Reuters Holdings Plc’s announcement of its interim results yesterday painted a picture of an information giant barely feeling the results of the recession. Revenue, pre-tax profits and net profits were all up, after significant increases in revenue from the Americas, Asia and the Pacific. Revenue for the company as a whole for the six months to June 30 climbed 41.1% at UKP145.8m following a tax charge last time of UKP24.6m. Net profit for the six months soared 41.1% at UKP145.8m; pre-tax profits climbed 14.6%, reaching UKP214.7m. Although Reuters took approximately UKP19m of losses in currency hedging contracts, it made an overall profit out of currency fluctuations. A large percentage of the revenue growth came from the devaluation of sterling according to the company, which put real growth at 5.7%. Revenue from the Americas, which grew by 26.9%, was mirrored by the 51.2% growth in revenue of Reuters’ Instinet equities transaction subsidiary, which is a largely American business. Asia and Pacific revenue grew by 22.2% while Europe, the Middle East and Africa lagged behind at 13.5%. There was no real revenue from its new automated transaction products, Globex and Dealing 2000-2. The company’s announcement of a UKP350m share repurchase, which will be finalised in a meeting on September 10, did not mean that Reuters had no new ideas for investment according to finance director Rob Rowley, who said that it still leaves us with plenty of financial capacity to do the things we want to do when we want to do them. The move will whittle down cash levels within the company, which currently stand at UKP629.8 – down on last year. Reuters’ use of cash grew on last time and now outstrips cash sources according to Rowley. The cash reserves, which stood at UKP709.8m a year ago, were hit by a UKP119m payment of UK advance corporate tax in January, as well as increased dividend payments, up by 24% in April, and capital expenditure that is up 52.7% on last time. The company also spent UKP18m on acquisitions this period, with expenditure for the next six months and for 1994 set to increase again. The shares, which jumped for joy on Monday’s news of the planned buy-back, eased after release of the half-year results. By mid-morning they were up threepence at 1,443 pence having been quoted at 1,454 pence immediately ahead of the announcement.
