Stock exchange's return to profit

The LSE reported profits of 144.3m for the year to March 31 in a marked recovery on the 250.8m losses a year earlier when its takeover of Italian exchange Borsa Italiana in 2007 landed it with hefty writedowns.

Yesterday's figures also mark the first full set of results for chief executive Xavier Rolet, the former French head of failed investment bank Lehman Brothers who took over the reins a year ago.

But despite a return to the black, the LSE continued to come under pressure from competition as revenues fell from 671.4m to 628.3m.

The LSE has slashed staff numbers by 13 per cent over the past year to counter turbulent trading conditions and said another 50 roles were being axed. The group received some support from a flurry of firms seeking to raise capital on the markets, with the group saying it saw the second highest annual amount ever recorded – 77bn.

It also said there had been a marked improvement in new market issues in recent months, with 72 in the second half of the year against 38 in the first.

But stock market turmoil seen since the start of the year has highlighted how fragile the equity bounce-back has been.

Chris Gibson-Smith, chairman of the LSE, said: "The market, economic and regulatory environment in which our business operates is going through a period of significant change.

"We continue to take steps to ensure the business remains central to capital markets, competing for business as an efficient, low cost and client focused organisation."

The LSE is hoping to drive growth over the year ahead through recent acquisitions, including the takeover of its former rival Turquoise, set up in 2006 by a consortium of nine investment banks.

It bought a 60 per cent stake in the group earlier this year to gain a bigger trading presence across Europe and help forge better relationships with the major investment banks.