%)
Total                                      33.8    50.0    (32%)
Fixed Income
MTS cash and Bondvision (€bn)            1,103  1,318    (16%)
MTS money markets (€bn term adjusted)   32,977 33,008     (0%)
MOT number of trades (m)                   2.68    2.12      26%



Post Trade Services



The Post Trade Services division principally comprises the Group's
Italian-based clearing, settlement and custody businesses. 



                                         Six months ended          Variance at
                                             30 September             constant
                                             2012    2011 Variance    currency
                                               £m      £m        %           %
Revenue
Clearing                                    17.7   21.6   (18%)      (10%)
Settlement                                   7.0    9.8   (29%)      (21%)
Custody & other                             19.9   21.0    (5%)         4%
Total revenue                               44.6   52.4   (15%)       (6%)
Net treasury income through CCP business    68.1   54.3     25%        38%
Total income                               112.7  106.7      6%        16%



                                              Six months ended
                                                  30 September  Variance
                                                  2012    2011         %
CC&G Clearing (m)
Equity clearing (no of trades)                   30.1   36.1    (17%)
Derivative clearing (no of contracts)           20.4   28.3    (28%)
Total                                            50.5   64.4    (22%)
Open interest (contracts as at period end)        4.8    5.6    (14%)
Initial margin held (average €bn)                10.5    8.7      21%
Monte Titoli
Pre Settlement instructions (trades m)           13.8   16.8    (18%)
Settlement instructions (trades m)               12.6   17.4    (28%)
Total Settlement                                 26.4   34.2    (23%)
Custody assets under management (average €tn)    3.19   3.05       5%



Information Services



The Information Services division consists of real time data products and a
number of other discrete businesses, including Global Indices products, Trade
Processing operations, Desktop and Work Flow products.



                                         Six months ended          Variance at
                                             30 September             constant
                                             2012    2011 Variance    currency
                                               £m      £m        %           %
Revenue
Real time data                              45.3   50.2   (10%)       (7%)
Other information services                  37.5   32.1     17%        13%
FTSE royalties                                 -    6.7       -          -
FTSE revenue                                64.8      -       -          -
Total revenue                              147.6   89.0     66%         1%
Total revenue excluding FTSE revenue and
royalties & TRS revenue                     81.1   82.3    (1%)         1%



                                           30 September  Variance
                                          2012     2011         %
UK Terminals
Professional - UK                      35,000  38,500     (9%)
Professional - International           51,000  54,500     (6%)
Total                                  86,000  93,000      (8%)
Borsa Italiana Professional Terminals 140,000 134,000       4%



Technology Services



Technology Services comprises technology connections and data centre services
for clients of London Stock Exchange and Borsa Italiana, plus the MillenniumIT
software business, based in Sri Lanka, which provides technology for the Group
as well as third party sales and enterprise services.



              Six months ended          Variance at
                  30 September             constant
                  2012    2011 Variance    currency
                    £m      £m        %           %
Revenue
MillenniumIT     11.4    9.6     19%        36%
Technology       14.2   15.2    (7%)       (4%)
Total revenue    25.6   24.8      3%        10%



Basis of Preparation



Results for the Italian business have been translated into Sterling using the
exchange rates set out below. Constant currency growth rates have been
calculated by translating prior period results at the average exchange rate
for the current period.



                  Closing € : £ rate Average € : £ rate for the period ended
30 September 2012              €1.25                                   €1.25
30 September 2011              €1.15                                   €1.14
31 March 2012                  €1.20                                   €1.16



Further information



The Group will host a presentation of its Interim Results for analysts and
institutional shareholders today at 9.30am at 10 Paternoster Square, London
EC4M 7LS. The presentation will be accessible via live web cast which can be
viewed at
http://www.londonstockexchangegroup.com/investor-relations/investor-relations.htm,
or listened to on +44 (0) 1452 585 937. For further information, please call
the Group's Investor Relations team on +44 (0) 20 7797 3322.



CONSOLIDATED INCOME STATEMENT



                                                  Six months ended  Year ended

                                                      30 September    31 March
                                                    2012      2011        2012
                                               Unaudited Unaudited
                                         Notes        £m        £m          £m
Revenue                                           349.8    328.1      679.8
Net treasury income through CCP business           68.1     54.3      126.9
Other Income                                        5.8      4.1        8.1
Total Income                                 2    423.7    386.5      814.8
Expenses
Operating expenses before amortisation
of purchased intangible assets and
non-recurring items                          3  (206.5)  (174.5)    (378.8)
Share of profit after tax of joint
ventures/associates                                    -      2.3        5.9
Operating profit before amortisation of
purchased intangible assets and
non-recurring items                               217.2    214.3      441.9
Amortisation of purchased intangible
assets                                       4   (44.6)   (20.0)     (54.9)
Non-recurring items                          4     14.2    (1.8)     (28.5)
Operating profit                             2    186.8    192.5      358.5
Profit on disposal/acquisition of shares
in subsidiary and joint venture              4         -      6.4      323.8
Finance income                                      7.7      8.2       16.8
Finance costs                                    (29.1)   (27.4)     (59.4)
Net finance expense                          5   (21.4)   (19.2)     (42.6)
Profit before taxation                            165.4    179.7      639.7
Taxation on profit before amortisation
of purchased intangible assets and
non-recurring items                              (56.4)   (57.4)    (116.9)
Taxation on amortisation of purchased
intangible assets and non-recurring
items                                        4      5.5      1.7        8.6
Total taxation                               6   (50.9)   (55.7)    (108.3)
Profit for the financial period                   114.5    124.0      531.4
(Loss)/profit attributable to
non-controlling interests                         (1.5)      7.9        9.4
Profit attributable to equity holders             116.0    116.1      522.0
                                                  114.5    124.0      531.4
Basic earnings per share                     7     43.0p     43.1p      193.6p
Diluted earnings per share                   7     42.4p     42.5p      190.9p
Adjusted basic earnings per share            7     51.8p     47.6p      100.6p
Adjusted diluted earnings per share          7     51.0p     46.9p       99.2p
Dividend per share in respect of the
financial period:                            8
Dividend per share paid during the
period                                             19.0p     18.0p       27.3p
Dividend per share proposed for the
period                                              9.7p      9.3p       28.3p



CONSOLIDATED STATEMENT of comprehensive income



                                                  Six months ended  Year ended

                                                      30 September    31 March
                                                    2012      2011        2012
                                               Unaudited Unaudited
                                                      £m        £m          £m
Profit for the financial period                   114.5    124.0      531.4
Other comprehensive income:
Defined benefit pension scheme actuarial loss     (5.1)   (39.1)     (47.6)
Cash flow hedge                                     0.1        -          -
Net investment hedge                               15.9      6.8       15.6
Exchange loss on translation of foreign
operations                                       (56.3)   (27.2)     (75.7)
Tax related to items not recognised in income
statement                                           1.7     10.5       12.7
Other comprehensive expense for the financial
period                                           (43.7)   (49.0)     (95.0)
Total comprehensive income for the financial
period                                             70.8     75.0      436.4
Attributable to non-controlling interests         (4.0)      6.4        9.5
Attributable to equity holders                     74.8     68.6      426.9
                                                   70.8     75.0      436.4



CONSOLIDATED balance sheet



                                                      30 September    31 March
                                                   2012       2011        2012
                                              Unaudited  Unaudited
                                       Notes         £m         £m          £m
Assets
Non-current assets
Property, plant and equipment                     79.9      62.0       73.3
Intangible assets                          9   2,016.4   1,342.6    2,117.4
Investment in joint ventures                        -      17.9         -
Investment in associates                          11.4       0.6        0.6
Deferred tax assets                               17.4      13.6       16.8
Derivative financial instruments          12      18.9        -        5.2
Available for sale investments            12       0.4       0.4        0.4
Other non-current assets                           0.2       0.3        0.3
                                               2,144.6   1,437.4    2,214.0
Current assets
Inventories                                        1.7       3.8        2.0
Trade and other receivables               11     162.1     127.2      178.3
Derivative financial instruments          12       0.2       0.3         -
CCP financial assets                         120,617.0 124,773.4   93,619.6
CCP cash and cash equivalents
(restricted)                                   7,448.0   4,794.7    6,137.3
CCP clearing business assets              12 128,065.0 129,568.1   99,756.9
Current tax                                       15.6      22.2       41.8
Assets held at fair value                 12       5.9      12.3       14.6
Cash and cash equivalents                 12     231.5     379.9      216.0
                                             128,482.0 130,113.8  100,209.6
Assets held for sale                                -       9.3        6.4
Total assets                                 130,626.6 131,560.5  102,430.0
Liabilities
Current liabilities
Trade and other payables                  13     201.1     164.7      233.7
CCP clearing business liabilities         12 128,043.0 129,564.8   99,747.2
Current tax                                       48.0      49.2       72.5
Borrowings                                14     203.2       0.4       10.5
Provisions                                12       2.5       3.7        2.5
                                             128,497.8 129,782.8  100,066.4
Non-current liabilities
Borrowings                                14     510.0     499.0      746.6
Other non-current payables                13       2.7        -        3.8
Derivative financial instruments                    -       5.9        2.1
Deferred tax liabilities                         110.1      79.2      117.3
Retirement benefit obligations            10      21.4       7.7       16.5
Provisions                                12      26.3      26.6       27.6
                                                 670.5     618.4      913.9
Total liabilities                            129,168.3 130,401.2  100,980.3
Net assets                                     1,458.3   1,159.3    1,449.7
Equity
Capital and reserves attributable to
the Company's equity holders
Share capital                                     18.8      18.8       18.8
Retained losses                                (208.9)   (616.6)    (262.9)
Other reserves                                 1,583.3   1,661.9    1,620.9
                                               1,393.2   1,064.1    1,376.8
Non-controlling interests                         65.1      95.2       72.9
Total equity                                   1,458.3   1,159.3    1,449.7



CONSOLIDATED cash flow statement



                                                  Six months ended  Year ended

                                                      30 September    31 March
                                                    2012      2011        2012
                                               Unaudited Unaudited
                                         Notes        £m        £m          £m
Cash flow from operating activities
Cash generated from operations              16    246.0    231.4      462.4
Interest received                                   1.2      1.6        3.5
Interest paid                                    (22.3)   (19.8)     (44.0)
Corporation tax paid                             (37.5)   (34.0)     (73.4)
Withholding tax paid                             (14.9)   (25.0)     (45.5)
Net cash inflow from operating
activities                                        172.5    154.2      303.0
Cash flow from investing activities
Purchase of property, plant and
equipment                                        (15.2)    (7.2)     (17.1)
Purchase of intangible assets                    (11.5)    (7.6)     (16.3)
Proceeds from disposal of joint venture               -        -        1.3
Investment in other acquisition                       -        -     (15.0)
Investment in subsidiaries                            -        -    (481.1)
Investment in associates                         (11.2)        -          -
Proceeds from sale of subsidiary                      -     28.4       28.4
Dividends received                                  0.2      1.8        1.8
Net cash inflow from acquisitions                     -        -        7.6
Proceeds from investment by
non-controlling interest in subsidiary                -        -        4.3
Net cash (outflow)/inflow from investing
activities                                       (37.7)     15.4    (486.1)
Cash flow from financing activities
Dividends paid to shareholders                   (51.2)   (48.5)     (73.6)
Dividends paid to non-controlling
interests                                         (4.1)    (7.6)     (12.8)
Proceeds from own shares on exercise of
employee share options                                -      1.3        2.3
Outflow from share acquisitions                  (13.9)        -          -
(Repayments)/proceeds from borrowings            (43.9)      0.3      224.3
Net cash (outflow)/inflow from financing
activities                                      (113.1)   (54.5)      140.2
Increase/(decrease) in cash and cash
equivalents                                        21.7    115.1     (42.9)
Cash and cash equivalents at beginning
of period                                         216.0    267.0      267.0
Exchange losses on cash and cash
equivalents                                       (6.2)    (2.2)      (8.1)
Cash and cash equivalents at end of
period                                            231.5    379.9      216.0



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY



                 Attributable to equity holders of the
                                Company
                                                  Total
                Ordinary Retained          attributable
                   share  (loss)/    Other    to equity Non-controlling    Total
                 capital earnings reserves      holders       interests   equity
                      £m       £m       £m           £m              £m       £m
1 April 2011       18.8 (662.9) 1,681.0     1,036.9          100.1 1,137.0
Total
comprehensive
income for the
financial
period                -    87.7  (19.1)        68.6            6.4    75.0
Final dividend
relating to the
year ended 31
March 2011            -  (48.5)       -      (48.5)              -  (48.5)
Employee share
scheme expenses       -     7.1       -         7.1              -     7.1
Dividend
payments to
non-controlling
interests             -       -       -           -         (11.3)  (11.3)
30 September
2011               18.8 (616.6) 1,661.9     1,064.1           95.2 1,159.3
Total
comprehensive
income for the
financial
period                -   399.3  (41.0)       358.3            3.1   361.4
Interim
dividend
relating to the
year ended 31
March 2012            -  (25.1)       -      (25.1)              -  (25.1)
Employee share
scheme expenses       -     7.0       -         7.0              -     7.0
Purchase of
non-controlling
interests             -  (27.5)       -      (27.5)         (25.4)  (52.9)
31 March 2012      18.8 (262.9) 1,620.9     1,376.8           72.9 1,449.7
Total
comprehensive
income for the
financial
period                -   112.4  (37.6)        74.8          (4.0)    70.8
Final dividend
relating to the
year ended 31
March 2012            -  (51.2)       -      (51.2)              -  (51.2)
Employee share
scheme expenses       -   (7.2)       -       (7.2)              -   (7.2)
Dividend
payments to
non-controlling
interests             -       -       -           -          (3.8)   (3.8)
30 September
2012               18.8 (208.9) 1,583.3     1,393.2           65.1 1,458.3



The other reserves are set out on page 73 of the Group's Annual Report for the
year ended 31 March 2012. The movement in the current period comprises a
charge of £53.6m to the foreign exchange reserves and a credit of £16.0m to
the hedging reserve, both of which are distributable reserves. The balance
held at 30 September 2012 includes £1,372.6m of distributable reserves.



NOTES TO THE FINANCIAL INFORMATION



The Interim Report for London Stock Exchange Group plc ('the Group' or 'the
Company') for the six months ended 30 September 2012 was approved by the
Directors on 16 November 2012.



1. Basis of Preparation and Accounting Policies



This Interim Report has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and in accordance with
International Accounting Standard (IAS) 34 - 'Interim Financial Reporting'.



The accounting policies used are consistent with those set out on pages 74 to
77 of the Group's Annual Report for the year ended 31 March 2012, with the
exception of the changes in the standards identified below:



The following standards have been issued by the International Accounting
Standards Board (IASB) and IFRS Interpretations

Committee (IFRIC) and have been adopted in these condensed consolidated
interim financial statements:



Amendments to IFRS 1, 'First time adoption' - exemption for severe
hyperinflation and removal of fixed dates;

Amendment to IFRS 7, 'Financial instruments: Disclosures' - disclosures on
transfers of financial assets;

Amendment to IAS 12, 'Income taxes' - deferred tax accounting for investment
properties; and

IFRS various Annual improvements 2012.



The adoption of these standards did not have a material impact on these
condensed consolidated interim financial statements.



The following standards and interpretations were issued by the IASB and IFRIC
since the last Annual Report, but have not been adopted either because
theywere not endorsed by the European Union (EU) at 30 September 2012 or they
are not yet mandatory and the Group has not chosen to early adopt. The impact
on the Group's financial statements of the future standards, amendments and
interpretations is still under review, but the Group does not expect any of
these changes to have a material impact on the results or the net assets of
the Group:



International accounting standards and interpretations          Effective date
Amendment to IAS 1, 'Presentation of financial statements' -                 
presentation of items
                                                                   1 July 2012
of other comprehensive income
IAS 19 (revised) 'Employee benefits                             1 January 2013
Amendment to IFRS 7, 'Financial instruments: Disclosures'       1 January 2013
IFRS 10, 'Consolidated financial statements'                    1 January 2013
IFRS 11, 'Joint arrangements'                                   1 January 2013
IFRS 12, 'Disclosure of interests in other entities'          1 January 2013
IFRS 13, 'Fair value measurement'                               1 January 2013
IAS 32, 'Financial instruments: Presentation'                   1 January 2014



The preparation of the interim report requires management to make estimates
and assumptions that affect the reported income and expense, assets and
liabilities and disclosure of contingencies at the date of the interim
report. Although these estimates and assumptions are based on management's
best judgment at the date of the Interim Report, actual results may differ
from these estimates.



For these condensed consolidated interim financial statements the Group is not
adopting the columnar format for its consolidated income statement as stated
in the Group basis of preparation and accounting policies.



The statutory financial statements of London Stock Exchange Group plc for the
year ended 31 March 2012, which carried an unqualified audit report, have been
delivered to the Registrar of Companies and did not contain a statement under
section 498 of the Companies Act 2006.



The interim report is unaudited but has been reviewed by the auditors and
their review opinion is included in this report.



The interim report does not constitute statutory financial statements within
the meaning of section 434 of the Companies Act 2006.



2. Segmental Information
Segmental disclosures for the six months ended 30 September 2012 are as follows:
                            Post
                Capital    Trade Information Technology

                Markets Services    Services   Services  Other Eliminations   Group
                     £m       £m          £m         £m     £m           £m      £m
Revenue from
external
customers        129.7    44.6      147.6      25.6   2.3          -  349.8
Inter-segmental
revenue             -      -         -      10.9    -      (10.9)     -
Revenue          129.7    44.6      147.6      36.5   2.3      (10.9)  349.8
Net treasury
income through
CCP business        -    68.1         -        -    -          -   68.1
Other Income        -      -         -        -   5.8          -    5.8
Total Income     129.7   112.7      147.6      36.5   8.1      (10.9)  423.7
Operating
profit/(loss)
before
amortisation of
purchased
intangible
assets and
non-recurring
items             58.0    86.2       72.6       1.2 (0.2)       (0.6)  217.2
Amortisation of
purchased
intangible
assets                                                                      (44.6)
Non-recurring
items                                                                         14.2
Operating
profit                                                                       186.8
Net finance
expense                                                                     (21.4)
Profit before
taxation                                                                     165.4
Other income
statement items
Depreciation
and software
amortisation    (11.5)   (2.3)      (5.3)     (0.7) (0.1)          - (19.9)



Segmental disclosures for the six months ended 30 September 2011 (restated) are as
follows:
                            Post
                Capital    Trade Information Technology

                Markets Services    Services   Services      Other Eliminations  Group
                     £m       £m          £m         £m         £m           £m     £m
Revenue from
external
customers        159.8    52.4       89.0      24.8       2.1           - 328.1
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