Reuters profits decline

July 24, 2001 Posted: 1202 GMT

LONDON (CNN) -- Reuters, the world's largest news and financial data provider, said on Tuesday net profit fell 20 percent and it plans to cut 1,340 jobs.

The UK-based company said first-half net profit fell to £269 million ($382 million), or 19.1 pence per share, from £340 million, or 24.3 pence a share, in the year-ago period, as revenues rose 14 percent to £1.9 billion.

The company said increased profits from its divisions were offset by higher restructuring costs and start-up losses from joint ventures. It also expects slower market conditions to continue for the rest of 2001.

Reuters said pretax profit fell 21 percent to £357 million from £450 million in the same six months of 2000.

The company said operating profit before goodwill amortisation, one-time items and restructuring costs, rose 6 percent to £330 million from £312 million a year ago, in line with expectations.

                                     Jobs to go in overhaul

Reuters plans to cut 1,100 jobs across its divisions as part of its cost-saving measures and a further 240 jobs at its Instinet trading platform in which it still holds 85 percent stake after an initial public offering.

The company's own news service described the job cuts as "one of the  biggest rounds of lay-offs in the company's 150-year history." Reuters employs 16,500 people and the job cuts affect 7 percent of the workforce.

"Reuters expects to see growth from its core Reuters Financial business in the second half, although the rate will slow as a result of market conditions," a statement said.

Revenue growth continued to be driven by sales of  3000 Xtra, its flagship financial information moniter it sells to financial institutions. More than 21,000 were installed by the end of June compared with 10,800 installed on December 31, 2000, it said.

Instinet's revenue rose 27 percent to £482 million, as operating profit at the share trading platform improved 28 percent to £108 million.

Reuters said Instinet's share of the U.S. equities trading market rose to a record 10.3 percent in the second quarter, compared with 9.2 percent in the same quarter a year ago.

Nasdaq's market share of the U.S. equities trading market was 15.3 percent in the second quarter, up from 13.6 percent a year ago.

The earnings were the first overseen by new Chief Executive Tom Glocer, former head of the company's U.S. operations, who succeeded Peter Job.

"We are accelerating the business transformation programme and taking new actions to drive profit growth in the slower market conditions we expect to continue through the end of the year," Glocer said.

Shares in Reuters (LSE:RTR] fell 9.3 percent to 713 pence in midday London trading after the results were announced.

New York-listed Reuters (RTRSY: Research, Estimates) shares closed up 0.30 percent at $66.70 on Monday

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