London Stock Exchange returns to profit as boss vows not to match rivals' prices

The LSE has been losing market share to Chi-X and Bats, low-cost alternative platforms known as multilateral trading facilities, since pan-European regulation opened the market to competition in 2007.

But Xavier Rolet, the French boss of the LSE, reporting a pre-tax profit of 144.3m for the year to end-March, said: "We have no intention of matching the prices of the cheapest competitors who are all operating at a loss. We believe their fee structure is unsustainable."

The LSE's profit is a marked recovery on the 250.8m losses a year earlier when its takeover of Italian exchange in 2007 landed it with hefty writedowns.

Yesterday's figures also marked the first full set of results for Rolet, the former French head of failed investment bank Lehman Brothers, who took over the reins a year ago. The LSE's revenues fell to 628.3m from 671.4m in the period.

The exchange benefited from a flurry of firms seeking to raise capital on the markets, with the second highest annual amount ever recorded – 77 billion.

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.

Doug Webb, chief financial officer, said it was noticeable that companies were now using rights issues for acquisitions and investment rather than to repair balance sheets.

The Prudential has launched a near-14bn rights issue to help finance its takeover of AIG Asia, while the National Grid announced a 3.2bn cash call on shareholders on Thursday to replace its ageing network and infrastructure.

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.

Revenues in the LSE's information and technology arm rose 4 per cent, with 93,000 terminals using its data – down 11,000 on a year ago.

The dividend is held at 24.4p.