Market operator waives off an unstable few months for IPOs as revenue increase.
The London Stock Exchange anticipates more companies to revive their plans to remain afloat in the coming weeks after a strong 6-months for the market operator had delivered a 15pc increase in revenue.
The chief executive of LSE said that the combination of the Scottish referendum and the unstable market a few weeks back further added to the uncertainty of the number of issuers in making valuations which resulted in the postponement of the deals.
The ‘Virgin Money’ is back and the pipeline continues to remain as a very strong indication. As between now and then this year and early next year there is a strong possibility that there will be larger cap firms coming to the market.
The junior market is aiming to launch several IPOs a week during the year, which was regarded as part of the tech revolution that has been happening in the United Kingdom for sometime as high-growth star-up access the market.
Companies that have recently withdrawn their float plans during the market turbulence included the challenger bank Aldermoure, which postponed its IPO last October and Edinburgh-based house builder Miller Group along with BCA, the company behind ‘We Buy any Car’.
A good number of firms that took part in the wave of stock market that first appeared earlier in the year have been left trading below their IPO price which included AO World, Pets at Home and Saga.
The LSE said that the capital markets revenue rose 13pc to £ 164.6 million in the six months to the end of September, with increasing activity on the primary markets where the number of new issues increased from 79 to 126 over the half-year as well as the secondary markets.
Companies were able to raise £27.5 billion on the LSE’s markets in London and Italy in the period up 8pc on the same time as it was last year.
The firms’ total revenues increased 15pc to £592.6 million, while operating profits likewise rose 10pc to £172.3 million.
The £1.6 billion which was expected to be completed by the end of the year brought with it the largest benchmark provider in the U.S. and an investment management business which the LSE is presently reviewing. Moreover, there are confirmed reports that the indices business will be integrated with the FTSE.
An estimated one third of the LSE’s revenues will come from the U.S. once the takeover is complete. The firms has its insight on more bond trading and building on its position in interest rate exchange.
The clearing house that the LSE bought a couple of years back in 2012, posted a 30pc increase in revenues at a constant currency to £165.7 million. Future revenues will be taking a big hit from the end of the commodities clearing contract with the London Metals exchange in September although hefty tariffs on fixed income trading are expected to mitigate the hit.
The LSE was able to passed its transition from being a possible casualty of the consolidation to being a consolidator in its own right. Management is taking essential steps to help diversify the business and thus limit the risk.
The company is planning to pay an interim dividend of 9.7p per share, a rise of 4.3 pc last year when changes pertaining to the right issued earlier this year was used to help fund the deal.