The LSE is talking to rival exchange Euronext

It said pre-tax profit for the year ending 31 March rose to �89.1m ($163.4 m), up from �88.8m the previous year.

Since the collapse of the German bid, the LSE has been talking to rival exchange Euronext about a potential takeover.

Chief executive Clara Furse said there was "encouragement for the year ahead".

Fees cut

She said the performance "reflects improvement in each of our core business areas".

There had been an uplift in new issue activity, continued strong electronic trading volumes and an increase in the number of professional terminals taking exchange data, she added.

Operating profit, before exceptional items, was down 1% at �82m, and, including exceptional items, was down 10% at �73.2m.

The LSE said the listings business - both on its main and junior markets - remained buoyant.

However, there was a 9% fall in turnover at this division, which was hit by a cut in the fees it can charge following a watchdog investigation.

Takeover troubles

In March, Deutsche Boerse ditched its �1.3bn proposal to buy the LSE.

The German company said at the time that it had failed to convince the LSE to recommend the offer to shareholders, and also acknowledged widespread opposition among its own shareholders.

The outlook statement was very bullish, although perhaps not too surprising given management are negotiating a potential sale of the business Justin Bates, Numis Securities Check the LSE share price

Rival exchange Euronext has since been in takeover discussions with the LSE.

The UK's Competition Commission is reviewing the situation regarding potential bids for LSE, and will publish its conclusions in September.

Despite these potential distractions, LSE chairman Chris Gibson-Smith said: "We nevertheless remain focused on the operational performance of our business and are confident the exchange is well placed for the future."

This upbeat statement was to be expected, Numis Securities' analyst Justin Bates said.

"Uncharacteristically, and surprisingly given current market conditions, the outlook statement was very bullish, although perhaps not too surprising given management are negotiating a potential sale of the business," Mr Bates said.