Disposals boost profits at Reuters

Disposals boost profits at Reuters

News and Information group Reuters is reporting a rise in pre-tax profits for the sixth months ending June 30th 2004, boosted by disposals of assets and cost cutting measures.

Reuters reported pre-tax profit of £332m, compared to £19m last year. This includes £220m of gains from disposals of assets including Tibco software, GL Trade, RiskMetrics, TowerGroup, Yankee Group and ORT SAS Group.

The group says revenue fell 11% to £1.4bn in the first half, partly due to US dollar weakness.

The company, which is half-way through its three year restructuring programme, says the slide in recurring revenues slowed for the third successive quarter to 6.2% compared to the previous year.

Recurring revenue, which represents 93% of Reuters' revenue for the six months, was £1.09bn. Second quarter recurring revenue was £537 million - an underlying decline of 6.2% compared to last year.

In a statement, Tom Glocer, Reuters group chief executive, says: "While the external environment in the second quarter was somewhat less benign than in the first, our increased competitiveness and better sales discipline mean that we expect to see the recurring revenue trend continue to improve gradually."

Reuters says it expects Q3 underlying recurring revenue to decline about five per cent, with continued gradual improvement in Q4.

In June, the group said that net sales turned positive during May for the first time in three years, as new sales exceeded cancellations.

Separately, JPMorgan Chase has gone live with Reuters Electronic Trading - Order Management (RET-OM), a real-time system for managing and monitoring foreign exchange limit orders on a global basis. The bank already uses Reuter's Automated Dealing platform.

JPMorgan has also selected Reuters to develop and host a portal to deliver independent, third-party research as part of its plan to comply with the terms of the Global Analyst Research Settlement.

The Web-based portal will provide seamless navigation across their existing portals, which include Chaseonline.com, MorganOnline.com, Brownco.com, and Morganmarkets.com.

Also, European banking group SEB is rolling out the Reuters 3000 Xtra premium desktop across 630 positions across its investment banking, merchant banking, asset management and private wealth divisions. The 3000 Xtra system replaces Reuters 2000 and 3000 series products.

The move means that SEB staff located in key centres across the Nordics, US, UK, Germany, Switzerland, Luxembourg, Baltics and Singapore, will all work from one common platform.

Reuters has also signed Susquehanna International Group to its Trader product.

Susquehanna will replace its existing desktop system with 700 Reuters Trader positions. The new desktop product provides comprehensive information, analytical and trading services for institutional sales and trading and portfolio management. This deal is in addition to a recent agreement to roll out the Reuters Market Data System on Linux to Susquehanna's trading floors.

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