The London Stock Exchange Group, which wants to buy clearing house LCH.Clearnet, said today that first-half profits soared 86% on cost-cutting, diversification and its strong post-trade business.
Earnings after taxation surged to £116.1m in the six months to September, compared with £62.2m during the same time of 2010, LSE Group said. However, market expectations had been for a lower net profit of £121.4m.
Total income swelled by 20% to £386.5m, added the group which also runs Italy's Borsa Italiana. Pre-tax profits jumped almost 80% to £179.7m.
Chief executive Xavier Rolet said the LSE's diversification strategy is working well, with the recent launch of new derivatives, gilts and index businesses.
The LSE was also boosted by its particularly strong post-trade services division. "Our diversification strategy is delivering," Rolet said.
"Today I am pleased to be reporting a strong first half performance across the Group with a 20% rise in total income and a 79% increase in profit before tax," he added.
He said the LSE "remain actively engaged in exclusive discussions with LCH.Clearnet about a potential transaction".
The LSE had revealed in September that it was in exclusive talks with LCH.Clearnet over a possible takeover deal. A successful takeover would mark a major victory for the LSE's French chief executive, who earlier this year failed to merge the London Stock Exchange with the Toronto Stock Exchange.
Clearing houses play a key role in the transaction of shares between two parties, charging clients a fee to guarantee deals should one side default.
