Reuters in the black despite drop in revenues

Reuters returned to the black last year and signalled early signs that sales declines at the media and technology group had started to bottom out. However, in an illustration of how tough life still is for the group, total revenue in 2003 was down 11 per cent at £2.6bn.

Tom Glocer, the chief executive of Reuters, said the company faced a cost-cutting led recovery, having completed one year of a three-year recovery plan. Revenues are not expected to turn positive until 2006.

The company has been rocked by the collapse in spending by investment banks since the global economy went into reverse in 2001. Its shares were also hit by the crash in technology-related market, which began to recover last year.

Yesterday Mr Glocer was able to report pre-tax profits of £49m compared with a loss of £493m in 2002. Recurring revenues, a measure of Reuters' organic growth, was down 9.3 per cent during 2003 to £2.45bn compared with 2002. This measure was on its subscription products, which account for 92 per cent of Reuters' core income. The year-on-year fall in the fourth quarter for this measure was down 9.8 per cent compared with a fall of 10.9 per cent on the preceding quarter, suggesting a fragile recovery.

The number of user accesses on its products was 427,000, down 11 per cent on 2002. This figure showed a slowing rate of decline during the year, falling just 1 per cent in the final three months. Average revenue per access was up 3 per cent over the course of the year with the main driver being upgrades to its core Reuters 3000 Xtra terminals, which are used widely in the investment banking industry.

Although revenues were down, Mr Glocer was confident the business was in a healthy shape. "We are looking at a gradual recovery," he said.

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