The London Stock Exchange, Europe's largest share trading market, bumped up its annual dividend by 50 per cent to 18p a share after operating profits more than doubled to £174.2 million.

The exchange, fresh from fighting off four takeover assaults in two years, described its full-year trading performance as "outstanding" and declared its intention to remain at the heart of the push to consolidate international stock and derivative exchanges.

Clara Furse, having rebuffed bidders which have included Macquarie Bank of Australia and Nasdaq of the US, said: "We are confident of delivering another year of strong growth, as we continue to evaluate opportunities for strategic development to realise in full our vision to be the world's capital market."

She added: "We continue to explore all routes to growth in addition to our organic route."

Ms Furse said that the LSE's performance last year had been strong across all business areas, but acknowledged that in a fiercely competitive market margins were falling for SETS, the electronic trading platform. She said that the exchange was deliberately sacrificing short-term profits for long-term volume growth.

"This is a good thing," she said.

Michael Long, analyst at Keefe, Bruyette & Woods, said he thought average revenues per trade were falling faster than expected on the LSE, down this year from £1.52 to £1.32.

"We believe this is likely to continue to decline [this year] due to the new pricing tariffs and the lower average size of trades," Mr Long said.

The LSE's revenues before exceptional items were up a fifth at £349.6 million as London remained an attractive location for international companies to list their shares and raise equity capital.

The UK is currently seen as being ahead of New York as the world's financial centre.

The exchange said that primary market listings had been "very strong", with 503 new issues and a record £53.7 billion of capital raised over the past 12 months. Daily trading volumes on its SETS electronic platform also surged, up 38 per cent to £6.5 billion, with terminals in use rising to a record 116,000.

Ms Furse boasted that, in terms of capital raised on its exchange, the LSE was the best worldwide, topping the New York Stock Exchange and Nasdaq combined.

However, the LSE is under increasing pressure from both new and forthcoming rivals, determined to take share trading liquidity away from the exchange and able to do so under new rules governing dislosure of share trades.

They include Project Turquoise, a consortium of seven global investment banks that has already appointed a provider of post-trade services but is yet to decide what trading technology to use or hire a chairman or chief executive.

Plus Markets is a domestic start-up that is already up-and-running and expects to be able to trade about 3,000 stocks by the end of the year.

And the LSE faces pressure from Project Boat, also set up by investment banks, which plans to offer competing services in trade reporting.

Shares in the LSE closed last night at £12.92, valuing it at £2.6 billion and underscoring how far it has moved since most recently attracting the takeover intentions of Germany's Deutsche Börse just before Christmas 2004. The approach from the German exchange, a repeat of its assault four years previously, valued the exchange at £1.3 billion.

At the time, the exchange was thought to be gunning for a value of £7 a share.

Today, having also attracted the attentions of Euronext, now merged with the NYSE, the LSE has continued to claim that it is able to operate independently while at the same time taking an active part in exchange mergers. Its shares traded flat to last night's close.

It has also returned £512 million of capital to shareholders.

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