Dame Clara steps down as LSE slumps into red.

Byline: Iain Laing

DAME Clara Furse ended her eight-year tenure at the helm of London Stock Exchange yesterday with news of the group's first annual loss in its life as a listed company.

She handed over the reins to Xavier Rolet, the former French head of failed investment bank Lehman Brothers, as the LSE reported full-year results to March 31 revealing a pounds 250.8m slump into the red.

The pre-tax loss - against profits of pounds 227m the year before - comes after a pounds 484m writedown on the value of Borsa Italiana, its Italian exchange bought in 2007.

But the LSE said the hit was "technical accounting adjustment" caused by the financial crisis and added that Borsa Italiana's assessed value was "comfortably" ahead of the pounds 1.3bn paid for the exchange.

Profits with the writedown and exceptional items stripped out rose 18% to pounds 304.7m and came in slightly ahead of analyst expectations.

Dame Clara, 51, said the LSE had "responded well in increasingly difficult markets".

She leaves the LSE after seeing off repeated hostile takeover attempts for the exchange during her time in charge.

In 2007, she fought off a takeover bid from US exchange Nasdaq after a protracted battle, while other unwanted approaches from suitors such as Deutsche Borse were also defeated.

She has also overseen the public listing of the LSE and transformed the group into Europe's biggest exchange business through the takeover of Borsa Italiana.

However, the group admitted it faced "testing" times ahead and its results yesterday revealed the impact of the financial woes on listed companies.

The average value of daily trades through Sets - the LSE's electronic trading system - fell by 24% in the year, although the group said this was in line with the 22% drop in the FTSE 100 Index.

New issues plunged by 61% in total across the group as the stock market volatility put companies off initial public offerings, while the equities slump saw the market capitalisations of listed firms drop by more than a third.

But cash-strapped companies tapping investors for funds saw a boom in further capital raisings and rights issues - up 435% on the LSE. "Capital raising was particularly active in the fourth quarter as companies from across the market successfully accessed equity markets at a time when credit markets remained difficult and expensive," it said.

The group also notes signs of improvement in trading levels since March, with the daily average value traded on the UK order book last month up 2% on the previous quarter.

Dame Clara leaves Mr Rolet in charge at a time of "challenging" market and economic conditions, while it also battles against the threat from fledgling rival exchanges, such as Chi-X and Turquoise.

He has already had close ties with the LSE through his time at Lehman, which acted as the exchange's corporate broker. Mr Rolet spent eight years at Lehman, becoming chief executive of its French business in 2007..

CAPTION(S):

BIG LOSSES The LSE reported full-year results to March 31 revealing a pounds 250.8m fall into the red.