LSE.L Share News (LSE)

LONDON (Alliance News) - London Stock Exchange Group PLC Chairman Donald Brydon said Tuesday that a review surrounding the messy departure of former Chief Executive Officer Xavier Rolet concluded that the company did not act "improperly".

The stock market operator called for former UK Chairman of KPMG Simon Collins to undertake the review following Rolet leaving the firm early in November 2017 after initially saying that he intended to leave in December 2018.

Rolet's decision to jump ship earlier than initially stated was a result of "unwelcome publicity" surrounding his decision to resign. In October 2017, activist hedge fund Children's Investment Fund - led by Christopher Hohn - had accused the LSE of dismissing Rolet without cause.

The company in April this year appointed Goldman Sachs Inc executive David Schwimmer as its new chief executive officer from the start of August. Interim CEO David Warren will remain on as chief financial officer of the FTSE 100-listed firm, the role he held prior to temporarily stepping into the CEO position.

"Mr Collins looked at the issues surrounding Mr Rolet's departure and has helped the board understand ways in which we could have done better," Brydon explained. "It is important to note that, in all of the circumstances, he considers that, even with hindsight the board did not act improperly and alternative approaches to Mr Rolet's succession would still have caused disruption for the group."

The report also suggested LSE should discuss succession planning with its CEO periodically. Also, that any "behavioural issues" are appreciated and understood across the company helped by a "clear picture" of the behaviour it desires.

The Collins Report also suggested performance should be assessed through a "balanced scorecard approach" which includes measures other than financial ones. These should be considered by the remuneration committee in making its decision.

"It is inappropriate to go into the detail of all that happened," Brydon emphasised. "With a new Chief Executive now announced and continuing good opportunities ahead for the group, the board is focused on the future."

Earlier on Tuesday, LSE reported its first-quarter total income rose 13% after a "strong" performance from all its key businesses as it awaits the arrival of its new boss in August.

For the three months ended March, total income rose 13% to GBP520 million from GBP461 million the year prior. This was helped by strong performances in the Information Services, LCH post-trade services, and Capital Markets businesses.

Information Services saw revenue grow 16% on a reported basis and 11% on an organic basis to GBP201 million from GBP174 million the year prior, driven by double-digit growth at FTSE Russell. LCH grew revenue rose 12% reported and 13% organic to GBP118 million from GBP106 million the year before. Capital Markets saw reported revenue lift 14% and organic revenue 13% to GBP107 million from GBP94 million.

Its smaller Titoli and Technology Services units, however, saw weaker performances. Titoli revenue remained flat at GBP28 million. In contrast, Technology Services revenue fell 37% on a reported and 5% on an organic basis to GBP13 million from GBP20 million, with the reported result reflecting the disposal of its MillenniumIT ESP and Exactpro businesses.

LSE emphasised its financial position remained strong. In late March, credit analyst S&P Global ratings shifted its A- credit rating on LSE to a Positive from a Stable outlook.

"The group has delivered a strong first quarter performance," LSE Interim Chief Executive Officer David Warren said. "All of our key businesses continue to perform well, with strong growth in FTSE Russell, LCH and Capital Markets. During the period, we further increased our stake in LCH and acquired full ownership of the FTSE TMX Global Debt Capital Markets business."

During the period, LSE increased its stake in LCH by two percentage points to 68% after a minority shareholder sold its stake.

"We continue to invest in new product initiatives while maintaining a focus on improving efficiencies as we work to deliver on our financial targets," Warren added. "The group is strategically well placed to further develop its many growth opportunities, working in partnership with our customers."

Shares in LSE were 0.5% higher at 4,234.00 pence on Tuesday.