LSE profit slips, warns of Brexit volatility

London Stock Exchange Group said on Thursday that profit slipped in the first half of the year, although revenue and operating profit were higher and the company lifted its interim dividend.

For the six months to the end of June, profit after tax fell to £114.5m from £130.8m the year before, which included non-recurring merger-related expenses.

Revenue was up 9% to £721.9m, adjusted operating profit pushed 9% higher to £333.3m and the company declared an interim dividend of 12p per share, up 11.1% from the first half of last year.

LSE said the merger with Deutsche Boerse – announced in March – was making good progress, with shareholder approvals achieved in July and work underway on regulatory consents.

Chief executive Xavier Rolet said: “The group has delivered another good financial performance, with growth across all of our core business areas. In particular, FTSE Russell has performed well and LCH has made further good progress in its OTC clearing services. Our Capital Markets businesses have also performed well in a period marked by volatile market conditions.

“The group is well diversified both by business activity and by geography, with operations in the UK, continental Europe, United States and Asia. By successfully operating a full range of open access market infrastructure services, we are well positioned to navigate political and macroeconomic changes.”

LSE warned that any changes to the strategy or business models of its clients as a result of the UK’s vote to leave the European Union could affect the company’s strategy and may lead to client attrition.

“The uncertainty or the outcome may erode investors’ confidence and impact primary and secondary market volumes, assets based fees and clearing volumes in the UK. The results of the vote could also lead to market speculation regarding possible similar referendums in other EU countries and uncertainty regarding the future composition and direction of the EU.”

At 0945 BST, LSE shares were up 0.3% at 2,731p.