The London Stock Exchange has taken a hit from its MillenniumIT acquisition, but long-term benefits are becoming clearer.
The stock exchange reported a profit of £280m for the full year ended 31 March. This compared to £340m in the previous 12 months.
The MillenniumIT acquisition, which has provided the technology to replace the London Stock Exchange's ageing Tradelect core trading platform, cost a total of £25m.
But MillenniumIT will provide more savings, competitiveness and even earnings if the stock exchange's plans pay off.
Speaking at the announcement of the annual financial results, London Stock Exchange CEO Xavier Rolet said, "We are in the process of determining where else MillenniumIT technology can be used across the group." As well as core trading platforms and other capital markets software, MillenniumIT also develops surveillance and clearing systems."
One example of the cost and competitive advantages that the MillenniumIT platform will bring is to the Turquoise multi-trading facility, which the London Exchange acquired this year.
According to former London Stock Exchange CIO David Lester, the fact that Turquoise and the London Stock Exchange will run on the same platform means that customers can migrate between the two for next to nothing.
"Turquoise is using the same API and connectivity as the London Stock Exchange, so over 250 customers of the main exchange can use Turquoise for no extra cost," he said.
Turquoise, which offers dark pool functionality - where big customers can trade without being public - as well as traditional trading, currently has 50 customers.
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