Flotations lift London Stock Exchange Q1 profits
The London Stock Exchange reported a boost to profits from a surge in flotations and announced a £938m rights issue to bankroll its proposed acquisition of US financial index business Frank Russell.
The LSE said listings had bounced back in the first quarter with an increase in both the number of companies joining its markets and the amount of money raised.
It said 78 companies joined the market in the three months to 30 June against 33 a year ago. Capital raised across the group's equity markets through new issues and further issues increased to £19.9bn from £6.1bn last time with strength in both domestic and international markets.
New issues stayed strong in July with 28 new issues on the group's UK and Italian markets, compared with 25 in July 2013. Money raised in the month doubled to £5.2bn.
New issue activity continued in August, with seven initial public offerings so far in what was normally a seasonally quiet period.
Adjusted pre-tax profit in the first quarter to 30 June rose 26% to £129.8m against £103.1m at the same time a year ago and pre-tax profit lifted to £83.6m from £59.7m last time.
Revenue increased by a fifth overall and 12% on a constant currency basis to £300m, with growth in nearly all parts of its business.
The LSE said it was raising about £938m to help it buy Frank Russell from Northwestern Mutual and the minority shareholders of Russell for £1.62bn.
The rights issue was fully underwritten by Barclays, RBC Capital Markets, Deutsche Bank, J.P. Morgan Cazenove, Banca IMI, Banco Santander, HSBC and Mitsubishi UFJ Securities.
PW