Reuters profit rises 32 p.c.

Press, 30 July 1986, Page 41

Reuters profit rises 32 p.c.

NZPA-Reuter London Reuters Holdings pic unaudited pre-tax profit rose by 32.4 per cent to £57.2 million (SNZI6I.I million) in the first half of 1986. This was up from £43.2M (SNZI2I.7M) in the first half of 1985. Profit after tax was 41.7 per cent higher at £35.5 million ($100M), helped by a reduction in the company's over-all tax rate of 38 per cent from 42 per cent. Earnings per ordinary share were 8.6 p (NZ24.2C), an increase of 42.3 per cent from the 6p (17c) earned in the first half of 1985. Interim dividend will be 1.75 p (sc) a share, compared with 1.25 p (3.5 c for the first half of 1985. The dividend is payable on September 19. Revenue was 26.1 per cent higher at £268.2 million (5755.3 M and its growth was

restrained in sterling terms by currency movements. The underlying growth, measured at comparable exchange rates, was over 30 per cent. The effect of currency movements on profit was, however, negligible. The group figures include revenue of £17.5 million ($49.3M) and pre-tax profit of £3.4 million ($9.6M) contributed by Rich Inc, the United States supplier of financial dealing room systems which became a wholly owned subsidiary of Reuters in April, 1985. These figures exclude sales of Rich systems through other parts of the group. The number of Installed video terminals rose 57.7 per cent to 85,799 from 54,400 a year ago.

Reuters managing director and chief executive, Mr Glen Renfrew, said the rate of new

orders was significantly higher than in 1985. Demand was excellent for all main Reuter products and Rich Inc systems and was strongest in Europe, Japan, Australia and New Zealand. The introduction of the Reuter Monitor dealing service to Japan boosted total sales in tha country and closed a big gap in the global dealing network. Orders in North America came in at more than double the 1985 rate. Cancellations were relatively heavy in parts of the Middle East, Latin American and African markets, but the effect of this was absorbed by the pace of growth elsewhere. The Advanced Reuter Terminal (ART) was the most important of several new products launched in the first half of this year. Mr Renfrew said the ART set new standards for dealer work stations, providing computing power and high-resolu-tion colour and graphics displays that were at the same time sophisticated and easy to use.

Reuters had acquired the finance division of Hovland Business Systems. The company completed the purchase in April of 6.7 per cent of the outstanding common shares of Instinet Corporation, together with

warrants, which if exercised, would increase the holding to an estimated 27.8 per cent.

Reuters has marketing rights outside North America in Instinct’s automated trading system for United States equities and options.

Mr Renfrew said the Reuters news gathering network was further expanded and now embraced 106 international bureaux.

"It is too early to forecast a result for the full year, but new business remains buoyant and the current outlook is good for continued progress in line with Reuters high growth targets,” he said.