Reuters has released better than expected first quarter results for its electronic broking subsidiary Instinet. The figures, which show strong growth in revenue and profits, provide a significant boost to the news and information group as it prepares for a partial flotation of Instinet in the US.
Total first quarter revenues for Instinet were approximately $431 million with net income at $50 million, an increase of 24% and 18%, respectively, from total revenues of approximately $349 million and net income of approximately $42 million for the first quarter of 2000.
Instinet also recorded a 56% increase in trading volumes in Nasdaq-quoted and 37% volume increase in NYSE-listed stocks during the first quarter. The company now claims a 15.1% share in Nasdaq stocks, up from 11.3% this time last year, and a three per cent share of NYSE volume.
The numbers reported by Instinet conform to US GAAP accounting principles and include soft dollar and commission recapture revenue and interest income. Under UK GAAP, Instinet’s revenue for the first quarter of 2001 was £250 million, up 27% from the first quarter of last year with underlying revenue up 20%.
As previously announced, it is anticipated that the IPO will be for a maximum of 14.1% of Instinet’s capital stock. An indicative price range of $11 to $14 a share values the business at $2.6bn to $3.4bn.