London Stock Exchange profits more than double to £75m

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The london Stock Exchange yesterday attempted to dampen speculation that it is about to complete a major merger, emphasising the difficulty of cutting through the necessary red tape.

The comment came as the LSE unveiled upbeat results in its first year as a public company. Despite tough market conditions, pre-tax profits more than doubled to £75m in the year to 31 March, as turnover rose 11 per cent to £216m. As the market had been expecting the strong results, the shares rose 1p to 465p.

Clara Furse, LSE's chief executive, reiterated that she was talking to "several exchanges" about possible joint projects that include full-scale mergers.

But Don Cruickshank, the chairman, spelt out the difficulty of buying other exchanges due to the regulatory and political problems that would be thrown up. "We can make money out of joint ventures. We don't need to get into nationalistic battles that are not winnable," he said.

Speculation has been growing that the LSE will tie up with Nasdaq, the American exchange focused on technology stocks. LSE failed to merge with Deutsche Börse last year because its own members blocked the deal. It also fended off a hostile offer from Sweden's stock exchange. Mr Cruickshank signalled a merger with Nasdaq was not around the corner, saying: "The US is paradoxically just as difficult as countries where you might expect protectionism."

On the joint venture front, the LSE said it had agreed a deal with the Hong Kong Exchange that will make it much simpler for companies listed on one exchange to be listed on the other as well. It has already signed a deal with South Africa's stock exchange to supply its settlement system, SETS.

The LSE is also to consult the market on its plan to make it easier for companies to trade stocks on both the London and Hong Kong exchanges. This would open up access to capital for Far Eastern companies and providing a way into the fast deprivatising Chinese market for Western financial institutions.

Mr Cruickshank acknowledged that the LSE, which is 200 years old this year, has become much more focused since it floated. "When it was a mutual it was thought of as a national institution and the Exchange may have been confused about its purpose. Now it wants to be thought of as a commercial organisation."

While it achieved growth in most areas, the LSE saw turnover from initial public offerings fall by 16 per cent to £26.9m. It predicted "modest" revenue growth in the second half of the year, but did not expect an upturn in current levels of activity in the market.

This year has seen the deregulation of the LSE's news service to the stock exchange. The RNS service has had to compete with other services and it said it hoped this would break even next year. It is also considering ways to market RNS abroad.