We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Reuters Grp. | LSE:RTR | London | Ordinary Share | GB0002369139 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 631.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
RNS Number:8030N
Reuters Group PLC
22 July 2003
REUTERS GROUP PLC - INTERIM RESULTS
for the six months to 30 June 2003
22 July 2003 07/03
REUTERS ANNOUNCES FIRST HALF PROFIT; FAST FORWARD ON TRACK
Business performance
Reuters Group
*Group normalised pre-tax profit of #87 million, compared to a loss of #10
million in 2002
*Normalised earnings per share of 4.8p (2002: loss per share of 0.5p)
*Interim dividend maintained at 3.85p per share
Reuters
*Reuters revenue of #1,349 million (2002: #1,542 million), down 12% on an
underlying basis
*Reuters recurring revenue of #1,255 million (2002: #1,405 million), down
10% on an underlying basis in line with expectations
*Reuters normalised operating margin of 14.7% before restructuring, ahead
of previous full year guidance of 12%
*Reuters normalised operating profit up 25% on an actual basis to #119
million (2002: #95 million) after #79 million of restructuring charges
*Reuters free cash flow of #29 million; cash conversion over 12 months of
110%
*Reuters normalised earnings per share up 125% to 4.9p
Fast Forward highlights
*New product launches on track; Lehman Brothers partnering with Reuters to
roll out Reuters Knowledge to all of its senior investment bankers
*Cost savings ahead of plan, with #30 million of the #45 million forecast
from Fast Forward this year already delivered; full year savings target
raised to #55 million
Instinet
*Instinet revenue of #275 million (2002: #301 million), with Q2 up 11%
over Q1 at actual rates
*Instinet normalised operating profit pre-restructuring of #4 million
(2002: #5 million loss)
*Instinet pre-tax loss of #25 million (2002: #83 million loss)
Statutory results
Six months to % Change Year to 31
30 June December
2003 2002 Actual Underlying 2002
#m #m #m
---------------- -------- -------- ------- -------- -------------
Group revenue 1,620 1,838 (12%) (10%) 3,575
---------------- -------- -------- ------- -------- -------------
Operating costs (1,559) (1,863) (16%) (14%) (3,719)
---------------- -------- -------- ------- -------- -------------
Operating profit/ 61 (25) (144)
(loss) -------- -------- ------- -------- -------------
----------------
Profit/(loss) before 16 (88) (493)
taxation -------- -------- ------- -------- -------------
----------------
Earnings/(loss) per 0.3p (5.2p) (29.0p)
share -------- -------- ------- -------- -------------
----------------
As used throughout this release, "normalised" profits, costs and earnings
exclude amortisation of goodwill and intangible assets, impairment charges and
gains/losses on the disposal of subsidiaries and fixed asset investments.
Underlying growth excludes acquisitions and disposals since 1 January 2002 and
is stated at constant exchange rates. The only exception is the Island
acquisition, which has been fully integrated within Instinet.
This release includes certain non GAAP figures which are performance measures
used to manage the business. Reconciliations to equivalent UK GAAP figures can
be found at www.about.reuters.com, in the Investors section under Financial
Data.
Tom Glocer, Reuters Group Chief Executive, said: "I am pleased to report a solid
set of results across the Group for the first half of this year. Reuters core
recurring revenues are in line with our expectations and we have narrowed our
guidance for the full year to a decline of around 11%. Our first half operating
margins came in ahead of our full year guidance thanks to real discipline in
managing the cost base and favourable currency movements. We now expect to
improve on last year's 13.1% margin for the full year.
"Although market conditions continue to be tough, particularly in Europe, we
have seen real improvement in the competitiveness of our products and are making
good progress with Fast Forward. We have launched an exciting suite of new
products in the first half, and today we have announced good sales wins at
Goldman Sachs and Lehman Brothers. Our cost savings are ahead of plan and we now
expect savings of #55 million from Fast Forward this year. All in all, I am
pleased with the progress we have made so far. We still have a long way to go,
but I am confident that we are on the right track."
Contacts
Press - UK Tel: +44 (0) 20 7542 7800
Simon Walker
simon.walker@reuters.com
Investors - UK Tel: +44 (0) 20 7542 7057
Miriam McKay
miriam.mckay@reuters.com
Investors and press - USA Tel: +1 646 223 5220
Nancy Bobrowitz
nancy.bobrowitz@reuters.com
Notes
Reuters (www.about.reuters.com), the global information company, provides
indispensable information tailored for professionals in the financial services,
media and corporate markets. Our information is trusted and drives decision
making across the globe based on our reputation for speed, accuracy and
independence. We have 16,000 staff in 94 countries, including some 2,400
editorial staff in 197 bureaux serving approximately 130 countries, making
Reuters the world's largest international multimedia news agency. In 2002, the
Reuters Group had revenues of #3.6 billion.
Reuters and the sphere logo are the trademarks of the Reuters group of
companies.
Reuters interim results presentation for investors and analysts will be webcast
live today from 09:30 BST and available for replay from 12:00 BST via
www.reuters.com/webcast/resultsq203.
Reuters will hold a conference call for US investors at 15:00 BST / 10:00 EST.
To participate, please call Georgina Blain in London on +44 (0) 20 7542 3717 or
Donovan Johnson in New York on +1 646 223 5221.
An interview with Tom Glocer, Reuters Group Chief Executive, in video, audio and
text will be available from 07:00 BST on www.reuters.com and www.cantos.com.
Photographs are available in the Media Library at www.about.reuters.com
Review of 2003 interim results
Reuters Group
Reuters Group (RTR.L; RTRSY.O) revenue for the six months to 30 June 2003 was
#1,620 million, a decline of 12% at actual rates on the first half of last year.
Reuters Group normalised pre-tax profit was #87 million, compared to a loss of
#10 million in 2002. Reuters Group pre-tax profit of #16 million, including
amortisation costs of #54 million, compared to a loss of #88 million in 2002.
Reuters Group normalised earnings per share were 4.8p, compared to a loss per
share of 0.5p in 2002. Normalised earnings per share in Reuters were 4.9p, and
there was a loss per share of 0.1p at Instinet.
The interim dividend is maintained at 3.85p per share.
Basic earnings per share for the Reuters Group were 0.3p compared with a loss
per share of 5.2p in 2002.
At the end of June 2003, Reuters Group had net debt of #298 million with Reuters
carrying #750 million of net debt (31 December 2002: #584 million net debt) and
Instinet holding #452 million of net funds (31 December 2002: #518 million net
funds). The change in Reuters net debt position in the first half of this year
was largely driven by the acquisition of Multex.
Reuters
Reuters core revenue, excluding Instinet and joint ventures, was #1,349 million.
On an underlying basis, adjusting for exchange rate movements and the impact of
acquisitions and disposals, this represents a 12% decline on the first half of
last year.
Reuters normalised operating profit before restructuring was #198 million (2002:
#195 million), a rise of 2% on an actual basis. Operating costs before
restructuring fell 15%, reflecting the impact of prior year cost saving
initiatives and this year's Fast Forward programme. Normalised operating margin,
before restructuring charges, increased to 14.7% from 12.6%, driven largely by
continuing cost discipline and favourable currency movements.
Reuters took a restructuring charge of #79 million in the first half (2002: #100
million) related to reductions in headcount and occupancy costs connected with
the Fast Forward programme.
Reuters normalised profit before tax was up 97% on an actual basis to #92
million (2002: #47 million). This includes net losses from affiliates (net of
investment income) of #13 million, down from #30 million last year.
Reuters generated #135 million of operating cash (pre-restructuring) and free
cash flow of #29 million for the half year. Looking at the 12 months ended 30
June 2003 to eliminate seasonal factors, Reuters generated #434 million of
operating cash pre-restructuring, 110% of the equivalent amount of normalised
operating profit, and free cash flow of #219 million.
Revenue by type
Recurring revenue from subscription products, which made up 93% of Reuters core
revenue in H1, was #1,255 million, down 10.0% on an underlying basis compared
with the first half of 2002. The underlying fall in the second quarter was 10.9%
compared with the second quarter of 2002, in line with Reuters expectations.
The level of net cancellations in the second quarter was roughly similar to that
seen in the first quarter, although a slight deterioration in Europe masked a
slowing of the rate of decline in other parts of the world.
Outright revenue, which represents 3% of Reuters core revenue, was #43 million,
down 43% in underlying terms. This decline reflects customers' continued
reluctance to commit to IT spend, plus the early impact of the revenue reduction
forecast under Fast Forward. Looking beyond the overall decline in this
historically volatile source of revenue, there have been encouraging
developments in Reuters three key areas of focus - Treasury Solutions, Risk
Management and Content Management.
Usage revenue was #51 million, down 10% on an underlying basis. Strong growth of
20% in Treasury usage revenues from FX and forwards Matching systems was offset
by a 46% decline in Investment Banking usage revenues, which come largely from
Bridge Trading.
Revenue by customer segment
Revenue from Treasury was #513 million, down 9% on an underlying basis. Strong
recurring revenue growth from Reuters 3000 Xtra continued to be offset by
declines in legacy information products and conversational Dealing. However, the
rate of decline in conversational Dealing accesses slowed this quarter, with the
total number of premium and mid tier accesses declining by 1%. At the end of the
quarter, Reuters had over 17,000 Dealing keystations and 430 mid tier accesses
of Reuters Dealing Link. Usage revenue in Treasury grew 20% on an underlying
basis over the first half of 2002, thanks to strong performance in both spot and
forwards Matching. Spot volume increases were particularly noticeable in euro/
dollar and emerging currency pairs. Matching is set to expand to cover further
instrument classes, with Matching for swaps due for launch later this year.
Revenue from Investment Banking was #362 million, down 16% on an underlying
basis. This reflects steep declines in both outright and usage revenue as well
as a 13% underlying decline in recurring revenue. The second quarter saw a
second consecutive modest improvement in the quarter-on-quarter rate of decline
in recurring revenues. Despite sustained customer pressure to cut costs, Reuters
continued to improve its competitive position. There were good sales wins for
Reuters 3000 Xtra at Cazenove and Bank of Tokyo Mitsubishi and for Reuters North
American Capital Markets at JP Morgan Chase. Looking forward to the second half
of the year, the newly released Reuters Knowledge is targeted at building share
in the research and advisory market and BridgeStation 8.0 brings new
functionality to US equity traders.
Revenue from Asset Management was #321 million, down 12% on an underlying basis.
Revenue increases for Reuters 3000 Xtra and end-of-day pricing and compliance
feed Datascope were more than offset by declines in legacy 2000/3000 series
products and domestic products. The second half of this year will see the
release of Reuters Intelligent Advisor, targeted at private wealth managers, and
the integration of Barra into Reuters products to execute on the two companies'
exclusive alliance to bring risk management to the front office.
Revenue from Corporates and Media was #153 million, down 6% on an underlying
basis. Media revenues as a whole have been relatively robust, with the only
exception being online products which were hit by continuing fall-out in this
sector. Usage revenue increased by 122% to #5 million, driven by customer demand
for coverage of the Iraq war.
Recurring revenue by product
Premium tier revenue, which includes Reuters 3000 Xtra, BridgeStation and
Dealing, was #357 million, up 10% on an underlying basis year-on-year and up 1%
from the previous quarter. The number of accesses at period end stood at 95,000,
up 12% on the equivalent period last year. This growth was driven by Reuters
3000 Xtra, which saw revenue up 30% year on year on an underlying basis. Average
revenue per access across all premium products was down 2% on an underlying
basis, reflecting higher average prices for Bridge premium products, higher
volume discounts for 3000 Xtra as customers continue planned roll-outs, and the
usual mix effects.
Recurring revenue from 2000/3000 series products was #203 million, down 33% on
an underlying basis year-on-year and 11% on the previous quarter, driven by
cancellations and migrations to 3000 Xtra. Reuters Trader was released at the
end of May to provide a mid tier migration path for 2000/3000 series users.
Early customer feedback has been encouraging, and Dutch private bank Van
Lanschot was the first customer to sign up for the new product.
Revenue from mid and low tier products was #140 million, down 9% on an
underlying basis, with lower priced domestic products being the hardest hit. The
effect of mid and low tier losses, which account for over three quarters of the
80,000 accesses lost in the last year, is relatively minor in revenue terms.
Recurring revenue from all other sources such as exchange fees and software
maintenance was #555 million, down 10% on an underlying basis in line with the
overall revenue decline in desktop products.
Operating costs
Reuters normalised operating costs were reduced to #1,151 million before
restructuring, a reduction of 15% in actual terms and 13% in underlying terms.
This is 1% more than the underlying reduction in revenues. The principal driver
of this reduction was flow through from previous transformation programmes. The
largest savings came from efficiency gains in development, customer segments and
back office functions. Staff costs fell by 11% on an underlying basis, driven by
reductions in headcount and cost per head. In the first half of the year over
700 people left the company, driving a 15% reduction in occupancy costs.
Instinet
Instinet, the electronic broker in which Reuters has a 63% stake, posted
revenues of #275 million, down 9% on an actual basis compared to the first half
of last year. The second quarter saw a revenue improvement of 11% at actual
rates on the previous quarter, driven by growth in trading volumes in May and
June.
Normalised operating profit before restructuring was #4 million compared to a
loss of #5 million in 2002.
Normalised operating costs fell 11% at actual rates to #271 million from #306
million in the equivalent period last year, reflecting reductions in staff
costs; brokerage, clearing and exchange fees and occupancy expenses.
Instinet took a restructuring charge of #12 million in the first half, down from
#56 million in 2002. As a consequence of the reduction in restructuring charges
and the improvement in operating profitability, Instinet's pre tax loss was down
to #25 million from #83 million in 2002.
Instinet's major strategic development this quarter was to announce the
separation of its buy side and sell side businesses. The purpose of this
reorganisation is to add strategic clarity and serve customers better. The buy
side business will be a global value-added brokerage that seeks best execution
on behalf of its customers. The sell side business will consist of an
alternative trading system made up of the Instinet and Island ECNs, plus their
clearing broker, Instinet Trading Services. It is envisaged that this
organisational change will be reflected in Instinet's financial disclosure for
the first time in the first quarter of 2004.
Impact of currency movements
In core Reuters, changes to currency rates caused a 1.4% decline to revenues in
H1, with a 9% increase in the euro more than offset by a 12% fall in the US
dollar. Of the 15% decline in costs (pre-restructuring), 3% can be attributed to
currency, most notably the weak dollar. The overall effect of currency
fluctuations is a 9% boost to normalised operating profit (pre-restructuring)
and a 1% improvement to operating margin on the same basis.
For Reuters Group, changes to currency rates reduced revenue by 2.4% and
increased normalised operating profit pre-restructuring by 13%. The currency
effect is comparatively larger for the Group because of the high proportion of
Instinet's revenue and losses denominated in US dollars.
Reuters prospects
Despite the recent improvement in market sentiment, Reuters remains relatively
cautious about its sales prospects through the remainder of this year,
particularly in Europe. Reuters expects the underlying decline in third quarter
recurring revenue to be between 11% and 12% and the full year decline to be
around 11%.
Second half normalised operating margins (pre-restructuring) are likely to be
lower than the 14.7% achieved in the first half of the year. This is because of
the planned increase in operating expenditure on Fast Forward initiatives.
Nevertheless, Reuters now expects to improve on its 2002 full year normalised
operating margin (pre-restructuring) of 13.1% in 2003.
Summary of Group results
The following is a summary of the unaudited results of Reuters Group PLC for the
six months to 30 June 2003.
Six months to % Change Year to 31
30 June December
2003 2002 Actual Underlying 2002
#m #m #m
------------------- -------- -------- ------ -------- -------------
Group revenue 1,620 1,838 (12%) (10%) 3,575
------------------- -------- -------- ------ -------- -------------
Operating costs (1,559) (1,863) (16%) (14%) (3,719)
------------------- -------- -------- ------ -------- -------------
Operating profit/ 61 (25) (144)
(loss) -------- -------- ------ -------- -------------
-------------------
Profit/(loss) before 16 (88) (493)
taxation -------- -------- ------ -------- -------------
-------------------
Earnings/(loss) per 0.3p (5.2p) (29.0p)
share -------- -------- ------ -------- -------------
-------------------
Dividend per ordinary 3.85p 3.85p 10.0p
share -------- -------- ------ -------- -------------
-------------------
Business performance
Six months to % Change Year to 31
30 June December
2003 2002 Actual Underlying 2002
#m #m #m
------------------- -------- -------- ------ -------- -------------
Revenue
------------------- -------- -------- ------ -------- -------------
- Reuters 1,349 1,542 (13%) (12%) 2,992
- Instinet 275 301 (9%) (1%) 592
- Group (1) 1,620 1,838 (12%) (10%) 3,575
-------- -------- ------ -------- -------------
-------------------
Normalised operating
profit/(loss) before -------- -------- ------ -------- -------------
restructuring (2)
-------------------
- Reuters 198 195 2% (4%) 393
- Instinet 4 (5) - - (14)
- Group 202 190 7% (4%) 379
------------------- -------- -------- ------ -------- -------------
Normalised operating
profit/(loss) -------- -------- ------ -------- -------------
-------------------
- Reuters 119 95 25% 13% 281
- Instinet (8) (61) 86% 80% (110)
- Group 111 34 225% 129% 171
------------------- -------- -------- ------ -------- -------------
Normalised profit/
(loss) before -------- -------- ------ -------- -------------
taxation
-------------------
- Reuters 92 47 97% 67% 194
- Instinet (5) (57) 90% 84% (105)
- Group 87 (10) - - 89
------------------- -------- -------- ------ -------- -------------
Normalised earnings/
(loss) per share -------- -------- ------ -------- -------------
-------------------
- Reuters 4.9p 2.2p 10.8p
- Instinet (0.1p) (2.7p) (4.0p)
- Group 4.8p (0.5p) 6.8p
------------------- -------- -------- ------ -------- -------------
Free cash flow
------------------- -------- -------- ------ -------- -------------
- Reuters 29 24 214
- Instinet (64) (215) (174)
- Group (35) (191) 40
------------------- -------- -------- ------ -------- -------------
Movements in net
(debt)/funds -------- -------- ------ -------- -------------
-------------------
- Reuters (166) (118) 118
- Instinet (66) (223) (322)
- Group (232) (341) (204)
------------------- -------- -------- ------ -------- -------------
1. Net of #4 million intra-group revenue in 2003 (June 2002: #5 million;
December 2002: #9 million)
2. Restructuring charges occurred in both the current and prior period and
are anticipated to occur in future periods.
Notes:
* This summary should be read in conjunction with the attached interim
statement and notes.
* "Reuters Group" and "Group" refer to Reuters Group PLC and its
consolidated subsidiaries including Instinet. "Reuters" refers to Reuters Group
excluding Instinet.
* Underlying growth and normalised profits and earnings are measures
used by the Group to enable period-to-period comparison on a like-for-like basis
such that organic operational growth can be easily identified.
* Underlying growth excludes acquisitions and disposals since 1 January
2002 and is stated at constant exchange rates. The only exception is the Island
acquisition, which has been fully integrated within Instinet.
* Normalised profits and earnings exclude amortisation of goodwill and
other intangible assets, impairment charges and gains/losses on the disposal of
subsidiaries and fixed asset investments.
* Free cash flow represents net cash inflow from operations less capex,
taxation payments and net interest paid in the period. Cash conversion is the
percentage of the last 12 months' normalised operating profit
(pre-restructuring) that has been converted into cash.
* The weighted average number of ordinary shares used for the
calculation of earnings per share was 1,395 million in 2003 (June 2002: 1,397
million).
* The interim dividend of 3.85 pence per share is payable on 3 September
2003 to ordinary shareholders on the register at 1 August 2003. The interim
dividend is payable on 10 September 2003 to American Depositary Shareholders on
the record at 1 August 2003. The ex-dividend date for ordinary shareholders and
American Depositary Shareholders is 30 July 2003.
* This news release contains certain forward-looking statements within
the meaning of the United States Private Securities Litigation Reform Act of
1995 with respect to Reuters Group's financial condition, results of operations
and business and management's strategy, plans and objectives for the Group. For
further details see "Forward-looking statements".
* Reuters and the sphere logo are the trademarks of the Reuters group of
companies.
Consolidated profit and loss account for the six months to 30 June 2003
(unaudited)
Six months to Year to 31
30 June December
2003 2002 2002
#m #m #m
Gross revenue 1,671 1,889 3,682
Less share of joint ventures revenue (51) (51) (107)
---------------------------- -------- -------- -------------
Group revenue 1,620 1,838 3,575
Operating costs (1,559) (1,863) (3,719)
---------------------------- -------- -------- -------------
Operating profit/(loss) 61 (25) (144)
Share of operating losses of joint ventures (10) (18) (35)
Impairment of investments in joint ventures - - (6)
Share of operating losses of associates (6) (19) (39)
Loss on disposal of subsidiary undertakings (1) - (29)
Profit on disposal of fixed assets/ - 5 1
investments
Income from fixed asset investments - 1 1
Amounts written off fixed asset investments (17) (18) (222)
Net interest payable (11) (14) (20)
---------------------------- -------- -------- -------------
Profit/(loss) on ordinary activities before 16 (88) (493)
taxation
Taxation on profit/(loss) on ordinary (20) 4 (23)
activities -------- -------- -------------
----------------------------
Loss on ordinary activities after taxation (4) (84) (516)
Equity minority interest 8 11 112
---------------------------- -------- -------- -------------
Profit/(loss) attributable to ordinary 4 (73) (404)
shareholders
Dividend
- Interim (54) (53) (53)
- Final - - (86)
---------------------------- -------- -------- -------------
Loss for the period (50) (126) (543)
---------------------------- -------- -------- -------------
Basic earnings/(loss) per ordinary share 0.3p (5.2p) (29.0p)
---------------------------- -------- -------- -------------
Consolidated statement of total recognised gains and losses for the six months
to 30 June 2003 (unaudited)
Six months to Year to 31
30 June December
2003 2002 2002
#m #m #m
Profit/(loss) attributable to ordinary 4 (73) (404)
shareholders
Unrealised gain on deemed partial disposal of - 1 1
subsidiary
Unrealised gain on deemed partial disposal of - 12 12
associate
Unrealised gain on disposal of fixed asset - 10 10
investment
Translation differences taken directly to
reserves (54) (34) (95)
---------------------------- -------- -------- -------------
Total recognised losses relating to the (50) (84) (476)
period -------- -------- -------------
----------------------------
Consolidated cash flow statement for the six months to 30 June 2003 (unaudited)
Six months to Year to 31
30 June December
#m #m #m
---------------------------- -------- -------- -------------
Net cash inflow/(outflow) from operating 93 (10) 355
activities
Dividends received from associates 1 - 2
Returns on investments and servicing of
finance
Interest received 6 11 20
Interest paid (21) (35) (58)
Income from fixed asset investments - 1 1
Dividends paid to equity minority interests - - (27)
---------------------------- -------- -------- -------------
Net cash outflow from returns on investments (15) (23) (64)
and servicing of finance
Taxation paid (39) (45) (73)
Capital expenditure and financial
investments
Purchase of tangible fixed assets (63) (62) (168)
Sale of tangible fixed assets 3 - 15
Purchase of fixed asset investments - (75) (80)
Sale of fixed asset investments - 17 22
---------------------------- -------- -------- -------------
Net cash outflow on capital expenditure and (60) (120) (211)
financial investments
Acquisitions and disposals (including joint (114) (18) (6)
ventures and associates)
Equity dividends paid (86) (86) (139)
---------------------------- -------- -------- -------------
Cash outflow before management of liquid (220) (302) (136)
resources and financing
Management of liquid resources
Net decrease in short-term investments 40 244 378
Financing
Proceeds from issue of shares - 2 2
Net increase/(decrease) in borrowings 69 87 (158)
---------------------------- -------- -------- -------------
Net cash inflow/(outflow) from financing 69 89 (156)
(Decrease)/increase in cash (111) 31 86
---------------------------- -------- -------- -------------
Reconciliation of net cash flow to movement in net debt (unaudited)
Six months to Year to 31
30 June December
#m #m #m
--------------------------- -------- -------- -------------
(Decrease)/increase in cash (111) 31 86
Cash (inflow)/outflow from movement in (69) (87) 158
borrowings
Cash inflow from movement in liquid (40) (244) (378)
resources -------- -------- -------------
----------------------------
Change in net (debt)/funds resulting from (220) (300) (134)
cash flows
Net funds arising on acquisitions - - 1
Translation differences (12) (41) (71)
---------------------------- -------- -------- -------------
Movement in net (debt)/funds (232) (341) (204)
Opening net (debt)/funds (66) 138 138
---------------------------- -------- -------- -------------
Closing net debt (298) (203) (66)
---------------------------- -------- -------- -------------
Net cash inflow from operating activities (unaudited)
Six months to Year to 31
30 June December
2003 2002 2002
#m #m #m
---------------------------- -------- -------- -------------
Operating profit/(loss) 61 (25) (144)
Depreciation 104 113 227
Amortisation and impairment of goodwill and
other intangibles
50 59 315
Decrease/(increase) in stocks 1 (2) 2
(Increase)/decrease in debtors (69) (25) 241
Decrease in creditors (47) (162) (314)
Loss on disposal of fixed assets - 4 1
Amortisation of interests in own shares 6 8 3
Other, principally translation differences (13) 20 24
---------------------------- -------- -------- -------------
Net cash inflow/(outflow) from operating 93 (10) 355
activities -------- -------- -------------
----------------------------
Consolidated balance sheet at 30 June 2003 (unaudited)
30 June 31 December
2003 2002 2002
#m #m #m
---------------------------- -------- -------- -------------
Fixed assets 1,467 1,885 1,516
Stocks 2 5 1
Debtors 1,369 1,436 1,279
Cash and short-term investments 586 900 728
Creditors (2,248) (2,395) (2,198)
---------------------------- -------- -------- -------------
Net current liabilities (291) (54) (190)
Provisions (281) (291) (245)
Long-term creditors (285) (417) (354)
---------------------------- -------- -------- -------------
Net assets 610 1,123 727
---------------------------- -------- -------- -------------
Capital and reserves
Called-up share capital and share premium 449 449 449
Capital redemption reserve 1 1 1
Other reserve (1,717) (1,717) (1,717)
Profit and loss account reserve 1,659 2,241 1,763
---------------------------- -------- -------- -------------
Shareholders' equity 392 974 496
Equity minority interest 218 149 231
---------------------------- -------- -------- -------------
Capital employed 610 1,123 727
---------------------------- -------- -------- -------------
Reconciliation of movement in shareholders' funds for the six months to 30 June
2003 (unaudited)
Six months to Year to 31
30 June December
#m #m
---------------------------- -------- -------- -------------
Loss for the period (50) (126) (543)
Unrealised gain on deemed partial disposal of - 1 1
subsidiary
Unrealised gain on deemed partial disposal of - 12 12
associate
Unrealised gain on disposal of fixed asset - 10 10
investment
Translation differences taken directly to (54) (34) (95)
reserves
Shares issued during the period - 2 2
---------------------------- -------- -------- -------------
Net movement in shareholders' equity (104) (135) (613)
Opening shareholders' equity 496 1,109 1,109
---------------------------- -------- -------- -------------
Closing shareholders' equity 392 974 496
---------------------------- -------- -------- -------------
Notes to the interim results for the six months to 30 June 2003 (unaudited)
1. Basis of preparation
The above financial information has been prepared on a basis consistent with the
accounting policies set out on pages 63 and 64 of Reuters Group PLC 2002 Annual
Report and Form 20-F.
The unaudited financial statements should be read in conjunction with the 2002
annual accounts. The results for 2002 do not comprise statutory accounts within
the meaning of section 240 of the UK Companies Act 1985 but are an abridged
version of the statutory accounts for that year which have been delivered to the
Registrar of Companies. The auditors' report on the statutory accounts was
unqualified and did not contain a statement made under section 237 (2) or
section 237 (3) of the UK Companies Act 1985.
2. Segmental analysis
The segmental analysis of revenue, costs and profit reflects the way in which
the Group is managed. During 2003, management responsibility for certain costs
has changed and prior periods have been restated on a comparable basis. Reuters
revenue is managed on a customer segment basis and is allocated to customer
segments by reference to the activities at particular customer sites. Activities
at certain customer sites fall into more than one segment. In such cases revenue
is allocated based on estimated activity by segment.
Six months to % Change Year to 31
30 June December
2003 2002 Actual Underlying 2002
Revenue #m #m #m
------------------ -------- -------- ------ -------- ---------
Treasury 513 577 (11%) (9%) 1,134
Investment Banking 362 434 (17%) (16%) 834
Asset Management 321 367 (13%) (12%) 709
Corporates and Media 153 164 (7%) (6%) 315
------------------ -------- -------- ------- --------- ---------
Reuters 1,349 1,542 (13%) (12%) 2,992
Instinet 275 301 (9%) (1%) 592
----------------- -------- -------- ------ -------- ---------
1,624 1,843 (12%) (10%) 3,584
Share of joint 51 51 - 11% 107
ventures revenue
Intra-group revenue (4) (5) (25%) (23%) (9)
----------------- -------- -------- ------ -------- -------------
Gross revenue 1,671 1,889 (12%) (9%) 3,682
----------------- -------- -------- ------ -------- -------------
Less share of joint
ventures revenue
(51) (51) - 11% (107)
----------------- -------- -------- ------ -------- -------------
Group revenue 1,620 1,838 (12%) (10%) 3,575
----------------- -------- -------- ------ -------- -------------
2. Segmental analysis (continued)
Six months to % Change Year to 31
30 June December
2003 2002 Actual Underlying 2002
Costs #m #m #m
----------------- -------- -------- ------ -------- -------------
Customer segments (125) (158) (20%) (21%) (299)
Channels (503) (592) (15%) (13%) (1,135)
Content (43) (44) (4%) (3%) (88)
Development (92) (120) (24%) (22%) (234)
Technical (198) (194) 2% 6% (392)
Operations
Chief Information (36) (53) (31%) (30%) (95)
Office
Editorial (99) (110) (11%) (8%) (218)
Business Support (28) (32) (13%) (14%) (68)
Services
Corporate/other (27) (44) (39%) (37%) (70)
----------------- -------- -------- ------ -------- -------------
Reuters (1,151) (1,347) (15%) (13%) (2,599)
Instinet (271) (306) (11%) 1% (606)
----------------- -------- -------- ------ -------- -------------
(1,422) (1,653) (14%) (11%) (3,205)
Restructuring costs (79) (100) (20%) (22%) (112)
- Reuters
- Instinet (12) (56) (79%) (78%) (96)
Intra-group costs 4 5 (25%) (23%) 9
----------------- -------- -------- ------ -------- -------------
(1,509) (1,804) (16%) (13%) (3,404)
Amortisation of
goodwill and other (50) (59) (15%) (15%) (107)
intangibles
Impairment of goodwill - - - - (208)
----------------- -------- -------- ------ -------- -------------
Operating costs (1,559) (1,863) (16%) (14%) (3,719)
Operating profit/(loss) 61 (25) - - (144)
----------------- -------- -------- ------ -------- -------------
3. Revenue by type - Reuters
Six months to % Change Year to 31
30 June December
2003 2002 Actual Underlying 2002
#m #m #m
----------------- -------- -------- ------ -------- ------------
Recurring 1,255 1,405 (11%) (10%) 2,707
Outright 43 71 (39%) (43%) 163
Usage 51 66 (22%) (10%) 122
----------------- -------- -------- ------ -------- -------------
Total Reuters 1,349 1,542 (13%) (12%) 2,992
----------------- -------- -------- ------ -------- -------------
4. Cost by type - Reuters
Six months to % Change Year to 31
30 June December
2003 2002 Actual Underlying 2002
#m #m #m
------------------ -------- -------- ------ -------- -------------
Staff (476) (536) (11%) (11%) (1,024)
Services (222) (288) (23%) (20%) (547)
Depreciation (82) (90) (9%) (10%) (179)
Data (144) (164) (12%) (11%) (320)
Communications (178) (183) (3%) 4% (378)
Space (87) (104) (17%) (15%) (197)
Other 38 18 108% 112% 46
------------------ -------- -------- ------ -------- -------------
Costs before (1,151) (1,347) (15%) (13%) (2,599)
restructuring and
goodwill
Restructuring (79) (100) (20%) (22%) (112)
------------------ -------- -------- ------ -------- -------------
Amortisation and
impairment of
goodwill and other
intangibles
(44) (44) (2%) (2%) (86)
------------------ -------- -------- ------ -------- -------------
Reuters operating (1,274) (1,491) (15%) (13%) (2,797)
costs
------------------ -------- -------- ------ -------- -------------
Summary of financial results for the six months to 30 June 2003 in US dollars
The following information is provided for the convenience of US shareholders.
Summary headline figures from the financial results for the six months to 30
June 2003, as prepared under UK GAAP and in sterling, have been translated into
US dollars. For convenience all figures (including comparatives) have been
converted at #1 = US$1.65, the rate prevailing on 30 June 2003.
Six months to Year to 31
30 June December
2003 2002 2002
$m $m $m
--------------------- -------- -------- -------------
Treasury 847 952 1,871
Investment Banking 598 717 1,377
Asset Management 529 606 1,170
Corporates and Media 252 270 519
--------------------- -------- -------- -------------
Reuters 2,226 2,545 4,937
Instinet 453 496 977
Intra-group (6) (8) (15)
--------------------- -------- -------- -------------
Revenue 2,673 3,033 5,899
--------------------- -------- -------- -------------
Reuters 124 83 311
Instinet (25) (125) (548)
--------------------- -------- -------- -------------
Operating profit/(loss) 99 (42) (237)
--------------------- -------- -------- -------------
Reuters 68 (8) (202)
Instinet (42) (137) (611)
--------------------- -------- -------- -------------
Profit/(loss) on ordinary activities before 26 (145) (813)
taxation -------- -------- -------------
---------------------
Reuters 327 321 648
Instinet 6 (9) (23)
--------------------- -------- -------- -------------
Normalised operating profit before 333 312 625
restructuring -------- -------- -------------
---------------------
Reuters (131) (164) (185)
Instinet (20) (92) (159)
--------------------- -------- -------- -------------
Restructuring costs (151) (256) (344)
--------------------- -------- -------- -------------
Reuters 196 157 463
Instinet (14) (101) (182)
--------------------- -------- -------- -------------
Normalised operating profit 182 56 281
--------------------- -------- -------- -------------
Reuters 152 77 319
Instinet (9) (94) (173)
--------------------- -------- -------- -------------
Normalised profit/(loss) before taxation 143 (17) 146
--------------------- -------- -------- -------------
Reconciliation of Instinet results for the six months to 30 June 2003
The following is a reconciliation of the unaudited results for the six months to
30 June 2003 under US GAAP as released by Instinet on 21 July 2003, to the
numbers reported under UK GAAP.
Revenue Loss before
taxation
Per Instinet results - US GAAP (US$m) 525 (45)
Adjustments to UK GAAP
- Soft dollar commission (99) -
- Interest (11) -
- Mark-to-market of investments/impairments 19 (2)
- Goodwill amortisation - 2
- Other, including currency translation 9 5
----------------------- ------------ -------------
Instinet results - UK GAAP (US$m) 443 (40)
----------------------- ------------ -------------
Instinet results - UK GAAP (#m) 275 (25)
----------------------- ------------ -------------
An exchange rate of US$1.61 has been used, being the average for the six months
to 30 June 2003.
Explanation of adjustments
Revenue
A significant part of the adjustment from US GAAP to UK GAAP relates to soft
dollar, primarily relating to the purchase of third party research products, as
well as payments made as part of Instinet's commission recapture services. Under
US GAAP, Instinet reports its transaction fee revenue from these businesses on a
gross basis. Under UK GAAP these revenues and costs are not grossed up but are
netted against each other.
Other revenue adjustments include interest income and mark-to-market gains and
losses on investments held at the balance sheet date, all of which are not
included as revenue under UK GAAP.
Loss before taxation
Adjustments to loss before taxation include impairment of investments, goodwill
amortisation, stock based compensation costs and currency translation
differences.
Revenue analysis - second quarter 2003
Three months to Year to
30 June % Change 31 December
2003 2002 Actual Underlying 2002
#m #m #m
-------------------- ------- ------ ------- -------- -----------
Reuters Group revenue
summary
Reuters 679 780 (13%) (13%) 2,992
Instinet 145 148 (2%) 5% 592
-------------------- ------- ------ ------- -------- -----------
824 928 (11%) (10%) 3,584
Share of joint ventures 26 24 7% 18% 107
revenue
Intra-group revenue (2) (2) (20%) (17%) (9)
-------------------- ------- ------ ------- -------- -----------
Gross revenue 848 950 (11%) (9%) 3,682
Less share of joint (26) (24) 7% 18% (107)
ventures revenue ------- ------ ------- -------- -----------
--------------------
Group revenue 822 926 (11%) (10%) 3,575
-------------------- ------- ------ ------- -------- -----------
Reuters
Revenue analysis by
type
Recurring 631 704 (10%) (11%) 2,707
Outright 22 43 (47%) (51%) 163
Usage 26 33 (21%) (4%) 122
-------------------- ------- ------ ------- -------- -----------
Reuters revenue 679 780 (13%) (13%) 2,992
-------------------- ------- ------ ------- -------- -----------
Revenue analysis by
segment
Treasury 256 289 (12%) (11%) 1,134
Investment Banking 184 221 (17%) (17%) 834
Asset Management 161 188 (14%) (15%) 709
Corporates and Media 78 82 (5%) (4%) 315
-------------------- ------- ------ ------- -------- -----------
Reuters revenue 679 780 (13%) (13%) 2,992
-------------------- ------- ------ ------- -------- -----------
Revenue analysis by quarter
#m 2002 2003
Revenue Q1 Q2 Q3 Q4 Q1 Q2
----------------- -------- ------- -------- ------- -------- -------
Recurring 258 255 247 240 232 229
Outright 16 20 11 33 10 11
Usage 14 14 13 13 15 16
----------------- -------- ------- -------- ------- -------- -------
Treasury 288 289 271 286 257 256
----------------- -------- ------- -------- ------- -------- -------
Recurring 188 191 172 175 164 170
Outright 8 13 10 18 7 7
Usage 17 17 14 11 7 7
----------------- -------- ------- -------- ------- -------- -------
Investment Banking 213 221 196 204 178 184
----------------- -------- ------- -------- ------- -------- -------
Recurring 174 178 161 161 155 157
Outright 4 9 9 10 4 4
Usage 1 1 1 - 1 -
----------------- -------- ------- -------- ------- -------- -------
Asset Management 179 188 171 171 160 161
----------------- -------- ------- -------- ------- -------- -------
Recurring 81 80 74 72 73 75
Outright - 1 1 - - -
Usage 1 1 3 1 2 3
----------------- -------- ------- -------- ------- -------- -------
Corporates and Media 82 82 78 73 75 78
----------------- -------- ------- ------- ------- ------- -------
Reuters 762 780 716 734 670 679
US 118 115 110 126 107 128
International 35 33 31 24 23 17
----------------- -------- ------- ------- ------- ------- -------
Instinet 153 148 141 150 130 145
Intra-group (3) (2) (2) (2) (2) (2)
----------------- -------- ------- ------- ------- ------- -------
Total revenue 912 926 855 882 798 822
----------------- -------- ------- ------- ------- ------- -------
Reuters product statistics - period to 30 June 2003
Six months Three months
ended ended
30 June 2003 30 June 2003
% change % change
underlying underlying
vs June 2002 vs March 2003
------------------ ------- ---------- ------- -----------
Period end user accesses
(000's)
3000 Xtra/Bridge Premium 78 17% 78 2%
Dealing 17 (6%) 17 (2%)
------- ---------- ------- -----------
Premium Products 95 12% 95 1%
2000/3000 Series 85 (25%) 85 (9%)
Mid & Low Tier 278 (18%) 278 (1%)
------------------ ------- ---------- ------- -----------
Total 458 (15%) 458 (2%)
------------------ ------- ---------- ------- -----------
Average user accesses (000's)
Premium Products 95 12% 95 1%
2000/3000 Series 92 (26%) 90 (7%)
Mid & Low Tier 289 (19%) 279 (4%)
------------------ ------- ---------- ------- -----------
Total 476 (16%) 464 (4%)
------------------ ------- ---------- ------- -----------
Recurring revenue (#m)
Premium Products 357 10% 185 1%
2000/3000 Series 203 (33%) 97 (11%)
Mid & Low Tier 140 (9%) 66 (4%)
------- ---------- ------- -----------
700 (10%) 348 (4%)
Other recurring revenue 555 (10%) 283 (2%)
------------------ ------- ---------- ------- -----------
Total 1,255 (10%) 631 (3%)
------------------ ------- ---------- ------- -----------
Monthly revenue per access (#)
Premium Products 629 (2%) 648 -
2000/3000 Series 369 (9%) 360 (4%)
Mid & Low Tier 81 12% 79 -
------------------ ------- ---------- ------- -----------
Average monthly revenue per 245 7% 250 -
access
------------------ ------- ---------- ------- -----------
Instinet business statistics
2003 2002 % Change
------------------------- --------- --------- ---------
Six months total market volumes (million)
NYSE 242,599 211,283 15%
Nasdaq 201,539 226,275 (11%)
----------------------- --------- --------- ---------
Six months total Instinet volumes (million)
NYSE 10,269 6,189 66%
Nasdaq 58,337 28,192 107%
----------------------- --------- --------- ---------
Six months average market share
NYSE 4.2% 2.9%
Nasdaq 28.9% 12.5%
----------------------- --------- --------- ---------
Q2 average market share
NYSE 4.0% 2.8%
Nasdaq 28.4% 13.8%
----------------------- --------- --------- ---------
Q2 average net equity transaction fee revenue
(US cents per share per side)
Total US equity market 0.18 0.38
----------------------- --------- --------- ---------
Forward-looking statements
This document contains certain forward-looking statements within the meaning of
the United States Private Securities Litigation Reform Act of 1995 with respect
to Reuters Group's financial condition, results of operations and business, and
management's strategy, plans and objectives for the Group. In particular, all
statements that express forecasts, expectations and projections with respect to
certain matters, including trends in results of operations, margins, growth
rates, overall financial market trends, anticipated cost savings and synergies
and the successful completion of restructuring programmes are all
forward-looking statements. These statements involve risk and uncertainty
because they relate to events and depend on circumstances that may occur in the
future. There are a number of factors that could cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements. These factors include, but are not limited to:
* Reuters Group's ability to realise the anticipated benefits of its
"Fast Forward" transformation programme
* continued or worsened unfavourable conditions in financial markets
* the impact of currency and interest rate fluctuations on Reuters
Group's reported revenue and earnings
* Reuters Group's exposure to a decline in the valuation of companies in
which it has invested and of its lack of management control over all such
companies
* difficulties or delays that Reuters Group may experience in developing
or responding to new customer demands or launching new products
* the dependency of Reuters Group on third parties for the provision of
certain network and other services
* any significant failures or interruptions experienced by the networks
or systems of Reuters Group and such networks' ability to accommodate increased
traffic
* changes in the regulatory or competitive environment
* adverse governmental action in countries where Reuters conducts
reporting activities
For additional information, please see "Risk Factors" in the Reuters Group PLC
Annual Report and Form
20-F for the year ended 31 December, 2002. Copies of the Annual Report and Form
20-F are available on request from Reuters Group PLC, 85 Fleet Street, London
EC4P 4AJ. Any forward-looking statements made by or on behalf of Reuters Group
speak only as of the date they are made. Reuters Group does not undertake to
update any forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR NKBKNDBKKPOB
1 Year Reuters Chart |
1 Month Reuters Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
