Yesterday investors cheered the news that full-year revenues were up seven per cent to £726.4m, while net debt had fallen from £703m a year ago to £549.9m over the last 12 months – sending shares up almost six per cent and adding to the 23 per cent rise they’ve already seen since the start of the year.
In a sector rife with consolidation, LSE has remained on the sidelines since its failed merger with the Toronto Metals Exchange (TMX) at the start of 2011. Instead, Rolet has focused on seeking out assets that diversify income streams away from traditional equity markets – a majority stake in LCH.Clearnet, a fixed-income joint venture with TMX, and a very successful clearing business in Italy, CC&G.
With competition concerns high among regulators, he’s right to think small and branch out further afield, focusing on key overseas markets and the growing over-the counter market. At the moment it’s early days, but when the synergies really start rolling in, investors should have even more reasons to be cheerful.