Bottom Line: Reuters' plateau

REUTERS Holdings is a victim of its own success. Yesterday's pounds 245m interim profit figure was bang in line with expectations of pounds 235m- pounds 250m. The 21p markdown in its shares to 459p was due to the company's failure to produce a pleasant surprise that would have enabled analysts to nudge up their forecasts for next year.

After a decade of stunning outperformance - in 1991, its worst year, it delivered earnings growth of more than 10 per cent, compared with a fall of 12 per cent for the market as a whole - Reuters is highly valued, trading at about 18 times 1995 earnings. It should be able to justify that rating, but it is difficult to see anything that will send the rating much higher for the next couple of years or so.

In its core trading business, it will take a little time to milk the maximum from recent acquisitions such as Quotron, the equities service, (which may eventually turn out to be the buy of the century) and Teknekron, the digital trading system supplier.

It is also likely to be 18 months or so before the potential profitability of its new media experiments, a highly promising string to its bow, become clear.

It has placed a few toes in the programming water - sensibly, since it seems increasingly clear that the profits from this new world will lie in programming rather than the ownership of broadcasting systems.

Its investment in Independent Television News and its experiments in radio all bode well and it is easy to see the power Reuters could exercise given its existing position as a pivotal supplier of raw news and pictures.

None the less, such promise remains as yet a gleam in the eye of Peter Job, chief executive. Buyers can afford to bide their time a while yet.