News and information group Reuters expects core subscription revenues to stabilise in the second quarter, ending three years of successive declines, after recording a 1.4% drop in Q1 2005.
Reuters is posting recurring revenue for the three months to end-March 2005 of £530 million (2004: £556 million), down 1.4% on an underlying basis, compared to a forecast underlying decline of around 1.5%. Total revenue for the first quarter is down 6.2% to £561 million (2004: £598 million), representing an underlying decline of 2.5% compared to 8.2% in the same period in 2004.
The results point to an improving quarterly sales trend, with three consecutive months of positive net sales for the first time since Q1 2001. The company is reporting steady progress on new products – 3000 Xtra users up 4000; Reuters Knowledge and Wealth Manager users up 2000; Reuters Trader users up 1000.
The positive trend in top tier sales of Reuters Xtra products and a strong showing from the Datascope feeds division compensated for a 22% fall in Reuters Market Data Systems revenues as the vendor withdrew from bespoke infrastructure development, and a surprise ten per cent drop off in sales from Reuters' risk products.
While recurring revenue from maintenance contracts grew, says Reuters, fewer outright sales of risk software closed in the quarter.
The company, which has been shedding non-core businesses as part of a three-year cost-cutting programme, had no further news on the pending disposal of electronic brokerage Instinet. Reuters is reportedly in exclusive talks with Nasdaq about a $1.8 billion sale.