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LSE boss Xavier Rolet steps down as it reports third quarter revenue and profit growth

Published: 08:38 19 Oct 2017 BST

LSE
The LSE is increasing its stake in LCH

The London Stock Exchange Group PLC (LON:LSE) announced the departure of its chief executive as the  company reported third quarter profit and revenue growth.

Xavier Rolet will step down as chief executive in December 2018 after nine years in the role.

READ: London Stock Exchange shares up as it reveals there is life after death of Deutsche Borse deal

Under Rolet’s leadership, LSE’s market capitalisation has risen from £800mln to almost £14bn today, the LSE said in a statement.

"I look forward to getting on with the business of ensuring an orderly transition as we continue to deliver on our strategy and financial targets,” Rolet said. The LSE has kicked off the process to find a successor.

Shares fell 1.07% to 3,878p in morning trade in response to the announcement.  

The 57-year-old Frenchman joined the LSE from Lehman Brothers in May 2009, replacing Clara Furse as chief executive. During his tenure, he helped lead the group’s acquisition of the FTSE Group and clearing house LCH.CLearnet.

However, his attempts to buy the Toronto stock exchange in 2011 failed due to rival bid from Canadian banks and competition regulators blocked his bid to merge with Deutsche Boerse.

Third quarter boosted by LCH and FTSE Russell

The news of his departure was released alongside the company’s results for the three months ended September 30, which showed a 13% increase in revenue to £442.7mln at constant currencies from the year-ago period.

Total income increased 12% to £486.1mln at constant currencies and gross profit edged up 11% to £420.4mln.

Growth was driven by a strong performance of its clearing house, LCH Group, and FTSE Russell business.  

LSE said it would increase its stake in LCH to 64.4% after taking control of the business in 2013 with a 57.8% holding.  

The deal is subject to regulatory approval, which is expected before the end of this year.

Citi's bond data and indexes business contributes to growth

In May, the group also said it would snap up Citigroup’s Yield Book fixed-income analytics services and its related indexing business for US$685mln in cash. It marked the LSE’s first major deal since its merger with Deutsche Boerse fell through in March.

“The completion of the acquisition of Citi Fixed Income Indices and The Yield Book is already contributing to the further growth in FTSE Russell while LCH continues to perform strongly and has launched innovative new services,” Rolet said.

He added: "The group's excellent financial performance is reflective of our continued innovation and execution of our growth strategy, enabling us to deliver against our three year financial targets. “

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