The London Stock Exchange reported a 19% drop in full-year earnings per share as it racked up the costs of transforming the company, while pointing to a recent upturn in trading at subsidiary Turquoise.
Like other European exchanges, LSE has been losing market share to Chi-X and BATS, low-cost alternative platforms known as multilateral trading facilities, since pan-European regulation opened the market to competition in 2007.
LSE has been fighting back by reducing fees, cutting post-trade costs and adding new businesses to diversify its sources of revenue, but the going remains tough.
'The strategy amounts to a total re-engineering of our business over a two-to-three-year period,' CEO Javier Rolet said. 'The costs to achieve this are starting to come through, but the fruits of our labour have yet to be harvested', he added.
The group, which operates bourses in London and Milan, said it had chopped costs by 8% before acquisitions and one-off items, with a 13% reduction in staff numbers.
In a development affecting exchanges, regulators in the US and Europe are looking at the 'consequences of competition in an environment where platforms do not have the same constructs and do not need to have the same level of price formation', Rolet said.
US regulators are proposing new circuit breakers on Wall Streets after the Dow Jones industrial average on May 6 plunged around 700 points in 10 minutes for reasons that have still not been identified.
The LSE already has circuit breakers in its electronic order book that automatically halt trading briefly when stock prices jump more than a certain percent.
