Reuters has released details of its divisional profits for the first time and is reporting healthy profit margins at its sales & trading and enterprise units, but has posted losses at its research and asset management division.
Reuters' largest division - institutional sales and trading which provides trading platforms, including the 3000 Xtra desktop - made an underlying profit of £260m in 2004, with an operating margin of 17%. The division accounts for around two-thirds of Reuters' revenue and more than three quarters of its profit.
The vendor's enterprise unit, which supplies the Reuters Market Data System and Kondor+ risk management product, among others, posted an operating profit of £63m with a profit margin of 16%.
But its research and asset management, aimed at research analysts and portfolio managers, reported an operating loss of £7m in 2004. Reuters told analysts that, in order to improve the division's profitability it will look to deliver higher value and more exclusive content.
The company's media division - the smallest of the four units - posted an operating profit of £16m and a profit margin of 11%.
The disclosure of the divisional information is seen as a move by Reuters to increase company transparency and introduce performance-related bonus schemes. Market analysts welcomed the disclosure. The company's stock continued to rise today, increasing 1.22%, or 4.75 pence to 395.50 in early afternoon trading.
Reuters is currently in the third and last year of its Fast Forward restructuring programme, which was introduced in February 2003 when the group reported its biggest ever loss.Download the document now 0.1 Mb (Adobe Acrobat Document)