London Stock Exchange Group PLC Final Results -17-
March 05 2015 - 2:02AM
UK Regulatory
The fair values of the identifiable assets and liabilities
arising out of each acquisition at the relevant acquisition date
are as follows:
Frank Russell
Bonds.com Company Total
Book Fair Book Book Fair
value value value Fair value value value
Notes GBPm GBPm GBPm GBPm GBPm GBPm
Non-current
assets:
Intangible
assets 14 0.5 0.5 12.8 1,514.0 13.3 1,514.5
Goodwill 14 7.0 - 7.0 -
Property, plant
and equipment 13 0.1 0.1 28.8 28.8 28.9 28.9
Deferred income
taxes - - 34.6 34.6 34.6 34.6
Investments - - 21.0 21.0 21.0 21.0
Other non-current
assets 0.1 0.1 17.3 17.3 17.4 17.4
Current assets:
Cash and cash
equivalents 22 0.7 0.7 290.1 290.1 290.8 290.8
Receivables - - 183.5 183.5 183.5 183.5
Other current
assets 0.2 0.2 29.0 29.0 29.2 29.2
Current liabilities:
Payables 25 - - (56.4) (56.4) (56.4) (56.4)
Other current
liabilities (1.5) (1.5) (223.4) (223.4) (224.9) (224.9)
Non-current
liabilities:
Provision - - (15.4) (15.4) (15.4) (15.4)
Deferred tax
liabilities - - - (576.9) - (576.9)
Other non-current
liabilities - - (36.3) (36.3) (36.3) (36.3)
Net assets 0.1 0.1 292.6 1,209.9 292.7 1,210.0
Non controlling
interest - - - (7.4) - (7.4)
Goodwill - 8.7 - 476.0 - 484.7
0.1 8.8 292.6 1,678.5 292.7 1,687.3
Satisfied by:
Cash and capital
raise 8.8 1,678.5 1,687.3
Total investment 8.8 1,678.5 1,687.3
The fair values are preliminary and will be finalised within twelve
months of the acquisition date.
None of the goodwill recognised is expected to be deductible for tax
purposes.
The fair value adjustments include:
Frank Russell Company
The additional GBP1,508.0m of intangible assets arising on
consolidation represents GBP30.7m relating to various technologies,
GBP799.7m relating to customer relations and GBP677.6m relating to
trade names. Deferred tax liability on these intangible assets was
GBP576.9m. The fair values of these purchased intangible assets are
being amortised over their remaining useful life from the date of
completion.
The goodwill of GBP476.0m arising on consolidation represents
the growth of future expected income streams from Russell's
customer base and the value of expected synergies arising from the
acquisition.
Bonds.com Group
The Group is currently undertaking a full allocation exercise of
the purchased intangibles of Bonds.com, until that is complete the
excess of consideration over net assets acquired of GBP8.7m is held
as goodwill.
Acquisitions in the year to 31 March 2014
The Group made three acquisitions during the year ended 31 March
2014.
On 5 April 2013, the Group and TMX Group Limited completed a
transaction to combine their fixed income businesses into a new
business, FTSE TMX Global Debt Capital Markets Limited. The
transaction resulted in the Group acquiring a 75 per cent stake in
FTSE TMX Global Debt Capital Markets Limited for a total
consideration of GBP78.2m. The non-controlling interest ('NCI') has
an option to sell the remaining 25 per cent interest to the Group
after six years or earlier in other limited scenarios. The Group
recognised GBP27.4m in goodwill and GBP74.1m of other intangible
assets.
On 1 May 2013, the Group completed the acquisition of a further
55.5 per cent stake in LCH.Clearnet resulting in a majority stake
of 57.8 per cent in LCH.Clearnet. The total investment of GBP470.3m
includes deferred consideration of GBP20.0m, payable on 30
September 2017 subject to acceleration or delay in certain limited
circumstances. The investment is inclusive of the Group's
participation in the capital raise of LCH.Clearnet issued share
capital of GBP158.2m. The Group recognised GBP123.8m in goodwill
and GBP245.2m of other intangible assets.
On 23 September 2013, the Group acquired a 70 per cent interest
in EuroTLX SIM SpA for a consideration of GBP26.1m and GBP0.9m in
deferred consideration. The NCI has an option to sell the remaining
30 per cent interest to the Group. The value of the option is
dependent on achieving growth and cost synergies in the next
financial year. The Group recognised GBP15.6m in goodwill and
GBP10.9m of other intangible assets.
There were no material changes to the preliminary fair
values.
20. Events after the reporting period
On 5 February 2015, the Group announced the completion of the
comprehensive review focused principally on assessing the strategic
fit of Russell Investment Management with the Group's long term
strategy. After careful consideration, the conclusion of the
comprehensive review is to explore a sale of this business in its
entirety. The Group has already received a number of expressions of
interest in a potential acquisition of Russell Investment
Management reflecting the high quality of its business and market
leading positions. A sale process of the business has now
commenced.
On 4 March 2015, the Board approved the allotment and issue of
225,476 ordinary shares of 6(79/86p) each in the Company to satisfy
options granted under the Company's Save-As-You-Earn and
International Sharesave Plans.
5 March 2015
LONDON STOCK EXCHANGE GROUP plc (LSEG)
NON-STATUTORY FINANCIAL STATEMENTS FOR 12 MONTHS TO
31 DECEMBER 2014 FOLLOWING CHANGE TO ACCOUNTING REFERENCE
DATE
The following section contains non-statutory financial
statements for the 12 month periods to December 2014 and 2013. It
has been prepared to provide comparative information for future
financial results on a December year end basis. The non-statutory
figures include the results of acquired subsidiaries during the
period from their respective dates of acquisition and do not
pro-rate any financial results had any of the transactions taken
place at the start of the period.
CONSOLIDATED Income Statement
12 months 12 months
to to
31 December 31 December
2014 2013
(Unaudited) (Unaudited)
Restated*
Notes GBPm GBPm
Revenue 1,283.2 974.0
Net treasury income through CCP business 92.6 107.3
Other income 4.8 12.2
Total income 2 1,380.6 1,093.5
Expenses
Operating expenses before amortisation
of purchased intangible assets and
non-recurring items 3 (823.2) (616.5)
Share of profit after tax of associates 0.1 -
Operating profit before amortisation
of purchased intangible assets and
non-recurring items 557.5 477.0
Amortisation of purchased intangible
assets 4 (122.0) (108.9)
Non-recurring items 4 (67.5) (38.7)
Impairment of purchased intangible
assets and goodwill 4 (22.0) -
Operating profit 346.0 329.4
Finance income 3.9 9.0
Finance expense (72.0) (76.2)
Net finance expense (68.1) (67.2)
Profit before taxation 277.9 262.2
Taxation on profit before amortisation
of purchased intangible assets and
non-recurring items (124.5) (109.1)
Taxation on amortisation of purchased
intangible assets and non-recurring
items 4 48.2 39.6
Total taxation (76.3) (69.5)
Profit for the financial period 201.6 192.7
Profit attributable to non-controlling
interests 22.3 4.6
Profit attributable to equity holders 179.3 188.1
201.6 192.7
Basic earnings per share 5 56.5p 64.2p
Adjusted basic earnings per share 5 103.3p 96.5p
*The restatement for the 12 months ended 31 December 2013 is
detailed in Note 1.
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