Stock Exchange hands out £162m

SHAREHOLDERS in the London Stock Exchange are to receive a £162m windfall in the shape of a 55p per share special dividend to reflect its strong cashflow and the sale of its landmark tower headquarters for £67m last month.

But the good news was tempered by continental rival Euronext announcing it will soon launch a London share dealing system for trading in the most liquid FTSE 100 stocks. It said it could offer a cheaper and simpler system than the LSE.

But the Stock Exchange responded that its rival's move was simply a response to its own incursion on one of Euronext's main markets, Amsterdam.

Clara Furse, LSE chief executive, roundly denied the special cash payout meant she had run out of ideas to grow the business.

She said: 'We are looking at a number of opportunities and have a working group looking at growth opportunities. Even after the special dividend, with cash and credit facilities we could easily afford something up to £500m.'

Headline profits rose 2% to £83.2m in the year to end-March on the back of turnover up 6% at £250m. The normal dividend goes up 12% to 4.8p.

A recovery in the new issues market and the introduction of a number of new services, including the EDX derivatives market, helped to counter the continuing fall in demand for LSE terminals. The number of these used by professional traders fell 9% to 80,000.