Reuters is reporting an eight per cent decline in group revenues for the quarter ending September 30 2003, but the firm has posted better-than-expected recurring revenues and has managed to reduce subscription cancellations.
Recurring revenue from subscription products - which represents 93% of the Reuters' core revenue - was £609 million for Q3 2003, a fall of 10.9% compared to a year earlier but slightly better than the firm's own forecasts of 11-12%.
Reuters says Q3 net cancellations - new sales minus cancellations - fell to the lowest level since Q1 2002.
Reuters' core business generated revenues of £658m in the three months to the end of September, 12% down on last year. Group revenue, which includes joint ventures, fell to £789 million for the quarter, compared to £855 million a year ago.
Tom Glocer, Reuters CEO, told press that business in the US and Asia had turned the corner and there were positive signs in Europe - which accounted for almost half of core revenues last year. But he added:" I don't yet see enough of real evidence in the sales figures to say that we have turned the corner in Europe."
Glocer says the group expects the full year decline in recurring revenue to be 11% or slightly better.
Reuters reported its biggest ever loss in February this year and implemented a 'five point plan' that will result in annualised cost savings of £440 million by 2006.
The firm recently reduced its stake in business integration software subsidiary Tibco and is looking for buyers for its subsidiaries, TowerGroup and Yankee Group. The company also sold its historic Fleet Street headquarters, saying it will move the majority of London staff to a single building in Canary Wharf to reduce costs.
Furthermore, according to press reports, Reuters has started shifting jobs to cheaper countries in Asia. In August the BBC reported that Reuters is moving its market data content division to India and most recently, the FT reported Reuter's will cut several hundred jobs as a result of transferring its software development operations from 18 cities around the world to four hubs.
Additionally, Accenture has signed a global information technology services agreement to support systems integration of Reuters products globally.
Reuters also said in February that it intended to exit the systems integration services business to focus on its core information services. Under the agreement, Accenture will also service some of Reuters existing systems integration contracts and up to 70 Reuters employees in Europe will transfer to Accenture, subject to local legislative and regulatory requirements.
Commenting on the contract, Glocer says: "This accord with Accenture provides service continuity for our customers, a new sales channel for Reuters information and continuing solutions products, and a good employer for the transferring employees."
Reuters has also announced an agreement with Sun to strengthen and expand support for the Reuters Market Data System (RMDS) on multiple Unix-based systems, in an effort to meet user demands for more flexibility in data centre hardware and software deployment. While continuing to support RMDS on the Solaris O/S and UltraSparc architecture, Reuters will also support RMDS on Intel-based servers from Sun which run the Linux operating system. In addition, Reuters is looking to use Sun One Studio 8 and Solaris 9 to increase RMDS performance on UltraSparc, the most widely used platform for RMDS today.
Separately, Reuters is to integrate JPMorgan's electronic fixed-income trading system, JPMorgan eXpress (JPex) with its products including the 3000 Xtra, BridgeStation and Trader desktops.
JPex provides live, streaming tradable prices on a range of instruments including government securities, credit securities, agencies, structured credit products, structured index products and emerging market sovereign and corporate securities.
Reuters integration of JPeX uses JPMorgan's bond prices as a gateway to market liquidity and offers users immediate execution in two way markets.
Tim Frost, head of credit trading in Europe, JPMorgan, says JPeX on Reuters will offer investors improved access to liquidity and trading functionality.
"In the coming months we plan to expand this offering to provide Reuters customers with seamless access to other JPMorgan fixed income services including research and analytics from MorganMarkets," says Frost.
On the contract front, Reuters has developed and deployed a customised proprietary, Web-based investment research and analytics desktop system for Edinburgh-based AEGON Asset Management UK.
The platform is designed to support AEGON's individual investment process and features a variety of Reuters Research information systems including broker research, detailed estimates and fundamental data, as well as the vendor's market data feeds.
Internal research documents, stock recommendations, target prices, informal commentary and upcoming internal events will also be available to users.