Sales at Reuters allay fears of fall in demand

Click to follow
Sales at Reuters rose by 25 per cent in the first three quarters of 1994.

The news allays fears that troubles in the financial sector, where volatile markets have depressed profits, would lead to cost-cutting at banks and a fall in demand for Reuters' products.

Shares in the pounds 7.4bn information company have fallen 13 per cent from 514p to 447p since 1 September.

Demand for media products increased 9 per cent in the nine months to September 30 while demand for transaction products rose by 38 per cent.

The figures were distorted by the acquisition in March of Quotron, the American provider of real-time equity quotes and analysis, and Teknekron Software Systems, a US supplier, for a total of pounds 42m. Underlying growth was put at 17 per cent for the quarter and 16 per cent for the nine months.

A star performing product was Instinet, the equity transaction system, which has seen European business grow fivefold in the last year.

A cautious note about future sales was struck by Peter Job, chief executive, who warned that growth in demand for information products had not been as fast as previous months.

'New order rates for information products, though below the recent peaks we have seen, were brisk,' he said. Demand for transaction products remained strong.

The figures were greeted enthusiastically by the market and Reuters shares gained 30p to close at 477p.

Analysts said the results confirmed that underlying growth rates were declining, but no faster than anticipated.

'Our fears have been allayed,' said Lucy Broke, media analyst at James Capel.