Reuters’ net profit up to £25M

Press, 7 August 1985, Page 34

Reuters’ net profit up to £25M

NZPA-Reuter London Reuters’ pre-tax profit rose by 43.5 per cent to £ 43.2 million ($NZ112.85 million) in the first half of 1985 from £30.1 million ($NZ78.63 million) in the first half of 1984. The results include £2.7 million (?NZ7.05 million), compared with a break-even a year earlier, from Reuters’ recently-acquired United States subsidiary, Rich Inc., the company’s managing director, Mr Glen Renfrew, said. Pre-tax profit, excluding the Rich Inc. contribution, was £40.5 million ($NZ105.79 million), 34.6 per cent higher than in the first half of 1984. Profit after tax was £25.0 million (?NZ65.30 million), up 42.9 per cent. Earnings a

share improved by 33.3 per cent to 6p. The 1985 figure is based on a weighted average of 410.1 million shares, allowing for the shares issued to the former owners of Rich Inc. The board has declared an interim dividend of 1.25 p a share, payable on September 20, to shareholders on the share register at August 23. This compares with last year’s interim dividend of lp. “Sterling's weakness af-, fected the underlying business favourably in the early months of the year, but this was offset by the adverse effect of forward cover contracts, some of which related to revenue collected in advance for the second half of the year. “Revenue, including £15.9 million ($NZ41.57 million) — 1984, £8.2 million ($NZ21.42

million) — from Rich Inc., was 42.1 per cent higher at £212.8 million (SNZSS6 million). The pre-tax profit margin was 20.3 per cent compared with 20.1 per cent in the first half of 1984. “Some price increases, the first for several years, were made at the beginning of the year. They were, however, modest and selective, bringing in approximately £3 million (SNZ7.B3 million) in the halfyear. “Strong demand around the world for Reuters’ major revenue-earning services overshadowed a number of soft spots. New sales, both gross and net of cancellations, remain buoyant. Sales have been particularly good for money market services, including the Reuter Monitor with its recent enhancements and the Reuter Monitor Money Dealing Service. “Europe continued to set the cnloc vnliimo with thp

East, Australia and New Zealand doing very well. “In North America, sales were good for international money services, especially Monitor Money Dealing. Services for the United States domestic money market made steady progress. Growth in the commodities market continued to be hampered by heavy cancellations. “Pre-launch sales of a new small dish satellite service for domestic money and commodity markets were very promising. Progress was restrained by the lower oil revenues and unsettled conditions in the Middle East, by the continuing effects of the international debt crisis in Latin America and a variety of economic problems in Africa. “Sales of Rich Inc. systems were strong in North America and gathered momentum in Europe. Work progressed on the first installations in Asia. Rich Inc. svstems switch and

display information from many different sources, including Reuters, to large numbers of screens in financial dealing rooms. Capacity was increased at the Rich Inc. Chicago plant to cope with the increased growth in demand. “Development activity on new products and network enhancements remained intense. "At the shareholders’ meeting in May, we said currency factors would, on indications then current, produce a modest benefit. Since then, sterling has strengthened considerably. This strength, if maintained against the major European, Eastern and Middle Eastern currencies, would produce an adverse effect in the second half which would be partly offset by forward cover. “However, the outlook is for continued good growth based on strong demand for Reuters’ main oroducts.”