Full Year Results

* Year ended 31 March 2017 has been restated due to a change in accounting policy to no longer present an exceptional items column and due to NEX Exchange Limited becoming a discontinued operation in the year.

A reconciliation between statutory, trading and one-off items is provided on page 18.

Unless specifically stated otherwise all references are to continuing operations.

Highlights:

- Revenue increased by 9% on both a reported basis and a constant currency basis to £591 million (2016/17: £541 million).

- Trading operating profit decreased by 3% to £147 million (2016/17: £152 million). Trading operating profit excluding one-off items increased by 9% to £160 million (2016/17: £147 million). Operating profit (statutory) decreased by 4% to £147 million (2016/17: £153 million).

- An additional £10 million of annualised cost savings have been identified taking the total annualised savings to £50 million with a cost to deliver of £19 million.

- Trading EPS (basic) is down 4% to 24.2p (2016/17: 25.1p); trading EPS (basic) excluding one-off items is up 11% to 26.8p (2016/17: 24.1p). EPS (basic) (statutory) is up 11% to 29.9p (2016/17 27.0p).

- Final dividend of 7.65p per share recommended (2016/17: 27.0p per share); full-year dividend of 11.15p per share (2016/17: 38.5p per share) is in line with dividend policy of between 40-50% of trading EPS (basic). The dividend will be paid on 27 July 2018 to shareholders on the register at close of business on 6 July 2018, with shares quoted ex-dividend from 5 July 2018.

- NEX shareholders voted in favour of the offer from CME Group Inc (CME) for NEX (the Offer).

Michael Spencer, Group Chief Executive Officer, said: "Over the past year we have seen the continued growth of trading activity in emerging markets, increased demand for regulatory solutions and data analytics from the implementation of MiFID II, and the growing role of non-banks in our client base. In February, financial markets received a long awaited and much welcomed jolt of activity as volatility returned. Whilst it was short lived, the underlying level of market volatility is higher today than it was a year ago due to a sustained shift out of emerging market currencies into the US dollar and we have benefited from this. We had some notable and very hard won developments in the second half of the year. NEX Markets has delivered a 40% margin, NEX Optimisation recovered back to a 28% margin as promised, we saw a rebound in European repo trading and have been achieving continual record trading days in US repo. These are all important developments.

"Last week our shareholders voted overwhelmingly in favour of the acquisition of NEX by CME Group. CME is the best buyer of NEX. Scale matters in this industry and bringing these companies together creates exciting revenue, technology and synergy opportunities. Once complete, this will be a truly industry-defining transaction and one which will bring huge benefits to our clients, the market, and to the City of London through CME's commitment to maintain London as its European headquarters. As Britain continues its path to leave the EU, commitments like this matter".

 Analysts and investors Conference Call:

The call will be hosted by Michael Spencer at 10:00am on Tuesday 22 May 2018Dial in number: +44 (0)20 3003 2701Access Code: 3310400A recording of this call will be available at www.nex.com

ENDS

NEX 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

Presentation of information

This document comprises the results for the year ended 31 March 2018 for NEX Group plc ('NEX' or the 'Company') and its subsidiary undertakings (together 'NEX' or 'the Group'). The financial information set out in this document for the years ended 31 March 2018 and 2017 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 2017 have been delivered to the Registrar of Companies and those for 2018 will be delivered following the Group's Annual General Meeting. The auditors' reports on both the 2018 and 2017 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.

Cautionary statement regarding forward-looking statements

This 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', 'aspires', '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.

Management Report

A reconciliation between statutory amounts and alternative performance measures is provided on page 18.

Financial performance

For the year ended 31 March 2018, the Group reported revenue of £591 million, an increase of 9% on the prior year both on a reported and on a constant currency basis. On a constant currency basis, revenue from NEX Markets was up 6% and from NEX Optimisation up 7%.

During the year, the Group's trading performance benefited from episodic increases in FX volatility, including Asian currency pairs and an increase in trading activity in EU repos. The revenue performance also benefited from progression with the China Foreign Exchange Trade System (CFETS) contract, as well as an increase in demand for post trade services such as risk reduction and regulatory reporting solutions. This was partly offset by a decrease in revenue in some government bonds and a subdued performance in the basis risk mitigation services, Reset, which continues to be affected by low short-dated interest rate volatility in Europe.

The Group reported an operating profit of £147 million, a decrease of 4% on the prior year, and a trading operating profit of £147 million, a decrease of 3% on the prior year. Excluding one-off transformation programme costs in the current year and the one-off items in the prior year, trading operating profit was up £13 million (9%).

The Group's continuing operations reported a profit before tax (PBT) of £125 million (2016/17: £122 million), 2% up on the prior year, and a trading PBT of £127 million (2016/17: £121 million), 5% up on the prior year. Continuing trading EPS (basic) of 24.2p per share (2016/17: 25.1p per share) was down from the prior year as a 5 ppt increase in the trading effective tax rate (ETR) offset the 5% improvement on the trading PBT.

NEX transformation programme

The transformation programme has identified an additional £10 million of annualised cost savings since the first half of the financial year, taking the total to £50 million of annual run rate cost savings as NEX continues to reshape for tomorrow's financial markets and reduce costs. These are being derived from the redesign of operating models in sales, product management, operations, technology and finance as well as the rationalisation of infrastructure across the Group. The total one-off cost to achieve these savings will be approximately £19 million, which will not be treated as an exceptional item. We realised £15 million of these cost saves during the year ended 31 March 2018, with a cost to achieve of £13 million.

NEX Exchange

NEX is in discussions with a number of financial institutions in relation to a transaction for them to invest new funds into NEX Exchange. The new funds would be used to develop the business, and NEX would retain a significant shareholding in NEX Exchange. NEX Exchange is the listing venue for small and medium sized enterprises, originally purchased by the then ICAP plc in June 2012.

Outlook

In the year ahead NEX expects to make progress on its strategy to deliver against its growth objectives and drive operational leverage.

Review of operations

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 bespoke networks connecting participants in financial markets.

For the year ended 31 March 2018, revenue increased by 4% on a reported basis to £326 million (2016/17: £313 million) and by 6% on a constant currency basis. Revenue growth was principally driven by increased trading activity on EBS and progression with the CFETS contract. The trading operating profit increased to £121 million (2016/17: £116 million) and the trading operating profit margin was flat for the year. However, the trading operating profit margin in the second half of the year increased to 40% from 34% in the first half. This was as a result of the positive impact from increased volumes, change in the product mix and cost saves from the transformation programme.

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 2018, revenue was flat on a reported basis at £155 million (2016/17: £155 million) and increased by 1% on a constant currency basis. This performance reflects a 2% increase in US Treasury average daily volume to $168 billion, a 10% increase in US repo to $241 billion and a 28% increase in EU repo to €238 billion.

During the final quarter a combination of an increase in the US federal funds rate, a shift in the US Treasuries yield curve and the expected impact of new tax legislation together resulted in a marked improvement in volatility and trading activity. BrokerTec has augmented its market share in US Treasuries at a time when higher yields are enticing new and former clients onto the platform. Despite competitive pressure from other venues, none of these appear to have gained any significant market share. BrokerTec remains the standard and primary source for trading and reference pricing.

EU repo trading continues to grow with a particularly strong second half of the year. Most international and regional bank clients have seen an increase in available balance sheet and during the past year the client base has steadily increased as more non-core, periphery institutions join the central counterparty and seek access to the sizeable liquidity pool available on BrokerTec. Trading activity in US repo continues to grow with new record days repeatedly recorded.

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 the anonymous and disclosed trading venues give 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 2018, revenue increased by 4% on a reported basis to £151 million (2016/17: £145 million) and by 6% on a constant currency basis and average daily volume increased by 4% to $86 billion. Revenue growth was underpinned by emerging markets currency pairs, whilst revenue trends in G10 currency pairs were strengthened in the final quarter by the return of overall market volatility.

EBS Market, the exchange-like central limit order book, remains the benchmark for the professional FX trading community. It has maintained its position as a primary interbank venue for the trading of the world's most actively traded currency pairs, including euro/dollar and dollar/yen.

During the year, EBS Market continued to develop and create liquidity in NDFs with average daily volume growing by more than 25% compared with last year. This was in part driven by the addition of non-bank participants to the NDF product offering. Volumes grew across most NDF pairs, in particular dollar/won and dollar/rupee.

NEX Markets continued to innovate throughout the year. NEX Quant Analytics, the FX market's most comprehensive community-based analytics tool for clients trading on the EBS platform, was launched in September. Using benchmark data taken from the entire EBS ecosystem, the analytics service delivers real and measurable insight for clients into their own trading activities and the ability to look at their performance versus that of their peers. New Aggregation Logic (NAL) was initially introduced across Europe and is now set for a full global roll-out over the coming months. NAL aims to increase the experience of executing on EBS Direct for both liquidity providers and consumers by improving both pricing and certainty of execution for larger order sizes.

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 50 liquidity providers and 400 liquidity consumers using the service. FX forwards also continue to grow, with a 100% increase in average daily volume over the prior period and more than $10 billion traded daily.

EBS eFix, the matching service that enables clients to execute Fix interest electronically on the EBS Market platform, has continued to deliver significant growth. Average daily volume increased by more than 25% over the year to more than $2 billion matched per day.

CFETS contract

In February 2018, CFETS launched CFETS FX2017, a next-generation trading platform for the renminbi FX market powered by NEX. It was a significant launch as it supported the evolution of the domestic renminbi FX market. NEX Markets has been able to leverage its trading technology expertise to develop FX2017 jointly with CFETS. As a result, the Chinese FX market now has access to multiple execution options in a robust and low-latency environment. The launch of this new central limit order book platform in mainland China will play a fundamental role in providing a public reference point for spot CNY pricing in the domestic FX market. The original CFETS contract has been amended to allow for a change in scope of the delivery and an extension of maintenance payments until 2022.

NEX Optimisation

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

NEX Optimisation has reshaped its organisational structure during the year. The primary focus was to organise the business in a way that clients want to consume its services, matching the way they think about their financial, regulatory and operational challenges. This has been achieved by restructuring NEX Optimisation's legal entities and products to five business areas which resonate with clients: trade and portfolio management, financial resource optimisation, data insights, analytics, and regulatory reporting.

*Restated due to the change in presentation of NEX Optimisation results to business areas

For the year ended 31 March 2018, revenue increased by 8% on a reported basis to £260 million (2016/17: £240 million) and by 7% on a constant currency basis, driven by increased demand for compression, reconciliation and regulatory reporting solutions. The trading operating profit fell to £64 million (2016/17: £72 million) and the trading operating profit margin reduced by 5 ppt to 25% for the year. Following the deterioration in the trading operating profit margin in the first half of the year, swift action was taken to ensure a significant improvement in the division's ongoing profitability and the trading operating profit margin recovered from 21% in the first half of the year to 28% in the second half. As a result, NEX Optimisation expects to reach its operating profit margin aspiration of more than 40% by the end of the year ending 31 March 2021, a year later than planned.

Trade and portfolio management

Trade and portfolio management comprises portfolio and margin reconciliation via triResolve and triResolve Margin, and monitoring pre trade risk and automating post trade processing of financial transactions via Traiana.

For the year ended 31 March 2018, revenue increased by 5% on a reported basis to £102 million (2016/17: £97 million) and by 3% on a constant currency basis. Revenue growth was driven by triResolve and triResolve Margin, which automates the reconciliation of swap portfolios and calculates the variation margin allowing clients to meet the new regulatory requirements which took effect in March 2017. There are now 2,130 institutions using triResolve compared with 1,900 at the end of the prior year and more than 115 clients have signed up to triResolve Margin. Additional asset classes such as FX forwards and swaps have been mandated for bilateral margining in early 2018.

Traiana solutions have become the market standard for post trade processing of FX, exchange-traded derivatives, fixed income, Credit Default Swaps (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. New pricing structures which incentivise long-term client contracts are driving client retention and are core to the overall growth strategy.

Financial resource optimisation

Financial resource optimisation comprises portfolio compression via triReduce and basis risk mitigation via Reset as well as portfolio balancing via triBalance and derivative pricing and risk analytics via triCalculate, which currently has significantly lower revenue but materially higher growth potential.

For the year ended 31 March 2018, revenue increased by 8% on a reported basis to £91 million (2016/17: £84 million) and by 6% on a constant currency basis. The stringent leverage ratio included within the Basel III rules continues to drive demand from banks for the compression service triReduce. During the year, the compression service terminated $226 trillion of gross notional outstanding (2016/17: $191 trillion). Since launch, more than 260 financial institutions have participated in eliminating $1.2 quadrillion in total notional outstanding from the Over The Counter (OTC) derivatives market. triReduce continues to innovate and expand its product and market coverage. In April 2018, triReduce announced that four major clients have taken advantage of its new trade revision functionality. Trade revision is the latest evolution in triReduce's multilateral portfolio compression methodology. It enables clients to modify key economic parameters of their cleared OTC trades to improve their compression results. This additional flexibility provides a major step change in compression potential as it dramatically increases the compression efficiency.

The basis risk mitigation service, Reset, continues to be affected by low short-dated interest rate volatility in Europe. However, the recent uptick in volatility resulted in improved performance for Reset in the final quarter.

Data insights

Data insights delivers independent market intelligence and pricing information for OTC data to financial market participants using intelligence from NEX Markets, NEX Optimisation and third-party joint ventures.

For the year ended 31 March 2018, revenue was flat on a reported basis at £48 million (2016/17: £48 million) and increased 2% on a constant currency basis, driven by the launch of new pricing and analytics products and electronic transaction-backed indices.

The increased demand for transparency in the FX market and for data sourced from actual transactions and orders fuelled a collaboration of NEX Markets' EBS data with data insights' technical expertise to create EBS FX Benchmarks, a series of 30-minute transaction-backed FX fixings for 15 major currency pairs.

In February 2018, NEX Data was approved as one of the first Benchmark Administrators under the EU Benchmarks Regulation (BMR). The RepoFunds Rate suite of daily benchmarks for the euro, Italy, Germany, France, Spain, The Netherlands and Belgium will now fall under the BMR.

Analytics

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.

For the year ended 31 March 2018, revenue increased by 11 % on both a reported basis and constant currency basis to £10 million (2016/17: £9 million).

Regulatory reporting

Regulatory reporting comprises end-to-end multi-regime reporting, data normalisation, enrichment, validation and cross-jurisdictional matching. The service acts as a reporting hub for European Market Infrastructure Regulation (EMIR) and as an Approved Reporting Mechanism (ARM) for the Markets in Financial Instruments Directive (MiFID).

For the year ended 31 March 2018, revenue increased by more than 300% on both a reported basis and constant currency basis to £9 million (2016/17: £2 million). Revenue growth was driven by Abide Financial, acquired in October 2016, which provides regulatory reporting solutions for MiFID II which came into force in January 2018. In addition, Abide also provides regulatory reporting solutions for EMIR and other regulatory regimes.

On 24 November 2017, NEX received approval from the European Securities and Markets Authority (ESMA) for its Swedish-based trade repository under EMIR. The approval allows NEX Regulatory Reporting to operate a trade repository for European derivatives trades.

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. Since its launch, NEX Opportunities has invested in 11 portfolio companies, two of which have subsequently been acquired by NEX.

Financial review

Summary consolidated income statement

* The consolidated income statement for the year ended 31 March 2017 has been restated due to a change in accounting policy to no longer present an 'exceptional items' column and due to NEX Exchange Limited becoming a discontinued operation.

The financial review first focuses on the trading performance of the Group and then discusses acquisitions, disposals and similar items, which is the reconciling item between trading and statutory amounts. A reconciliation between statutory amounts and alternative performance measures is provided on page 18.

Continuing operations

Trading revenue

Trading revenue was £591 million, which is £50 million (9%) up on the prior year. Revenue benefited primarily from new businesses, the CFETS contract and £nil hedging impact in the current year compared with a £17 million hedging loss in the prior year.

Trading operating profit

The Group reported a £5 million (3%) decrease in trading operating profit. The trading operating profit of £147 million includes one-off items totalling £13 million expense. The trading operating profit for the prior year of £152 million included a net £5 million income that was one-off in nature and was presented as exceptional items in the prior year. Excluding one-off items, the trading operating profit was up £13 million (9%) on the prior year. This includes a net £16 million year-on-year favourable movement from hedging.

Trading profit before tax

Trading profit before tax was £6 million (5%) up on the prior year. There was a £7 million favourable movement in trading net finance cost driven by reduced drawings on the revolving credit facility (RCF), reduced facility fees and an increase in finance income. Excluding the year-on-year adverse impact of £18 million from one-off items, the trading profit before tax is up £24 million (21%) on the prior year.

Tax on trading profit

The Group's tax charge of £36 million on trading profit before tax represents an ETR of 28% (2016/17: 23%). The increase primarily relates to discrete prior year items, a one-off deemed repatriation charge following the commencement of the US tax reform and increased taxable profits following recent changes to UK tax legislation that restrict the deduction of certain interest payments.

Acquisitions, disposals and similar items

Acquisitions, disposals and similar items from continuing operations was a net £2 million expense (2016/17: £1 million income) before a tax credit of £23 million (2016/17: £6 million tax credit). The net £2 million expense before tax credit is a finance cost relating to the unwind of deferred and contingent consideration on various acquisitions.

There was £15 million of operating expenses which were offset by £15 million of other income. The £15 million of operating expenses include an £8 million impairment charge in relation to joint ventures and available-for-sale investments, a £3 million amortisation charge for intangible assets arising on consolidation and £4 million other acquisition and disposal-related costs. The £15 million of other income comprises a release of contingent consideration in relation to various past acquisitions. The majority of the release relates to Abide Financial due to the buy-out of certain non-controlling interests during the year.

Profit for the year (statutory) and EPS (basic) (statutory)

Profit for the year (statutory) is £112 million (2016/17: £100 million) and EPS (basic) (statutory) is 29.9p (2016/17: 27.0p). The £12 million increase in profit for the year (statutory) is driven by a combination of factors including the £15 million release of contingent consideration, £9 million decrease in the tax charge, £5 million favourable movement from net finance expenses and £4 million favourable movement from profit from associates and joint ventures, partially offset by the £18 million year-on-year adverse impact from one-off items.

Discontinued operations

Trading

Discontinued operations include trading revenue of £1 million (2016/17: £589 million), trading operating loss of £2 million (2016/17: £83 million profit) and trading loss for the year of £2 million (2016/17: £71 million profit). The current year discontinued operations relate to the results of NEX Exchange Limited which became a discontinued operation during the year (note 3).

Acquisitions, disposals and similar items

Acquisitions, disposals and similar items from discontinued operations resulted in an income of £3 million (2016/17: £1,133 million income) before a tax of £nil (2016/17: £7 million tax credit). The current year acquisitions, disposals and similar items from discontinued operations include a £3 million discounting of a receivable balance and £4 million adjustment to the carrying value of intangible assets arising from development expenditure and property and equipment, both of which were related to ICAP plc's global hybrid voice broking and information business (IGBB). This was partially offset by the £3 million release of an unutilised provision held at 31 March 2017 which related to transaction costs for the sale of IGBB.

Group

Dividend

In May 2017, NEX stated its dividend policy under which the dividend for the year ended 31 March 2018 would be between 40% and 50% of the post-tax trading profit for the year ended 31 March 2018, with a progressive dividend thereafter.

The directors recommend a final dividend of 7.65p per share (2016/17: 27.0p). The prior year final dividend reflects that of the Group including nine months of IGBB. If approved, the final dividend will be paid on 27 July 2018 to shareholders on the register at the close of business on 6 July 2018. The shares will be quoted ex-dividend from 5 July 2018.

The full-year dividend will be 11.15p per share (2016/17: 38.5p), including the interim dividend of 3.5p per share (2016/17: 11.5p). The full-year dividend per share is covered 2.1 times (2016/17: 1.2 times) by trading EPS (basic) from continuing and discontinued operations of 23.7p per share (2016/17: trading EPS (basic) of 44.5p per share).

Restatement

The consolidated balance sheet as at 31 March 2017 has been restated due to the recognition of cash held in the employee share trust of £32 million and the reclassification of a £30 million balance from current other receivables to non-current other receivables.

Trading free cash flow

* Trading free cash flow conversion the year ended 31 March 2017 has been restated due to the change in accounting policy to no longer present an 'exceptional items' column. Trading free cash flow includes discontinued operations.

During the period, the Group had trading free cash flow of £20 million (2016/17: £188 million), resulting in a trading cash flow conversion of 22% (2016/17: 115%). Prior year trading free cash flow represents that of the Group at that time including IGBB and included a net £47 million favourable working capital movement. The current year cash flow includes a net £35 million adverse working capital movement, primarily driven by the timing of receipts of revenue from the CFETS contract where there were receipts during the year ended 31 March 2017 and in April 2018. Excluding the adverse impact from working capital movements and timing of tax and interest payments, which are all expected to normalise, the trading free cash flow was £60 million with a trading free cash flow conversion of 67%.

In November 2017, we guided to a trading free cash flow conversion of around 60% for the full year, which is lower than the medium term range of 80% to 90% due to the excess in planned capital expenditure over amortisation and depreciation. In line with that expectation, our capital expenditure for the year ended 31 March 2018 was £88 million compared with amortisation and depreciation charges of £52 million.

We expect the capital expenditure for the year ending 31 March 2019 to increase further from the current level as we move into our new London office, the Fruit and Wool Exchange, and Infinity investment continues into the next year. We expect the trading free cash flow conversion for the year ending 31 March 2019 to be around 60%, in line with the previous guidance, as the adverse impact from increased capital expenditure is expected to be offset by the reversal of the working capital timing differences as at 31 March 2018.

We expect that by the end of the year ending 31 March 2020 the amortisation and depreciation charges and capital expenditure will converge. At that point and over the medium term, we expect the trading free cash conversion to be in the range of 80% to 90%.

Balance sheet highlights

The Group's net assets at 31 March 2018 were £905 million (2016/17: £1,011 million), principally reflecting a £104 million loss from the retranslation of foreign currency net assets, largely driven by goodwill, and the £101 million payment of the 2016/17 final dividend and the £13 million payment of the 2017/18 interim dividend. This was partially offset by the profit for the period (statutory) from continuing and discontinued operations of £113 million.

* The balance sheet for the year ended 31 March 2017 has been restated due to recognition of cash held in an employee share trust.

Intangible assets arising on consolidation

The Group's goodwill and other intangible assets arising from consolidation as at 31 March 2018 were £936 million (2016/17: £1,026 million). The decrease mainly resulted from the appreciation of pound sterling against the dollar.

Management reviewed the Group's goodwill and other intangibles assets arising on consolidation for impairment as at 31 March 2018 and concluded that there was no impairment at the date (2016/17: no impairment). The review was based on certain estimates and assumptions, including future cash flow projections and discount rates. The estimates are most sensitive in relation to ENSO goodwill and other intangible assets arising on consolidation, the total of which is £82 million (2016/17: £95 million), due to the early stage nature of the business. For ENSO, the WACC rate is 8.1% and the cash flow projections in the final year of the three-year cash flow projections used for the impairment review would need to be adverse by more than 33% in order to lead to an impairment. The Audit Committee challenged management's judgments and estimates and has approved the appropriateness of management assumptions and conclusions.

Liquidity and funding

The Group's overall funding position remains strong. As at 31 March 2018, the Group had committed undrawn headroom under its core credit facilities of £350 million (2016/17: £300 million).

The gross debt position increased by £4 million to £511 million as at 31 March 2018. The increase relates to foreign exchange movements and the amortisation of the costs related to the issuance of debt.

As at 31 March 2018, the Group's long-term issuer ratings were Baa3 by Moody's and BBB by Fitch. Following the announcement of the Offer, both agencies have placed the Group on review for a potential upgrade.

* Total cash for the year ended 31 March 2017 has been restated due to recognition of cash held in an employee share trust.

** Cash comprises cash and cash equivalents of £270 million (2016/17: £321 million), restricted funds of £18 million (2016/17: £103 million) and cash held in the employee share trust of £20 million (2016/17: £32 million). All restricted funds are held in regulated trading entities. Total cash excludes cash held within held-for-sale assets of £5 million (2016/17: £nil).

Net debt

Net debt including restricted funds (excluding cash held in the employee share trust) increased by £135 million in the year to £218 million as at 31 March 2018. The primary driver behind the increase in net debt position is the payment of £101 million in July 2017 of the final dividend and payment of £13 million in February 2018 of the interim dividend.

* Net debt including restricted funds includes borrowings of £511 million (2016/17: £507 million), cash and cash equivalents from continuing operations of £270 million (2016/17: £321 million), cash and cash equivalents included within held-for-sale assets of £5 million (2016/17: £nil) and restricted funds of £18 million (2016/17: £103 million)

Finance transformation

As part of the Group's overall transformation program we have created a new finance target operating model. This is designed to create a more efficient and effective centralised finance function, to enhance control and help drive the business towards its strategic priorities. An important aspect of this is improving the use of technology and clarifying roles and responsibilities to provide a finance function appropriate for NEX.

Alternative performance measures

In reporting financial information, NEX presents Alternative Performance Measures (APMs) that are not defined or specified under the requirements of International Financial Reporting Standards (IFRS). NEX believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the business.

Trading

The definition of trading amounts is statutory amounts before 'acquisitions, disposals and similar items'. The definition of 'acquisitions, disposals and similar items' is provided in the basis of preparation. Trading profit is the profit measure used to calculate trading EPS (note 4) and is the key indication of the Group's ability to pay dividends and finance future growth. The board and management use trading measures for planning and reporting purposes and a subset of those measures is also used by the remuneration committee and management in setting director and management remuneration.

Trading amounts and statutory amounts for each financial statement line item are presented on the face of the consolidated income statement. The reconciling item between trading amounts and statutory amounts is the 'acquisitions, disposals and similar items' column. We consider the prominence of this reconciliation on the primary financial statement to be helpful to users of the financial statements. A breakdown of 'acquisitions, disposals and similar items' for all relevant financial statement line items is provided in the table below.

Before one-off items

NEX excludes certain material one-off items because, if included, these items could distort the understanding of our performance for the year and the comparability between periods. The directors believe that providing amounts before one-off items assists in providing additional useful information on the underlying trends, performance and position of the Group. This measure is also used in discussions with the investment analyst community. One-off items relate to one-off costs of transformation and one-off legacy items.

The reconciling items between financial statement line items before one-off items and trading financial statement line items are one-off items. A breakdown of one-off items for all relevant financial statement line items is provided in the table below.

We expect £6 million of one-off costs of transformation to be incurred in the year ending 31 March 2019 based on our annualised cost savings of £50 million.

Constant currency

Constant currency is calculated by applying the current period foreign exchange rate to prior year amounts in foreign currencies. This provides users with an analysis of the movement in the underlying performance of the Group, excluding translational effects from changes in foreign exchange rates.

The reconciling item between amounts under IFRS and amounts under constant currency in all cases is foreign exchange.

Trading free cash flow

Trading free cash flow is an APM used by management and investors. It is the cash amount that NEX is able to generate after spending the money required for capital expenditure and dividends to associates, joint ventures and investments. It is useful because it represents the cash that is available to NEX for pursuing opportunities that enhance shareholder value, such as developing new products, making acquisitions, paying dividends and reducing debt.

The calculation of trading free cash flow is provided in on page 14. 'Cash generated by operations before one-off items and timing differences on unsettled matched principal trades' and 'interest and tax' are from the 'reconciliation of Group profit before tax to net cash flow from operating activities' (note 7). 'Capital expenditure' and 'dividends from associates, joint ventures and investments' are from the consolidated statement of cash flow.

Consolidated income statement

The consolidated income statement for the year ended 31 March 2017 has been restated due to a change in accounting policy to no longer present an 'exceptional items' column and due to NEX Exchange Limited becoming a discontinued operation in the year.

Consolidated statement of comprehensive income

Consolidated and Company balance sheet

The consolidated balance sheet for the year ended 31 March 2017 has been restated due to recognition of cash held in an employee share trust and due to a reclassification of a current other receivable to a non-current other receivable. The company balance sheet for the year ended 31 March 2017 has been restated due to the recognition of an amount due from the employee share trust and amount due to a subsidiary. There is no impact on any financial statement line items as at 1 April 2016.

The Company reported a loss for the year ended 31 March 2018 of £4 million (2016/17: £1,238 million profit).

The financial statements and accompanying notes were approved by the board on 22 May 2018 and signed on its behalf by:

Samantha Wren

Group Chief Financial Officer and Chief Operating Officer

Consolidated statement of changes in equity

The consolidated statement of changes in equity for the year ended 31 March 2017 has been restated due to recognition of cash held in an employee share trust.

Company statement of changes in equity

Consolidated and Company statement of cash flow

* Net cash and cash equivalents comprises cash and cash equivalents from continuing operations of £270 million (2016/17: £321 million), cash and cash equivalents held within held-for-sale assets of £5 million (2016/17: £nil) and overdrafts of £nil (2016/17: £nil). 

The consolidated cash flow statement for the year ended 31 March 2017 has been restated to include restricted funds in investing activities instead of financing activities. Restricted funds comprise cash held at a central counterparty (CCP) clearing house or a financial institution providing NEX with access to a CCP (note 7).

Cash flows of discontinued operations

Cash outflows from operating activities of £13 million (2016/17: £141 million), cashflows from investing activities of £nil (2016/17: £13 million) and cashflows from financing activities of £nil (2016/17: £1 million) were incurred relating to discontinued operations. Cash outflows of £13 million from operating activities comprised £10 million in relation to the settlement of certain provisions and accruals that existed as at 31 March 2017 in connection with the IGBB disposal and £3 million net cash outflow from the operating activities of NEX Exchange Limited.

Basis of preparation

Preparation of financial statements

The consolidated financial statements of the Group and the separate financial statements of the Company (together the Financial Statements) have been prepared in accordance with IFRS, as issued by the International Accounting Standards Body (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 separate financial statements of the Company here together with the consolidated financial statements of the Group, the Company has taken advantage of the exemption in section 408(3) of the Companies Act 2006 to not present its individual income statement, individual statement of comprehensive income and the related notes. The Financial Statements are presented in pound sterling, which is the functional currency of the Company and presented in millions.

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

Judgments and estimates

Following the guidance provided by the FRC in 'Corporate Reporting Thematic Review: Judgments and Estimates, November 2017', management reassessed the critical judgments and estimates and resolved that the following were no longer considered critical: investment in joint ventures; investments in associates; the presentation of exceptional items; and the stage of completion of technology development revenue.

Investment in joint ventures and investments in associates are no longer considered a critical judgment because management does not believe that the judgments involved have materially affected the reported numbers. Presentation of exceptional items is no longer considered a critical judgment because there has been a change in accounting policy to no longer present an 'exceptional items' column. The stage of completion of technology development revenue is no longer considered a critical estimate because management does not believe that there is a significant risk that there will be a material adjustment required in the following period as a result of changes to the estimate of the stage of completion because the technology development stage of the CFETS contract is now almost complete.

Judgments (not involving estimation): Management considers the following items to be critical judgments (apart from those involving estimations) that were made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

Estimates: Management considers the following items to involve key assumptions concerning the future, or other key sources of estimation uncertainty, in the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Estimates and assumptions are periodically 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.

Discontinued operations

Disposal groups (including both the assets and liabilities of the disposal groups) are classified as held-for-sale when their carrying amounts will be recovered principally through sale, they are available for sale in their present condition and their sale is highly probable. Disposal groups are measured at the lower of their carrying amount and fair value less cost to sell, except for those assets and liabilities that are not within the scope of the measurement requirements of IFRS 5 'Non-current assets held-for-sale and discontinued operations'. Immediately before the initial classification as held-for-sale, the carrying amounts of the assets and liabilities in the disposal group are measured in accordance with the applicable IFRS.

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.

On 30 December 2016, the Group completed the disposal of IGBB to TP ICAP plc (TP ICAP). The results of the IGBB business were presented as discontinued operations in the consolidated income statement for the year ended 31 March 2017 as the sale was a single co-ordinated plan to dispose of a separate major line of business. Within the notes to the financial statements, disclosures for the year ended 31 March 2017 are presented on a continuing operations basis, where possible, to provide a more meaningful comparative to the disclosures for the year ended 31 March 2018.

NEX Exchange Limited became a discontinued operation during the year ended 31 March 2018 (note 3).

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 separately from acquisitions, disposals and similar items. Trading profit is the profit measure used to calculate trading EPS (note 4) and is the key indication of the Group's ability to pay dividends and finance future growth. The board and management use trading measures for planning and reporting purposes and a subset of those measures are also used by the remuneration committee and management in setting director and management remuneration. Trading figures are reconciled to statutory figures on the face of the consolidated income statement.

The column 'acquisitions, disposals and similar items' includes items that are not part of the organic growth activities of the business and therefore are shown separately from the trading items so that the underlying performance of the Group can be separately monitored. The column 'acquisitions, disposals and similar items' includes: any gains, losses or other associated costs on the full or partial disposal of available-for-sale investments, associates, joint ventures or subsidiaries; 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 contingent consideration which has been classified as a liability; any gains or losses on the revaluation of previous interests; impairment of investments in joint ventures, associates and available-for-sale investments; 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.

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.

Foreign currencies

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group company are expressed in pound sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the prior month closing exchange rate. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised in profit or loss in the period in which they arise except for exchange differences on transactions entered into to hedge certain foreign currency risks.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period where these approximate to the rate at the date of the transactions. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a separate component of equity, attributed to non-controlling interests as appropriate.

On the disposal of a foreign operation, all of the exchange differences accumulated in a separate component of equity in respect of that operation attributable to the owners of the company are reclassified to profit or loss. In relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. The group has elected to treat goodwill and fair value adjustments arising on acquisitions before the date of transition to IFRS as sterling-denominated assets and liabilities. Exchange differences arising are recognised in other comprehensive income.

Future accounting developments

(a) New standards, amendments and interpretations adopted

No new standards, amendments or interpretations, effective for the first time for the year ended 31 March 2018, have had a material impact on the Group or Company. The additional disclosures introduced by the amendments to IAS 7 'Statement of cash flows' are provided in note 7.

(b) New standards, amendments and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2018, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the Group or Company, except as set out below.

IFRS 9

In July 2014, the IASB issued IFRS 9 'Financial Instruments', which will replace IAS 39 'Financial Instruments: Recognition and Measurement'. IFRS 9 is effective for accounting periods beginning on or after 1 January 2018. NEX will adopt IFRS 9 for its financial statements for the year ending 31 March 2019.

IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost; fair value through other comprehensive income; and fair value through profit or loss. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in other comprehensive income, not recycling. For financial liabilities, there are no changes to classification and measurement, except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. For equity investments currently accounted for as available-for-sale investments, NEX plans to take the irrevocable option at inception to present the changes in fair value in other comprehensive income. NEX does not expect any other significant impact in relation to classification and measurement.

An expected credit losses model replaces the incurred loss impairment model used in IAS 39. NEX expects a significant change to the process and methodology applied for estimating impairment but for there to be no material impact to the amount calculated and recognised in the financial statements.

IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright-line hedge effectiveness tests. To qualify for hedge accounting, it requires an economic relationship between the hedged item and hedging instrument, and for the 'hedged ratio' to be the same as the one that management actually uses for risk management purposes. Contemporaneous documentation is still required, but it is different from that currently prepared under IAS 39. There is an accounting policy choice to continue to account for all hedges under IAS 39. NEX plans to take the accounting policy choice to continue to account for all hedges under IAS 39.

NEX does not expect to restate comparatives on initial application of IFRS 9 on 1 April 2018 but will provide detailed transitional disclosures in accordance with the amendment requirements of IFRS 7. No material impact on transition or on profit for future periods is expected.

IFRS 15

In May 2014, the IASB issued IFRS 15 'Revenue from Contracts with Customers', which will replace IAS 18 'Revenue' and IAS 11 'Construction Contracts' and other related interpretations on revenue recognition. The standard will become effective for annual periods beginning on or after 1 January 2018. NEX will adopt IFRS 15 for its financial statements for the year ending 31 March 2019.

IFRS 15, 'Revenue from Contracts with Customers', deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with clients. Revenue is recognised when a client obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. Variable consideration is included in the transaction price if it is highly probable that there will be no significant reversal of the cumulative revenue recognised when the uncertainty is resolved.

For subscriptions where variable consideration is provided that spans reporting periods, under the existing accounting policy, revenue is recognised when the amounts can be reliably measured whereas under IFRS 15, revenue is recognised using the expected value or most likely amount method at the point it is considered highly probable there will be no significant reversal. NEX expects there to be a change in the methodology for accounting for variable consideration but for there to be no material impact to the amount calculated and recognised in the financial statements.

NEX plans to take the modified retrospective transition option and to apply the practical expedients for significant financing component and incremental costs of obtaining a contract. No material impact on transition or on profit for future periods is expected.

IFRS 16

In January 2016, the IASB issued IFRS 16 'Leases', which will replace IAS 17 'Leases' and other related interpretations on leases. The standard is effective for annual periods beginning on or after 1 January 2019. NEX intends to adopt IFRS 16 for its financial statements for the year ending 31 March 2020.

IFRS 16, 'Leases', addresses the definition of a lease, recognition and measurement of leases, and it establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising from IFRS 16 is that for lessees, leases previously classified as operating leases will be accounted for on the balance sheet. The present value of future lease payments will be recognised as a liability with a related asset being depreciated.

NEX expects that the main impact will be the accounting treatment of office rentals which are currently accounted for as operating leases and under IFRS 16 will lead to an increase in property and equipment, together with an additional lease liability. In 2017 NEX signed a 15-year lease for an office in New York and a 20-year lease for an office in London and therefore the impact will be larger than if NEX was closer to the end of its office leases. The operating lease expense will be replaced by a depreciation and interest expense.

NEX has not completed its IFRS 16 impact assessment. The impact on NEX financial statements from the adoption of IFRS 16 will be disclosed closer to the date of 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). NEX has two reportable segments: NEX Markets and NEX Optimisation. NEX also presents a 'NEX Group and other' column which includes the Group's remaining activities that do not meet the definition of reportable segments. The 'NEX Group and other' column includes the activities of Shipping companies, NEX Exchange Limited, NEX Opportunities, certain joint venture and associate investments and Group costs.

NEX Opportunities moved from the 'NEX Optimisation' operating segment to the 'NEX Group and other' column in the management accounts during the year ended 31 March 2018. Segmental information for the year ended 31 March 2018 has incorporated this change in order to be consistent with the management accounts and segmental information for the year ended 31 March 2017 has been restated to make the comparative comparable.

Segmental information required by IFRS 8 'Operating Segments' that is not included in this note is excluded because the segmental information is not included in the management information reported to the Company's board and the cost to develop it would be excessive.

(a) Nature of services

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 trading volumes. The Group also charges access 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 using the most appropriate method for each contract.

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: The Group provides risk mitigation solutions for OTC derivatives, primarily through the elimination and reconciliation of outstanding transactions.

Traiana: The Group operates market infrastructure for pre- and post-trade processing, risk management and regulatory compliance across multiple asset classes.

NEX Data: The Group 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: The Group is a provider of risk mitigation services, reducing basis risk within trading portfolios in interest rate, FX, equity index and inflation derivatives.

ENSO: The Group 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: The Group provides regulatory reporting technology, supporting market participants with evolving compliance reporting obligations. Abide Financial acts as a reporting hub for EMIR, Approved Reporting Mechanism for MiFID and a Regulatory Reporting Mechanism for Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).

(b) Segmental results

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

** Given 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 and amortisation, depreciation and impairment charges.

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

** Given 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 and amortisation, depreciation and impairment charges.

For reconciliation of alternative performance measures, see page 18.

Segmental information for the year ended 31 March 2017 has been restated due to a change in operating segments for the NEX Optimisation division and operating expenses hedging impact.

(c) Revenue information

The hedging impact relates primarily to NEX Markets.

The Group did not earn more than 10% of its total revenue from any individual client (2016/17: did not). The Group earned revenue of £109 million (2016/17: £55 million) from entities in the UK, £199 million (2016/17: £221 million) from entities in the US, £102 million (2016/17: £86 million) from entities in Sweden, £36 million (2016/17: £38 million) from entities in Singapore and £145 million from entities in other countries (2016/17: £141 million). NEX regulated companies will meet Capital Requirements Directive (CRD) IV disclosure requirements, to the extent in scope, by disclosing the information in their 2017/18 financial statements or on the NEX website.

Revenue from the rendering of services recognised in the year was £571 million (2016/17: £528 million). Revenue from technology development recognised in the year was £20 million (2016/17: £13 million). The Group used the costs-incurred method to estimate the stage of completion of technology development revenue.

2. Operating expenses

(a) Trading operating expenses and operating expenses