Full-Year Results

TRANSFORMED FOR GROWTH

NEX Group plc ("NEX") (NXG.L), a financial technology company at the centre of the global markets, announces today its audited results for the year ended 31 March 2017.

1 Trading EPS (basic) and the full-year dividend per share have been restated for the year ended 31 March 2016 to incorporate the effect of the share consolidation.

Highlights:

· ICAP Global Broking division: sold for £1.3 billion

· Revenue from continuing operations increased by 18% to £543 million (2015/16: £460 million), an increase of 8% on a constant currency basis

· Trading operating profit from continuing operations increased by 4% to £145 million (2015/16: £139 million), an increase of 12% excluding the impact from hedging

· Trading EPS (basic) from continuing operation is marginally down at 23.2p per share (2015/16: 23.6p per share)

· Trading EPS (basic) including discontinued operations is marginally down at 42.9p per share. On a like-for-like basis trading EPS (basic) increased by 22%

· Final dividend payment unchanged at 27.0p per share, full-year dividend unchanged at 38.5 pence per share

· Annual cost savings identified of approximately £25 million by 2019/20 will be offset by incremental investment for growth

Michael Spencer, Group Chief Executive Officer, said: "The sale of ICAP Global Broking for £1.3 billion to TP ICAP PLC delivered exceptional value to NEX shareholders. NEX is a well-established financial technology company which, thanks to our continued investment in the development of financial technology and our focus on putting our clients' needs at the heart of our business, has an unprecedented opportunity to become the world's leading multi-product, global electronic transaction network for OTC products and post trade services.

"Our performance remains strong in a tough market environment. NEX Markets has focused on expanding its product suite to a wider client base and continues to win market share in US Treasury actives, EU Repo and Asian NDF's. NEX Optimisation continues to innovate, delivering market leading services across the transaction lifecycle that help clients solve their financial, regulatory and operational challenges. Through NEX Opportunities, our financial technology investment business, we acquired ENSO, which provides alpha-generating analytics to many of the world's most successful fund managers, and Abide Financial, which provides regulatory reporting services that are becoming increasingly required by financial institutions as we head towards MiFID II.

"Our priorities for 2017/18 are clear and we are excited about the future. Through a combination of continued investment in new products, and the implementation of our transformation programme, which will focus on creating efficiencies, NEX is well positioned to deliver growth, increase divisional operating margins to at least 40% and deliver value for our clients and shareholders."

Presentation of information

This document comprises the full-year results for the year ended 31 March 2017 for NEX Group plc (NEX) and its subsidiary undertakings (together 'NEX' or 'the Group'). The financial information set out in this document for the years ended 31 March 2017 and 2016 does not constitute statutory accounts as defined in section 435 (1) and (2) of the Companies Act 2006, but is derived from those accounts. Statutory accounts for 2016 have been delivered to the Registrar of Companies and those for 2017 will be delivered following the Group's Annual General Meeting. The auditors' reports on both the 2017 and 2016 accounts were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of Companies Act 2006.

On 15 December 2016, NEX Group plc obtained control of the entire share capital of ICAP plc via the Scheme of Arrangement. There were no changes in the rights or the proportion of control exercised and therefore the financial statements reflect the continuation of the pre-existing group headed by ICAP plc. See the basis of preparation note to the financial statements.

Unless specifically stated all references are to continuing operations.

Cautionary statement regarding forward-looking statements

This full-year report contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Group.

Certain statements that are not historical facts, including statements about the Group's beliefs and expectations, are forward-looking statements. Words such as 'expects', 'anticipates', 'intends', 'plans', 'believes', 'seeks', 'estimates', 'potential' and 'reasonably possible', variations of these words and similar expressions are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and therefore undue reliance should not be placed on them. Forward-looking statements speak only as of the date they are made, and it should not be assumed that they have been revised or updated in the light of new information or subsequent events.

Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement.

Analysts and investors briefing

There will be a briefing for analysts and investors at 09:30am (BST) on Monday 15 May 2017 at NEX Group plc, 2 Broadgate, London EC2M 7UR. A webcast of the presentation made to analysts will be available at www.nex.com later that day.

NEX Group plc offers client better ways to execute trades and manage risk. Our products and services underpin the entire trade lifecycle pre-, during and post-execution. Our electronic trading platforms are industry standards. Clients use our lifecycle management and information services to optimise portfolios, control risk and reduce costs. We partner with emerging technology companies to bring greater efficiency, transparency and scale to the world's capital markets. NEX is headquartered in London with offices around the world. For more information, go to www.nex.com

Financial performance

For the year ended 31 March 2017, the Group reported revenue of £543 million, an increase of 18% on the prior year on a reported basis and an increase of 8% on a constant currency basis. On a constant currency basis, revenue from NEX Markets was up 8% and from NEX Optimisation up 9%.

During the course of the year, the Group's trading performance benefited from increases in market share and volatility across European repo, BrokerTec UST Actives and Asian NDFs. triResolve continued to show growth underpinned by an increase in client numbers and the launch of triResolve margin.

This was partly offset by low foreign exchange (FX) volatility impacting trading activity on the EBS platform and low euro interest rate volatility impacting Reset, the risk mitigation product.

NEX continues to make focused investments to drive product innovation in response to evolving market needs. Major areas of focus include products that provide clients with solutions to regulatory requirements and ones that are targeted at expanding NEX's client base. In addition, NEX Opportunities has continued to invest in new start-ups leveraging next generation technologies. During the year NEX acquired ENSO and Abide Financial in which it already had minority stakes.

The Group reported a trading operating profit of £145 million, an increase of 4% on the prior year. Although the Group's trading operating profit margin reduced to 27% (2015/16: 30%) underlying profitability was higher after adjusting for FX hedging losses of £17 million (2015/16: loss of £6 million) and one off costs of £5 million relating to the consolidation of offices in the US. Moreover, the newly acquired ENSO and Abide Financial businesses added operating losses of £5m and should reach run-rate break even in the next 18 months.

The Group's continuing operations reported a trading profit before tax (PBT) of £114 million (2015/16: £110 million), 4% up on the prior year. Continuing trading EPS (basic) of 23.2p per share (2015/16: 23.6p per share) was down from the prior year as a four percentage point increase in the trading effective tax rate (ETR) offset the 4% improvement on the trading PBT.

A defining transaction

For more than 15 years the Group's strategy has been based on continually investing in the development of financial technology for the trading community. During the course of last year the Group took its most significant step to date with the founding of NEX. The sale of the voice broking business to TP ICAP, which closed on 30 December 2016, enabled NEX to become a focused financial technology business.

The financial marketplace is in flux. The ever evolving global regulatory environment has caused the traditional client base - the sell-side - to change their strategies and business models as they seek to adapt. Banks and other market participants rely even more on technology to support their business and their management of regulatory requirements. An increasing focus on electronic markets and post trade services has created exciting opportunities for NEX and enables the expansion of its product and service portfolio.

Becoming NEX

The re-branding from ICAP to NEX was an exercise carried out with customary attention to detail, speed and professionalism. During the last weeks of 2016, 16 offices were rebranded around the world with no disruption to business, and a new global intranet and multiple external websites across the Group were successfully launched. This was accompanied by the largest external advertising campaign ever undertaken by the Company. NEX is now firmly anchored in the minds of its employees, clients and partners.

Ready for the future

NEX is in a position to change its industry. It has a portfolio of services that no one else can offer, and which gives it the ability to build its reputation and brand as the world's leading electronic platform for OTC transactions and post trade services to all parties. It is already expanding beyond its traditional sell-side client base of banks and professional trading firms to embrace hedge funds, corporates, asset managers, sovereign wealth funds and central banks. NEX will become synonymous with a supermarket of services, delivering world-class products and first-rate service and support to its clients.

With NEX Markets it has the world's leading electronic trading platform for the fixed income markets and a leading electronic FX trading business with significant market share in many currencies. It continues to develop the next generation of financial technology for the trading community which will enable it to create the pre-eminent global e-platform for the FX and fixed income markets. At the same time, it is restructuring the business to be far more client-focused.

In NEX Optimisation it already has many solutions that help clients simplify and optimise their resources across the transaction lifecycle. Its move towards the consolidated infrastructure and interface of NEX Infinity with its unified sales and support environment that caters for both sell- and buy-side as well as major corporates will provide it with enormous opportunities. As part of this consolidation process the division is aligning its structure with that of its clients, allowing them a clear, NEX business-agnostic view of the full suite of products and services.

At the beginning of the year ENSO Financial Analytics was acquired. They have demonstrated the ability to build a hedge fund client base to which they deliver an expanding and well-regarded product set. In October the acquisition of Abide Financial was completed. Abide Financial fits perfectly with the Group's strategy to serve its clients' changing needs. They are one of a very small number of companies who offer holistic regulatory reporting services, which will become ever more critical as financial markets evolve.

During the year through NEX Opportunities the Group invested in RSRCHXchange, a MiFID II marketplace for institutional research; Axoni, a leading provider of distributed ledger technology; OpenFin, a unifying operating layer for financial desktops; and Cloud9 Technologies, a cloud-based communication provider. In addition, the Group made a further investment in OpenGamma, a leading provider of derivatives risk analytics.

These acquisitions and investments demonstrate how the team within the financial technology investment business, NEX Opportunities, is successfully building an impressive portfolio of emerging financial technology companies.

NEX Exchange has exactly the same regulatory, legal and tax status as the alternative markets, which it combines with a high quality service to help entrepreneurs raise capital on the public market.

NEX Transformation Programme

NEX is focused on driving revenue growth, increasing its operating profit margin and delivering value to its shareholders. Based on the company's detailed 3 year plan, by the end of 2019/20 both divisions aspire to report an operating margin of at least 40%, with Group revenue CAGR at 7-10%.

NEX's current core cost base is expected to increase in line with inflation over the medium term. Following the completion of the sale of ICAP's Global Broking division to TP ICAP plc , NEX Group management has undertaken a review of the business and its requirements. As a result, NEX has identified cost savings of approximately £25 million to be delivered by 2019/20. These savings will be derived from the reassessment of corporate functions and the streamlining of infrastructure particularly within NEX Optimisation. The cost to achieve these savings will be approximately £10 million, which will not be treated as an exceptional item. The costs savings will be offset by continued investment in new products in addition to increased costs from potential acquisitions and special projects.

Dividend

The directors recommend a final dividend of 27.0p per share. - If approved, the final dividend will be paid on 21 July 2017 to shareholders on the register at the close of business on 30 June 2017. The shares will be quoted ex-dividend from 29 June 2017.

The full-year dividend will be 38.5p per share (2015/16: 38.5p per share) including the interim dividend of 11.5p per share (equivalent to the interim dividend paid of 6.6p per share on ICAP plc shares). The 2015/16 full-year dividend comparative has been restated from 22.0p per share to 38.5p per share to reflect the effect of the share consolidation. The full-year dividend per share is covered 1.1 times (2015/16: 1.1 times) by trading EPS (basic) from continuing and discontinued operations of 42.9p per share.

Outlook

Trading activity since the start of the year remains subdued as volatility remains low despite sporadic activity around political events. In the year ahead NEX will continue to make progress on its strategy to deliver against its growth objectives and drive operational leverage.

Review of operations

Group segmental results

*Restated - due to the change in accounting policy for operating segments.

** NEX Markets includes: BrokerTec, EBS and CFETS contract.

*** NEX Optimisation includes: Traiana, TriOptima, Reset, NEX Data, ENSO, Abide and NEX Opportunities.

**** NEX Group and other includes: NEX Exchange, Shipping, BSN and corporate costs.

NEX Markets

NEX Markets is a leading electronic trading platforms and solutions business in FX and fixed income products. The BrokerTec and EBS platforms offer efficient and effective trading solutions to clients in more than 50 countries across a range of instruments including spot FX, FX Forwards, US Treasuries, European government bonds and EU and US repo. These electronic platforms are built on its bespoke networks connecting participants in financial markets.

*Restated - hedging impact and NEX Exchange are now reported separately.

For the year ended 31 March 2017, revenue increased by 8% on a constant currency basis and increased by 20% on a reported basis to £313 million (2015/16: £261 million). The trading operating profit increased to £116 million (2015/16: £92 million) and the trading operating profit margin increased 2 percentage points to 37%. 

BrokerTec

BrokerTec is a global electronic platform for the trading of US Treasuries, European government bonds and EU and US repo. It facilitates trading for banks and non-bank professional trading firms.

For the year ended 31 March 2017, revenue increased by 8% on a constant currency basis and increased by 17% on a reported basis to £155 million (2015/16: £133 million). This performance reflects a 2% decrease in US Treasury average daily volume to $164 billion, a 3% increase in US repo to $219 billion and a 6% increase in European repo to €186 billion.

Geo-political events dominated this past year's news and underpinned sporadic trading in US Treasuries. Last November, the result of the US presidential election produced the second highest volume day since the launch of BrokerTec underpinned by the resilience of the platform. Speculation around the US President's policies also continued to drive heightened volatility. Additionally, the Federal Reserve, although keeping interest rates on hold for much of the year, has now embarked on a measured agenda of raising rates providing trading opportunities.

Trading activity in the secondary market for European Government bonds has steadily improved from the lows seen in the first half of the year. Banks continue to hold less inventory and client flow is still substantially lower. Trading activity remains concentrated around new bond issuance in addition to an uplift more generally in France and Holland in the run up to their elections.

In March 2017, BrokerTec announced that it had completed the transaction to acquire a majority stake in e-MID SIM SpA. (e-MID), the first Italian electronic central limit order book platform for interbank deposits and overnight indexed swaps. The transaction offers BrokerTec Europe a strong footprint in the Italian debt and money markets.

The US repo product benefited from the uptick in market volatility that began ahead of the Brexit vote and persisted through the US presidential election. Trading activity in the European repo market benefited from increased volatility, demand for good quality collateral and a lack of supply from the buy side.

BrokerTec Direct is the relationship-based trading platform that provides the opportunity for liquidity consumers to receive tailored streams of liquidity for US Treasury benchmarks from major liquidity providers. The existing platform will be upgraded to deliver enhanced functionality which will enable BrokerTec to increase its existing client base and broaden the overall offering to further complement the existing core BrokerTec business.

EBS

EBS, a global electronic platform for the FX markets, is a reliable and trusted source of executable and genuine liquidity across major and emerging market currencies. Both its anonymous and disclosed trading venues give its clients multiple execution and distribution options and the benefit of an established and far-reaching distribution network of liquidity providers and consumers.

For the year ended 31 March 2017, revenue is flat on a constant currency basis and increased by 13% on a reported basis to £145 million (2015/16: £128 million) contrasting with a 7% decrease in average daily volume to $83 billion. The significant uptick in volume for the five weeks following the result of the US presidential election was unable to offset lower volumes in the first half of the year.

EBS Market, the exchange-like central limit order book, remains the benchmark for the professional FX trading community, connecting buyers and sellers of currencies in more than 50 countries. It has maintained its position as a primary inter-bank venue for the trading of the world's most actively traded currency pairs, including euro/dollar and dollar/yen. There is a focused plan in place to enhance the user experience on the EBS Market platform and expand into other currency pairs.

During the year EBS Market has continued to develop and create liquidity in both offshore Chinese renminbi (CNH) and non-deliverable forwards (NDFs) with average daily volume growing by more than 11% and 24% respectively compared with the same period last year.

Despite the ongoing headwinds from a low interest rate environment, EBS Market continues to innovate. In February 2017, it launched EBS Live Ultra, the fastest FX live streaming data feed available from a primary FX market venue at five millisecond (ms) intervals. This faster data feed is available only to market participants that meet certain trading criteria. The slower data feeds at 100ms and 20ms have been competitively repriced to attract new client interest.

NEX eFix, the matching service that enables clients to execute fix interest electronically on the EBS Market platform, has continued to demonstrate significant growth. Average daily volume has increased by more than 50% over the same period in 2015/16 to more than $1.6 billion matched per day.

EBS Direct is a platform that allows liquidity providers to stream tailored prices directly to liquidity consumers. Interest in the platform continues to grow and the platform has more than 45 liquidity providers and 400 liquidity consumers using the service. The EBS Direct platform had a 21% increase in average daily volume over the prior year to $21 billion. EBS Select, which allows non-banks to become liquidity providers to non-bank liquidity consumers, has seen a sharp increase in participants with over 25 liquidity providers and 180 liquidity consumers now actively trading. FX forwards and swaps volumes continue to grow and attract additional participants, with more than 20 new liquidity consumers added since November 2016. This allows access to a significant part of the FX market in which EBS has never previously participated.

During the year, NEX Treasury added new FX functionality onto the platform to support the trading of FX spot, forwards and swaps, leveraging FX pricing from EBS Direct. Currently there are over 475 corporates and more than 625 funds and banks active on the platform.

CFETS contract

In June 2016, NEX announced that CFETS, China's official inter-bank market trading platform and infrastructure provider, had chosen NEX Markets to deliver the underlying technology for fixed income and FX electronic execution services in mainland China. The deal, valued at $65 million over a three-year period, will see NEX expand into China, a key growth market for the business.

NEX Optimisation

NEX Optimisation offers a portfolio of cloud-hosted services across the transaction lifecycle. Ranging from pre-execution credit checking to multilateral portfolio compression, NEX Optimisation's purpose is to simplify its clients' workflow and help them optimise their resources by mitigating risk, increasing efficiency, reducing costs and streamlining increasingly complex processes.

During the year NEX Optimisation acquired ENSO, a treasury and portfolio finance solution business for the hedge fund industry, with over $1 trillion in assets under advisory, and Abide Financial, which provides solutions for market participants to meet their regulatory reporting obligations. Alongside Traiana and NEX Data, Abide Financial forms a central piece of the NEX Regulatory Reporting business which provides a cross asset and cross jurisdictional regulatory reporting solution for NEX's clients.

NEX Optimisation is currently reshaping its organisational structure. The primary focus is to organise the business in a way that clients want to use services, matching the way they think about their financial, regulatory and operational challenges. This will be achieved by restructuring NEX Optimisation's legal entities and products to six solutions which resonate with clients: Trade and Portfolio Management, Analytics, Regulatory Reporting, Financial Resource Optimisation, Data Insights and Opportunities.

In conjunction with the restructuring, NEX Optimisation continues to build the NEX Infinity platform which will provide clients with a single platform that seeks to simplify trade processing, reduce costs and optimise their risk and capital across the entire transaction lifecycle. It will be capable of delivering both NEX Optimisation's suite of industry-leading services and others available from third-party vendors.

NEX Infinity will deliver efficiencies in the division's operating model by reducing duplicated functions and having a single data ingestion and interface with clients.

For the year ended 31 March 2017, revenue increased by 9% on a constant currency basis and increased by 24% on a reported basis to £240 million (2015/16: £194 million). The trading operating profit was marginally down at £69 million (2015/16: £70 million) and the trading operating profit margin reduced by seven percentage points to 29%, driven by the consolidation of recent loss-making acquisitions (ENSO and Abide Financial) and additional investment.

TriOptima

TriOptima lowers costs and mitigates risk in OTC derivatives markets, primarily through the elimination and reconciliation of outstanding transactions. It continues to benefit from the strategic alignment of its offerings with the G20 policy objectives of transparency and risk reduction in the financial system.

For the year ended 31 March 2017, revenue increased by 6% on a constant currency basis and by 19% on a reported basis to £86 million (2015/16: £72 million). Revenue growth was driven by the expansion into new market segments for the portfolio compression service, triReduce, and the uptake of new offerings in the reconciliation service, triResolve.

The stringent leverage ratio included within the Basel III rules continues to drive demand from banks for the compression service. During the year, the compression service terminated $191 trillion of gross notional outstanding (2015/16: $168 trillion). Since launch, more than 253 financial institutions have participated in eliminating $959 trillion in total notional outstanding from the OTC derivatives market.

triReduce continues to innovate and expand its product and market coverage. In April 2016, it launched the first Swedish krona swaps compression cycle in collaboration with Nasdaq; in May 2016, it completed the first compression cycle for cleared euro interest rate swaps in Eurex Clearing; in August 2016, the first cycle for cleared Mexican pesos at the CME Group clearing house took place and compression for NDF and non-CLS eligible currencies was launched; and in October 2016, it introduced the compression for client cleared swaps at LCH SwapClear.

Initially a portfolio reconciliation service, triResolve has expanded its suite of offerings during the year to include triResolve Margin for the automated calculation and agreement of variation margin allowing clients to meet the regulatory requirements for variation margin which took effect in March 2017. Since launch, 70 subscribers have joined the triResolve Margin service.

Standard portfolio reconciliation, as required by regulation, continues to experience steady growth. The number of institutions using the triResolve core service has increased from 1,680 during 2015/16 to more than 1,900 who participate in 476,000 party-to-party reconciliations each month (2015/16: 384,000).

In February 2017, it was announced that Per Sjöberg, Chief Executive Officer of TriOptima, decided to leave the business to pursue other ventures. The board thanks him for all of his contributions since he founded the business in 2000.

Traiana

Traiana monitors pre trade risk and automates post trade processing of financial transactions across multiple asset classes. Its solutions have become the market standard for post trade processing of FX, exchange traded derivatives, fixed income, CDS and synthetic and cash equity transactions. Traiana's Harmony network connects more than 1,000 global banks, broker/dealers, buy side firms and trading platforms. 

For the year ended 31 March 2017, revenue decreased by 5% on a constant currency basis and increased by 8% on a reported basis to £57 million (2015/16: £53 million) following a reduction in FX volume-related services and the introduction of a new pricing structure to incentivise long-term client contracts. This was partly offset by an increase in non FX-related revenue.

Traiana continues to innovate, grow and diversify its business into other asset classes. In June 2016, it announced that Barclays and UBS had gone live on its Harmony CCP Connect for Equities platform. These banks will further enhance the netting benefits already seen by the market through automated central clearing of OTC equity trades. In February 2017, Traiana launched Swaps Centre, a suite of services which enable swaps providers to electronically manage payments and confirmations in equity swaps. Traiana has seen continued strong growth in volumes via its Harmony Equity CCP service which plays an important role in reducing counterparty risk and increasing transparency.

NEX Data

NEX Data delivers independent market intelligence and price information for OTC data to financial market participants from information received from NEX Markets and third parties. NEX Data generates subscription-based fees as well as licensing fees from other index administrators for the use of NEX Data in their indices.

For the year ended 31 March 2017, revenue increased by 30% on a constant currency basis and 50% on a reported basis to £48 million (2015/16: £32 million) driven by organic growth on existing services, the launch of new pricing and analytics products and electronic transaction based Indices. In addition, a change to direct client billing increased both revenue and the related operating expenses.

During the year, NEX Data launched the first fully electronic trade-backed CNH FX Spot benchmark following considerable interest from a number of major Chinese banks. In addition, NEX Data and ENSO released the ENSO Market Rate; a reference rate which provides securities lending data from 100 of the largest asset managers.

In January 2017, NEX Data became a key distributor for Tradition's market data and information services division. The agreement includes real-time and end-of-day prices sourced directly from Tradition's global electronic, hybrid and voice broking operations in all asset classes. By acting as a distributor to Tradition, which offers complementary data services, NEX Data will be able to expand its multi-asset class and Asian market coverage and develop new services in pricing, analytics and indices.

Reset

Reset is a provider of risk mitigation services, reducing basis risk within trading portfolios in interest rate, FX, equity index and inflation derivatives.

For the year ended 31 March 2017, revenue decreased by 12% on a constant currency basis and was flat on a reported basis at £37 million (2015/16: £37 million) as the business continues to be affected by low short dated interest rate volatility in Europe and further dampened volatility as a result of the ECB's quantitative easing programme. During the year, commentators speculated about the timing of an increase in US interest rates which began a period of increased demand for Reset's US dollar services and continued with the US presidential election and Federal rate rises in December 2016 and March 2017. Related FX volatility also benefited NDF volumes. Despite the drag of subdued Eurozone demand, the business is well placed to capitalise on higher client volumes on the back of further US interest rate moves.

ENSO

In April 2016, ENSO was acquired by NEX through NEX Opportunities. ENSO delivers data, analytics and workflow tools that enable hedge funds and asset managers to manage their relationships with prime brokers more effectively. ENSO provides a complete view of an individual hedge fund's relationships across multiple counterparties, delivering insights on counterparty credit risk, collateral management, portfolio financing and treasury. 

During the course of the year, ENSO's client base grew by 16% to 104 clients and its revenue for the year ended 31 March 2017 was £9 million. Based on current investment plans, ENSO is expected to achieve run rate break even profitability within the next 18 months.

The future expansion of ENSO'S hedge fund client base is expected to be driven by sales of ENSO Edge, a product which has been developed for funds with assets under management of less than $1 billion, and the entry into new geographies, specifically Asia. ENSO is looking to leverage the capabilities of the other NEX companies, the first example of which is the partnership with NEX Treasury that will allow ENSO clients to invest excess cash into money market funds via the NEX Treasury platform.

Abide Financial

In October 2016, Abide Financial was acquired by NEX through NEX Opportunities. Abide Financial is a market leader in the provision of regulatory reporting technology, helping market participants ensure they are compliant with evolving reporting obligations. The company acts as a reporting hub for EMIR and as an Approved Reporting Mechanism for MiFID. Abide Financial is currently awaiting ESMA's approval to become a trade repository, and recently submitted an application to become a MiFID II Data Reporting Services Provider. Alongside Traiana and NEX Data, Abide Financial powers the NEX Regulatory Reporting division to deliver a holistic MiFID II offering for NEX's clients.

For the period since acquisition to 31 March 2017, revenue was £3 million. Abide Financial is expected to achieve run rate break even profitability within the next 18 months.

NEX Opportunities

Through NEX Opportunities, NEX is building an investment portfolio of emerging financial technology companies. It identifies and provides capital to companies delivering new platforms, business models and next generation technologies with the objective to drive efficiencies, transparency and scale across the transaction lifecycle. NEX Opportunities has invested £35 million in eight portfolio companies.

During the period, NEX Opportunities invested in RSRCHXchange, a MiFID II compliant marketplace for institutional research; Axoni, a leading provider of distributed ledger technology; OpenFin, a unifying operating layer for financial desktops; and Cloud9 Technologies, a cloud-based communication provider. In addition, NEX Opportunities made a further investment in OpenGamma, a leading provider of risk analytics

Financial review

Summary consolidated income statement

\* The discontinued profit after tax is presented on one line in the consolidated income statement; a separate discontinued income statement is presented in note 5 to the financial statements

*\* Trading EPS (basic) and the full-year dividend per share have been restated for the year ended 31 March 2016 to incorporate the effect of the share consolidation

Management plans and reviews the financial performance of the business using trading results that exclude acquisition and disposal costs and exceptional items (see the basis of preparation note to the financial statements). We choose to focus on trading results as we believe that this provides a clearer view of the business performance.

On 30 December 2016, the Group completed the disposal of its global hybrid voice broking and information business, including the associated technology and broking platforms (including i-Swap and Fusion), and certain joint ventures and associates (together IGBB), to TP ICAP plc (the Transaction). The results of the IGBB business, the gain on disposal of IGBB and one-off separation costs arising from the transaction have been presented as discontinued operations on one line in the Group consolidated income statement (net of tax). This financial review focuses on the trading performance from continuing operations.

Trading revenue

Trading revenue from continuing operations was £543 million, which is £83 million (18%) up on the prior year. Revenue benefited from the weakening of pound sterling against the dollar and from new businesses.

Trading profit before tax

The Group reported a £6 million (4%) increase in trading operating profit from continuing operations. The trading operating profit excluding the effects of hedging losses was £17 million (12%) up on the prior year. Trading profit before tax was £4 million (4%) up on the prior year as the improved trading operating profit was partially offset by a £2 million increase in net finance costs.

Tax on trading profit

The Group's tax charge of £28 million on trading profit before tax from continuing operations represents a continuing effective tax rate (ETR) of 25% (2015/16: 21%). The continuing ETR primarily reflects the various statutory tax rates applied to taxable profits in territories in which the Group operates.

Acquisition and disposal costs

For the year ended 31 March 2017, acquisition and disposal costs from continuing operations were a £1 million gain (2015/16: £74 million charge) before a tax credit of £6 million (2015/16: £16 million).

The acquisition and disposal costs from continuing operations include a £19 million (2015/16: £nil) fair value gain arising from the increased investment in ENSO and an additional £2 million fair value gain arising from other transactions, which were partially offset by £20 million of amortisation charges (2015/16: £38 million) on acquired intangible assets.

For a more detailed breakdown of the Group's acquisition and disposal costs see note 3 to the financial statements.

Exceptional items

Continuing

For the year ended 31 March 2017, exceptional items from continuing operations were a £5 million gain (2015/16: £9 million charge) before tax of £nil (2015/16: £2 million tax credit). The exceptional items from continuing operations relate to a £7 million release of onerous lease provisions as previously vacated office spaces have now been sublet, proceeds from a legal expenses insurance claim of £3 million less legal expenses incurred in relation to regulatory matters of £5 million.

Discontinued

For the year ended 31 March 2017, exceptional items from discontinued operations were £1,134 million (2015/16: £31 million) before a tax credit of £6 million (2015/16: £4 million).

The exceptional items from discontinued operations represent the gain on the disposal of IGBB of £1,162 million (2015/16: £nil), which is presented net of £28 million of costs of sale. Other transaction-related costs include separation costs of £28 million (2015/16: £31 million). The proceeds from the Transaction in the form of 56% of the shares in TP ICAP were fully transferred to NEX shareholders.

For further information, please see notes 4 and 5 to the financial statements.

Trading EPS and dividend

Trading EPS (basic) is calculated based on the trading profit for the year.

Management believes that trading EPS (basic) is the most appropriate EPS measurement ratio for the Group as this most closely reflects the ongoing generation of cash attributable to shareholders and in turn the Group's ability to fund sustainable dividends. In line with this, the Remuneration Committee primarily considers trading EPS (basic) in its review of management performance and uses that metric in the remuneration of the executive directors.

Trading EPS and dividend per share have been stated for the year ended 31 March 2017 (and restated for the year ended 31 March 2016) using the weighted average number of shares in the period from the date of the share consolidation to the balance sheet date. For further details, see notes 6 and 7 to the financial statements.

The Group reported a trading EPS (basic) from continuing operations of 23.2p per share, down from the prior year (2015/16: 23.6p per share). This was driven by the 4% increase in trading profit before tax offset by a four percentage point increase in trading ETR. Trading EPS (basic) for the Group including discontinued operations was 42.9p per share, down from the prior year (2015/16: 43.4p per share).

The current year earnings include only nine months of discontinued operations in comparison to 12 months in the prior year.

The directors recommend a final dividend of 27.0p per share. If approved, the final dividend will be paid on 21 July 2017 to shareholders on the register at the close of business on 30 June 2017. The shares will be quoted ex-dividend from 29 June 2017.

The full-year dividend will be 38.5p per share (2015/16: 38.5p per share) including the interim dividend of 11.5p per share (equivalent to the interim dividend paid of 6.6p per share on ICAP plc shares). The 2015/16 full-year dividend comparative has been restated from 22.0p per share to 38.5p per share to reflect the effect of the share consolidation. The full-year dividend per share is covered 1.1 times (2015/16: 1.1 times) by trading EPS (basic) from continuing and discontinued operations of 42.9p per share.

Free cash flow 

The following free cash flow conversion table and the analysis is on a total Group basis including continuing and discontinued operations.

*Before exceptional items 

**Free cash flow for the year ended 31 March 2016 has been restated to include movement in restricted funds in financing activities instead of operating activities

Trading free cash flow generated during the period was £188 million, a conversion rate of 118% (2015/16: 107%). Over the medium term free cash flow is expected to be 80-90% of post-tax trading profit. The excess in cash conversion over profit for the current year was mainly as a result of working capital movements, which is expected to normalise.

Excluding the effects of working capital, the cash conversion would be in the order of 90%. The underlying shortfall in cash conversion is from the excess in capital expenditures, primarily IT spend, over amortisation and depreciation. Other non-cash expenses, such as share-based payment charges, partially offset this.

Trading free cash flow of £188 million was used to pay £142 million in dividends to shareholders.

Balance sheet highlights

The Group's net assets as at 31 March 2017 were £979 million (2015/16: £1,018 million).

Intangible assets arising on consolidation

The Group's goodwill and other intangible assets arising from consolidation from continuing operations as at 31 March 2017 were £1,026 million (2015/16: £826 million). During the period, the Group recognised £103 million goodwill and other intangible assets in relation to its acquisitions of ENSO, Abide Financial and e-MID. The remaining increase mainly resulted from the depreciation of pound sterling against the dollar and euro.

Management reviewed the Group's goodwill and other intangibles assets arising on consolidation for impairment as at 31 March 2017 and concluded that there was no impairment at the date.

The review was based on certain estimates and assumptions, including future cash flow projections and discount rates. The Audit Committee challenged management's judgements and estimates and has approved the appropriateness of management assumptions.

Trade receivables and payables

NEX has changed its accounting policy for recording financial instruments relating to its matched principal business from trade date accounting to settlement date accounting. Matched principal trade receivables and payables as at 31 March 2016 have been restated as a result of the change in accounting policy.

Liquidity and funding

*Cash includes cash and cash equivalents of £321 million and restricted funds of £103 million (all of which is in regulated trading entities)

The Group's overall funding position as at 31 March 2017 remains strong.

As at 31 March 2017, the Group had committed undrawn headroom under its core credit facilities of £300 million (2015/16: £315 million). During the year, the Group agreed an extension of the maturity date on its revolving credit facility to 31 March 2019.

The gross debt position from continuing operations decreased by £76 million (13%) to £507 million as at 31 March 2017. The decrease primarily relates to the repayment of the RCF (2015/16: £108 million) following the receipt of £330 million cash from TP ICAP. As at 31 March 2016, the earliest debt maturity was on the £125 million retail bond (5.5% coupon rate, due in July 2018).

At 31 March 2017, the Group's long-term issuer ratings were unchanged at Baa3 (stable) by Moody's and BBB (stable) by Fitch.

Net debt

Net debt including restricted funds from continuing operations decreased by £6 million (7%) in the year to £83 million as at 31 March 2017. During the period, the Group (including discontinued operations) converted £188 million of free cash flow. This was used to pay £142 million in dividends.

On disposal of IGBB on 30 December 2016, NEX received £330 million of cash from TP ICAP under the terms of the Transaction, which partially offset the cash derecognised on the disposal. During the year, the Group paid £60 million in relation to various acquisitions (ENSO, Abide Financial, e-Mid and other investments). There were also £48 million of exceptional items paid during the year, in connection with transaction related expenses.

Financial statements

Consolidated income statement

Year ended 31 March 2017

Year ended 31 March 2016

Consolidated statement of comprehensive income

Consolidated and company balance sheet

The financial statements and accompanying notes were approved by the board on 15 May 2017 and signed on its behalf by:

Stuart Bridges

Group Chief Financial Officer

Consolidated statement of changes in equity

* As part of the capital reorganisation, NEX Group plc acquired the ordinary shares of ICAP plc by way of the Scheme of Arrangement and undertook a capital reduction and share consolidation.

Consolidated and company statement of cash flow

* Cash includes cash and cash equivalents of £321m (2015/16: £516m) and overdrafts of £nil (2015/16: £83m).

The consolidated cash flow statement for the year ended 31 March 2016 has been restated to include restricted funds in financing activities instead of operating activities. Restricted funds comprises cash held at a CCP clearing house or a financial institution providing NEX with access to a CCP.

Cash flows of discontinued operations

Cash inflows from operating activities of £141m (2015/16: £23m), cash outflows from investing activities of £13m (2015/16: £15m) and cash outflows from financing activities of £1m (2015/16: £2m) were incurred in the year relating to discontinued operations. Cash flows of discontinued operations have been included in the consolidated statement of cash flow above.

Basis of preparation

Preparation of financial statements

The consolidated financial statements of the Group and the separate financial statements of NEX Group plc have been prepared in accordance with IFRSs, as issued by the IASB and the interpretations issued by the IFRS Interpretations Committee (IFRIC) and their predecessor bodies, and as endorsed by the EU and the Companies Act 2006 applicable to companies reporting under IFRS. In publishing the parent company financial statements here together with the Group financial statements, NEX Group plc has taken advantage of the exemption in section 408(3) of the Companies Act 2006 not to present its individual income statement, individual statement of comprehensive income and related notes that form a part of these financial statements. The financial statements are prepared in pound sterling, which is the functional currency of the Company, and presented in millions. NEX Group plc is incorporated and domiciled in England and Wales.

The significant accounting policies adopted by the Group and the Company are included at the beginning of the notes to which they relate.

The preparation of financial statements requires management to apply judgements and the use of estimates and assumptions about future conditions. Management considers impairment of goodwill and other intangible assets arising on consolidation, investment in joint ventures and associates, provisions, contingent liabilities (note 9), technology development revenue (note 1) and the presentation of exceptional items (note 4) to be the areas where increased judgement is required. Further information about key assumptions concerning the future, and other key sources of estimation uncertainty, are set out in the relevant notes to the financial statements. Estimates and assumptions are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Due to the inherent uncertainty in making estimates, actual results reported in future periods may be based on amounts which differ from those estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Segmental information and the number of employees analysed by operating segment for the year ended 31 March 2016 have been restated due to a change in accounting policy for operating segments (note 1). Earnings per share, dividends per share, treasury shares and shares held in the employee share trusts as at 31 March 2016 have been restated as if the share consolidation had occurred at the beginning of the comparative year (notes 6 and 7). The consolidated cash flow statement for the year ended 31 March 2016 has been restated to include restricted funds in financing activities instead of operating activities (note 8). Matched principal trade receivables and payables as at 31 March 2016 have been restated due to a change in accounting policy from trade date accounting to settlement date accounting. All notes to the financial statements have been restated for the year ended 31 March 2016 to be on a continuing operations basis, where possible.

The Company was incorporated on 18 February 2016 and on 15 December 2016 obtained control of the entire share capital of ICAP plc via the Scheme of Arrangement. There were no changes in rights or the proportion of control exercised as a result of this transaction. Although the Scheme of Arrangement resulted in a change of legal ownership, this was a common control transaction and therefore outside the scope of IFRS3. In substance these financial statements reflect the continuation of the pre-existing group headed by ICAP plc and the financial statements have been prepared applying the principles of a capital reorganisation.

As a result, the consolidated comparatives presented in these financial statements are the consolidated results of ICAP plc. The prior year consolidated balance sheet reflects the share capital structure of ICAP plc. The current year consolidated balance sheet presents the legal change in ownership of the Group, including the share capital of NEX Group plc and the reserves arising as a result of the Scheme of Arrangement. The Company comparatives presented in these financial statements are those of NEX Group plc, not ICAP plc.

Discontinued operations

On 30 December 2016, the Group completed the disposal of IGBB to Tullet Prebon, now renamed TP ICAP plc. The results of the IGBB business have been presented as discontinued operations in the consolidated income statement as the sale was a single co-ordinated plan to dispose of a separate major line of business. The assets and liabilities attributable to IGBB were presented as held for sale assets and liabilities on the face of the balance sheet as at 31 March 2016 because at that point the disposal met the criteria in IFRS5 for held for sale classification since the business was available for sale in its present condition and the sale was highly probable. The assets and liabilities attributable to IGBB are no longer presented on the balance sheet as at 31 March 2017 since the Transaction completed during the year. The shares in TP ICAP plc were fully transferred to NEX shareholders and are deemed as a distribution through equity.

Presentation of the income statement

The Group maintains a columnar format for the presentation of its consolidated income statement. The columnar format enables the Group to continue its practice of improving the understanding of its results by presenting its trading profit. This is the profit measure used to calculate trading EPS (note 6) and is considered to be the most appropriate as it better reflects the Group's trading earnings. Trading profit is reconciled to profit before tax on the face of the consolidated income statement, which also includes acquisition and disposal costs and exceptional items.

The column 'acquisition and disposal costs' includes: any gains, losses or other associated costs on the full or partial disposal of investments, associates, joint ventures or subsidiaries and costs associated with a business combination that do not constitute fees relating to the arrangement of financing; amortisation or impairment of intangible assets arising on consolidation; any re-measurement after initial recognition of deferred contingent consideration which has been classified as a liability; and any gains or losses on the revaluation of previous interests. The column may also include items such as gains or losses on the settlement of pre-existing relationships with acquired businesses and the re-measurement of liabilities that are above the value of indemnification.

Items which are both of a non-recurring nature and material are disclosed separately to give a clearer presentation of the Group's results. These are shown as 'exceptional items' on the face of the consolidated income statement. For the year ended 31 March 2017, the gain on disposal of IGBB was presented in the column 'exceptional items' as opposed to the column 'acquisition and disposal costs' given the exceptional nature and size of the disposal.

When the Group has disposed of or intends to dispose of a business component that represents a major line of business or geographic area of operations, it classifies such operations as discontinued. The post-tax profit or loss of the discontinued operations is shown as a single line on the face of the consolidated income statement, separate from the other results of the Group. The consolidated income statement for the comparative periods is restated to show the discontinued operations separate from those generated by the continuing operations.

Basis of consolidation

The Group's consolidated financial statements include the results and net assets of the Company, its subsidiaries and the Group's share of joint ventures and associates.

Subsidiaries

An entity is regarded as a subsidiary if the Group has control over its strategic, operating and financial policies and intends to hold the investment on a long-term basis for the purpose of securing a contribution to the Group's activities.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of acquisition is measured at fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in the business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the costs of the acquisition are less than the fair value of the net assets acquired, the difference is recognised directly in the consolidated income statement.

Fees associated with an acquisition are expensed as incurred. When the Group increases its investment in an entity resulting in an associate becoming a subsidiary, the intangibles related to the acquisition are valued and the elements of those not previously recognised as a share of net assets are recorded as revaluation gains realised in the year in other comprehensive income. A change of ownership that does not result in a loss of control is classified as an equity transaction, with the difference between the amount by which the non-controlling interest is recorded and the fair value of the consideration received recognised directly in equity.

Where the Group has issued a put option over shares held by a non-controlling interest, the Group derecognises the non-controlling interest and instead recognises a contingent deferred consideration liability for the estimated amount likely to be paid to the non-controlling interest on exercise of those options. The residual amount, representing the difference between any consideration paid/payable and the non-controlling interest's share of net assets, is recognised in equity. Movements in the estimated liability after initial recognition are recognised within the consolidated income statement.

Where the Group has a call option over shares held by a non-controlling interest, the Group continues to recognise the non-controlling interest until it is certain that the option will be called. At that point the accounting treatment is the same as for a put option.

The results of companies acquired during the year are included in the Group's results from the effective date of acquisition. The results of companies disposed of during the year are included up to the effective date of disposal.

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

On consolidation, the accounting policies of Group companies (the Company and its subsidiaries) are consistent with those applied by the Group. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated as part of the consolidation process. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Joint ventures

A joint venture is an entity in which the Group has an interest and, in the opinion of the directors, exercises joint control over its operating and financial policies. An interest exists where an investment is held on a long-term basis for the purpose of securing a contribution to the Group's activities. Following the adoption of IFRS11 'Joint Arrangements' and IAS28 'Investments in Associates and Joint Ventures' on 1 April 2014, investments in joint ventures are recognised using the equity method. Under this method, such investments are initially stated at cost, including attributable goodwill, and are adjusted thereafter for the post acquisition change in the Group's share of net assets.

Associates

The Group classifies investments in entities over which it has significant influence, but not control, and that are neither subsidiaries nor joint ventures, as associates. Investments in associates are recognised using the equity method. Under this method, such investments are initially stated at cost, including attributable goodwill, and are adjusted thereafter for the post acquisition change in the Group's share of net assets.

Available-for-sale investments

The Group classifies investments in entities which are not subsidiaries, joint ventures or associates as available-for-sale investments. Available-for-sale investments are initially recognised at fair value. Available-for-sale investments in equity assets that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are subsequently recorded at cost less impairment. All other available-for-sale investments are fair valued subsequently at each period end.

Foreign currencies

In individual entities, transactions denominated in foreign currencies are recorded at the prior month closing exchange rate between the functional currency and the foreign currency. At each end of the reporting period, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Exchange differences are recognised in the consolidated income statement, except for exchange differences arising on non-monetary assets and liabilities where these form part of the net investment of an overseas business or are designated as hedges of a net investment or cash flow and, therefore, the changes in value resulting from exchange differences are recognised directly in other comprehensive income. Non-monetary items carried at historical cost are translated in the balance sheet at the exchange rate on the original transaction date. Non-monetary items measured at fair value are translated using the exchange rate ruling when the fair value was determined.

On consolidation, the results of businesses with non-pound sterling functional currencies are translated into the presentational currency of the Group at the average exchange rates for the year where these approximate to the rate at the date of the transactions. Assets and liabilities of overseas businesses are translated into the presentational currency of the Group at the exchange rate prevailing at the end of the reporting period. Exchange differences arising are recognised within other comprehensive income. Cumulative translation differences arising after the transition to IFRS are taken to the consolidated income statement on disposal of the net investment.

Goodwill and fair value adjustments arising on the acquisition of a non-pound sterling entity are treated as assets and liabilities of that entity and translated into the presentational currency of the Group at the period closing rate. Where applicable, the Group has elected to treat goodwill and fair value adjustments arising before the date of transition to IFRS as denominated in the presentational currency of the Group. In the consolidated statement of cash flows, cash flows denominated in foreign currencies are translated into the presentational currency of the Group at the average exchange rates for the year or at the rate prevailing at the time of the transaction where more appropriate.

Future accounting developments

At 31 March 2017, the following standards have been issued by the IASB which are not effective for these consolidated financial statements:

· in July 2014, the IASB issued IFRS9 'Financial Instruments', which will replace IAS39 'Financial Instruments: Recognition and Measurement'. NEX expects some classification and measurement changes in relation to its available-for-sale investments and some impairment changes in relation to its financial assets, but these are not expected to be significant from a Group perspective. The standard will become effective for annual periods beginning on or after 1 January 2018. NEX intends to adopt IFRS9 for its financial statements for the year ended 31 March 2019.

NEX does not expect to restate comparatives on initial application of IFRS9 on 1 April 2018 but will provide detailed transitional disclosures in accordance with the amendment requirements of IFRS7;

· in May 2014, the IASB issued IFRS15 'Revenue from Contracts with Customers', which will replace IAS18 'Revenue' and IAS11 'Construction Contracts' and other related interpretations on revenue recognition. Adoption of the standard is not expected to have a significant impact on NEX's main revenue streams of transaction fees and subscription fees. Efforts will be focused on preparing and sourcing information necessary to comply with the enhanced disclosure requirements introduced by IFRS15. The standard will become effective for annual periods beginning on or after 1 January 2018. NEX intends to adopt IFRS15 for its financial statements for the year ended 31 March 2019; and

· in January 2016, the IASB issued IFRS16 'Leases', which will replace IAS17 'Leases' and other related interpretations on leases. NEX expects an increase in both assets and liabilities for transactions currently accounted for as operating leases. The standard will become effective for annual periods beginning on or after 1 January 2019. NEX intends to adopt IFRS16 for its financial statements for the year ended 31 March 2020.

The impact on NEX's financial statements from the adoption of these IFRS standards is currently being assessed and will be disclosed closer to the time of the adoption.

Notes to the financial statements

1. Segmental information

The Group has determined its operating segments based on the management information including trading revenue and trading operating profit reviewed on a regular basis by the Company's board. The Group considers the executive members of the Company's board to be the Chief Operating Decision Maker (CODM). The management information reviewed by the Company's board changed during the year due to the disposal of IGBB. NEX now has two reportable segments: NEX Markets and NEX Optimisation. NEX now also presents a 'NEX Group and other' column, which includes the Group's remaining activities that do not meet the definition of reportable segments, and a 'Hedging impact' column. The 'NEX Group and other' column includes the activities of Shipping, NEX Exchange, BSN, certain joint venture and associate investments and corporate costs. The 'Hedging impact' column shows the effect of hedging which is done centrally. IFRS8 requires entities to present segmental information in the same way that the CODM reviews the information when directing resources and managing the business. We believe that the new segmental disclosure achieves this more accurately. Segmental information for the year ended 31 March 2016 has been restated due to the change in accounting policy for operating segments and to be on a continuing operations basis. Revenue comprises transaction fees, access fees and technology development fees from its NEX Markets business, and fees from the provision of NEX Optimisation services.

NEX Markets

Transaction fees and access fees: the Group acts as an intermediary for FX and fixed income products through the Group's electronic platforms. Revenue is generated from transaction fees which are dependent on the average trading volumes. The Group also charges fees to use the electronic trading platform for access to liquidity in the FX or precious metal markets.

Matched principal business: the Group is involved in a non-advisory capacity as principals in the matched purchase and sale of financial instruments between our clients. Revenue is generated from transaction fees and is recognised in full at the time of the commitment by our clients to sell and purchase the financial instrument.

Technology development: the Group provides technology development services. Fees from the development of technology are recognised as revenue by reference to the stage of completion, including the completion of services provided for post-delivery service support. This process requires the exercise of significant judgement by management.

NEX Optimisation

The Group receives fees from the sale of financial information and provision of NEX Optimisation services to third parties. These are stated net of VAT, rebates and other sales taxes and recognised in revenue on an accruals basis to match the provision of the service.

TriOptima provides risk mitigation solutions for OTC derivatives, primarily through the elimination and reconciliation of outstanding transactions. Traiana operates market infrastructure for pre- and post-trade processing, risk management and regulatory compliance across multiple asset classes. NEX Data delivers pricing, analytics and index solutions to financial market participants from information received from NEX Markets and elsewhere. NEX Data generates subscription-based fees as well as licensing fees from other index administrators for the use of NEX Data in their indices. Reset is a provider of risk mitigation services, reducing basis risk within trading portfolios in interest rate, FX, equity index and inflation derivatives.

ENSO delivers data, analytics and workflow tools that enable hedge funds and asset managers to more effectively manage their relationships with prime brokers. ENSO provides a complete view of an individual hedge fund's relationships across multiple counter parties, delivering insights on counter party credit risk, collateral management, portfolio financing and treasury. Abide Financial provides regulatory reporting technology, ensuring market participants are compliant with evolving reporting obligations. Abide Financial acts as a reporting hub for EMIR, Approved Reporting Mechanism for MiFID and a Regulatory Reporting Mechanism for REMIT.

Segmental results relating to the Group's total operations

* Trading EBIT is the trading profit before deducting net finance cost and tax.

** Given that the Group's debt financing arrangements are managed centrally through a treasury function, the board of NEX Group plc does not incorporate net finance cost in the assessment of the segments' performance, therefore this is presented on a total Group basis.

**\* Trading EBITDA is the trading profit before deducting net finance cost, tax, amortisation, depreciation and impairment charges.

The Group did not earn more than 10% of its total revenue from any individual client. The Group earned revenue from continuing operations of £57m (2015/16: £47m) from entities in the UK, £221m (2015/16: £187m) from entities in the US, £86m (2015/16: £72m) from entities in Sweden and £38m (2015/16: £37m) from entities in Singapore. NEX's regulated companies will meet CRD IV disclosure requirements, to the extent in scope, by disclosing the information in their 2016/17 financial statements or on the NEX website.

Continuing revenue from the rendering of services recognised in the year was £530m (2015/16: £460m). Continuing revenue from technology development recognised in the year was £13m (2015/16: £nil). The Group used the costs-incurred method to estimate the stage of completion of technology development revenue. Progress on technology development projects is on track to date.

The hedging impact relates primarily to NEX Markets.

Segmental information for the year ended 31 March 2016 has been restated due to the change in accounting policy for operating segments and to be on a continuing operations basis

2. FX exposure

The table below shows the actual impact on the Group's 2016/17 results of the movement during the year of the dollar and euro exchange rates in terms of translational exposure.

The Group does not hedge the translation of those profits or losses earned by its non-pound sterling operations. The principal exchange rates which affected the Group, expressed in currency per pound sterling, are shown below.

The table below shows the impact on the Group's 2016/17 results of a 10 cent appreciation, which the Group considers to be an appropriate sensitivity measure, in the dollar and euro in terms of translational exposure.