London Stock Exchange Final Results

Announcing preliminary results for the year ended 31 March 1999, the London Stock Exchange reported another strong year. It was a year of record trading values on the Exchange's markets - with trading in UK shares increasing by more than 15 per cent to over £1,155 billion and international shares increasing by over 50 per cent on the previous financial year to £2,396 billion. Thorough preparations were made in readiness for the euro and since January 4 turnover in euro has accounted for a significant proportion of total trading on the Exchange. Among the key developments in the year was the formation in July 1998 of a European Alliance, paving the way for the development over time of a pan-European trading platform for leading stocks. Income for the year at £149.8 million was 4.5 per cent ahead of last year (1997/98: £143.3 million) reflecting the continued high level of trading volumes and sales of Exchange data around the world. Running costs for the year of £105.3 million showed an increase on the previous year's £96.7 million, reflecting continuing investment in regulatory systems and reinforced marketing efforts. There was also expenditure on the development of the European Alliance. The Exchange's preparations for Year 2000 are progressing according to plan - the costs of £17.6 million for this and for EMU include a significant commitment to market testing for securities firms. After tax of £9.7 million, £19.4 million is being transferred to reserves. The Exchange said: "This was an important year for the Exchange's markets, with business at record levels, with euro trading off to a successful start, and with progress towards the development of a pan-European equity market. The combination of buoyant market conditions and continuing management of our costs has enabled us to maintain the strength of our financial position while investing substantial sums for the future." Given its current financial position, the Exchange is proposing to bring forward the redemption of the 'A' shares created as a result of the reorganisation of the Exchange in 1986. If approved by shareholders, the early redemption of the 'A' shares will give rise to a one-off payment of £35 million during the current financial year - representing £10,000 for each individual shareholder. The Exchange commented: 'We are pleased to be able to bring forward the redemption of the outstanding A shares which were created as a result of the reorganisation of the Exchange in 1986. Our financial performance over the last three years has allowed us to take this step, whilst maintaining our ability to make the significant investments which will be needed at this time of change."