Up to 40% of the London Stock Exchange’s profits are set to come from the United States once it completes its $2.7 billion (£1.7 billion) takeover of Frank Russell in a matter of weeks, chief executive Xavier Rolet said today.
Revealing a 24% jump in operating profits to £286 million in the half year to September, Rolet said: “We now have a very, very strong leg in America which will account for a third of our revenues and make us a truly global player in the financial infrastructure market.”
He said LSE had bought Russell “primarily for its index business” but would not say whether, as most people expect, it would sell the asset management side of the business once the deal is completed.
“We are well into our review of the business,” he said. “We will announce our plans early in the new year.”
After a brief halt to share flotations in October after the Scottish referendum, Rolet said the pipeline for the rest of the year and into 2015 was strong.
He added: “When the markets turn volatile we see a pick-up in our clearing, derivatives and futures income.”
Despite the increasing diversification of the LSE, Rolet said it has no plans to change its name. “We will continue to be the market for growth companies in the UK and we will always pay our taxes in Britain.” The dividend goes up 4.3% to 9.7p a share.
LSE shares rose 23p to 2048p. Broker BESI says the group is worth 2303p a share and describes the Russell deal as “ever more attractive” as more and more investors choose passive investment strategies which use the kind of indices produced by Russell and FTSE.
