The key points are:
- Net transaction fees up 14.6% on stronger trading volumes
- Turnover increased to £88.6 million (1999: £84.6 million)
- Operating expenditure reduced by £18.9 million
- Profit before tax and after exceptional items £12.2 million (1999: loss of £(22.1) million). Earnings before interest, tax, depreciation and amortisation (EBITDA) £17.5 million (1999: loss of £(5.8) million)
- Earnings per share 83 pence (1999: loss of (132) pence)
- 2000: LIFFE became a fully electronic market for the first time in its existence
- 2000: LIFFE CONNECT™ accessed from more overseas dealing rooms than in the UK
- System now used by an estimated 15,000 traders in 23 countries
My Statement last year forecast the creation of a technology business to exploit the opportunities created by LIFFE's technological and exchange expertise - and referred to the search for prospective partners to enable LIFFE to achieve its vision. I am pleased to say that substantial progress was made on both these fronts through initiating the creation of a market solutions technology business and the securing of global technology and investment partners.
In 2001, the successful commercialisation of LIFFE's technology based on LIFFE's exchange expertise, is key to LIFFE building long-term value for shareholders. Hugh Freedberg, Chief Executive of LIFFE, said: "The return to profit, after two years of losses, meets a commitment made to shareholders in the 1999 Report and Accounts. Stronger trading volumes, particularly in equity products, compared with 1999 resulted in a 14.6% increase in net transaction fees to £67.0 million. Other income fell by £4.5 million, the result primarily of the loss of floor-based revenues, which included permit fees and rental income from trading floor facilities. As a consequence, turnover increased by 4.7% to £88.6 million.
Operating expenditure, excluding exceptional items, fell by £18.9 million from £104.7 million to £85.8 million, reflecting savings resulting, in part, from the introduction of LIFFE CONNECT™ for all products. This led to a further reduction in total headcount and reduced premises and technical service costs.
After an exceptional net credit of £4.0 million, (compared with an exceptional charge in 1999 of £8.1 million), pre-tax profit was £12.2 million compared with a loss in 1999 of £(22.1) million. Earnings per share were 83 pence.
This year will be one of further and significant investment in LIFFE CONNECT™ and LIFFE's other technology, in order to build a globally competitive business and to transform it into one of the leading market solutions providers.
For 2001, LIFFE will forge ahead with the development of its core Exchange and technology businesses. As a result of the investment and development in LIFFE's technology, we are increasing our focus on improving the level of service we offer to customers. We are committed to providing a service that meets the very high standards of reliability that we have set ourselves, and that our customers need and expect. An extensive and accelerated programme of systems improvements is designed to address this issue and we are planning further significant systems development throughout the year. For our Exchange business, we are pressing ahead with new and innovative product initiatives, which will include extending our existing line of Universal Stock Futures and developing our interest rate and non-financial product ranges. In short, the reinvention of LIFFE will continue throughout 2001 and beyond."
