Speculation is continuing about the LSE's future

The 300-year-old LSE is Europe's largest share market.

The announcement comes against the backdrop of US high-tech exchange Nasdaq raising its holding in the LSE to 25.1% last week.

The LSE, which has rejected a takeover approach from Nasdaq, said it had been an "outstanding" year.

However in morning trade in London, shares in LSE fell by 9% to 1080 pence.

We're not interested in doing a deal for the sake of doing a deal Clara Furse, LSE chief executive

The LSE says it expects a strong performance in the current year.

Operating profit for the period - the year to March 2006 - leapt 42% to �120.1m.

Clara Furse, chief executive of the LSE, said: "The Exchange has delivered an outstanding result for 2006, increasing value for shareholders and customers."

Takeover speculation

Nasdaq has been steadily boosting the size of its stake in the LSE, sparking speculation that it is about to launch a new takeover bid, or that the two parties would come to a deal.

But Ms Furse, said: "Clearly we don't need to do a deal and we're not interested in doing a deal for the sake of doing a deal. We're interested in doing a deal if it adds to our growth story."

In March, Nasdaq withdrew a proposed �2.43bn ($4.2bn) bid after the exchange rejected its approach.

Meanwhile, Euronext - which runs markets in several European countries - is mulling offers from the New York Stock Exchange and Deutsche Boerse, itself a spurned suitor for the LSE.

Announcing its figures, the LSE said it will be meeting shareholders, including the Nasdaq, as usual following the release of results.