The London Stock Exchange (LSE) posted a 56% rise in annual operating profits but its shares promptly fell almost 5% as investors fretted it would not be able to sustain its growth amid intense competition.

The London Stock Exchange (LSE) posted a 56% rise in annual operating profits but its shares promptly fell almost 5% as investors fretted it would not be able to sustain its growth amid intense competition.

The Exchange's shares have had a torrid 2008, losing almost half their value as the market worries it could lose business to new rivals, including the long-touted Turquoise which is backed by investment bank Goldman Sachs.

The LSE's shares dropped as much as 7.73% yesterday, eventually closing down 50p, or 4.6%, at 1038p.

Its chairman, Chris Gibson-Smith, said: "This has been another year of considerable achievement from both a financial and a strategic perspective."

Revenue was up 56% to £546m in the year ended March 31, 2008, while adjusted operating profit rose the same amount to £289m.

Clara Furse, chief executive of the Exchange, said every division had recorded strong growth "despite more testing conditions towards the end of the year".

The company added that it expected its merger with Borsa Italia to deliver around half of the expected £40m of synergies this year.

The company is proposing a final dividend of 16p to be paid on August 11.

This means the total pay-out for the year has risen 33% to 24p.