Bourses operator London Stock Exchange (LSE) finished 2011 with a flourish, with only the Capital Markets division failing to increase revenues from the year before.

In the final three months of 2011 (the third quarter of the group's fiscal year), total income was up 17% year-on-year (YOY) at £196.3m, though some of this growth was due to favourable exchange rate movements; on an organic constant currency basis income was up 13%.

For the first nine months of the LSE's financial year, income was up 19% (18% on a constant currency basis) at £582.8m.

Post Trade Services total income in the third quarter increased 50% YOY, driven by further sequential growth (from the second quarter) in treasury management income from clearing operations.

Capital Markets revenues decreased 4% YOY with growth in annual fee income, derivatives revenues and Italian cash equities trading offset by lower flotations activity and weaker fixed income and UK cash equities trading

On the Information Services side, revenues rose 24% from a year earlier in total, reflecting operational growth and the initial benefits of the FTSE acquisition, which includes adjustment to royalties previously recognised three months in arrears. The LSE now wholly owns FTSE, having bought out FT owner Pearson's stake last year.

Even stripping out the FTSE-stake acquisition effect, Information Services' organic growth was solid at 4%, with increases in both real time data income and revenue from other information products.

The LSE said earnings before interest, tax, depreciation and amortisation (EBITDA) of the now wholly-owned FTSE business rose 34% from the year before to £53.6m.

Technology Services revenues were up 15% YOY, mostly driven by growth from MillenniumIT.

At the end of 2011, group net debt had increased to £582m, which is not surprising given the £428m price tag on the half-share of the FTSE business. Net debt is now 1.6 times adjusted EBITDA but the group expects gearing to reduce as it generates cash.

The board expects continuing good overall group performance during the final quarter of the financial year, but cautioned that secondary market trading in 2012 has so far been subdued, with average daily valued traded in UK cash equities down 3% on the previous quarter, although volume traded in Italian cash equities is up 4% quarter-on-quarter. The LSE owns the Milan Bourse.

"MTS fixed income trading and IDEM derivative volumes are down on average daily levels in the prior quarter. Information Services, Technology Services and Post Trade Services are all performing well, with net treasury income unaffected by slowing trading levels so far in January," the company said.

"Our diversification strategy continues to pay dividends and the breadth and balance of our offering gives our portfolio a good element of natural hedge, making us well-placed to drive the ongoing performance of the group," claimed Xavier Rolet, the LSE's Chief Executive.

"We remain firmly committed to enhancing the group's competitiveness, focusing on our customers and to developing our wide range of products and services," Rolet added.

Shares in the LSE edged 1.5p lower in morning trading to 880p, in line with the trend of the general market.


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