By: (AP) Reuters Group PLC, the news and financial data provider, said today its earnings soared in 2004, citing the impact of a cost-cutting program and gains on the sale of assets.
Net profit rose to 352 million pounds ($666 million) from 50 million pounds in 2003, bolstered by gains from asset sales, including the company's stake in Tibco Software Inc.
Sales at the London-based company slumped 11 percent to 2.9 billion pounds ($5.5 billion) from 3.3 billion pounds a year ago.
Reuters has struggled to increase sales against fierce competition from Bloomberg LP and Thomson Financial, while mergers and consolidations in the banking industry have reduced demand for its financial products among banks.
In response, chief executive Tom Glocer has led a reorganization of the company, moving jobs to lower-cost regions such as India and selling off assets.
"We have got a good amount to do in 2005, but we are quite well positioned," Glocer said. He added that Reuters will start looking "beyond recovery to growth" in 2005.
Asset sales contributed profit of 223 million pounds ($422 million) over 2004, Reuters said. The company has targeted total savings of 440 million pounds ($833 million) from the restructuring plan, dubbed Fast Forward, by the end of 2006.
Chief Financial Officer David Grigson said that the sale of the Radianz networks business to BT Group PLC is taking a "little bit longer to put together," but said that he is confident that Reuters will hit the savings target.
The company is also considering the sale of Instinet Group Inc., its online brokerage. Archipelago Holdings Inc., operator of the ArcaEx electronic exchange, appears to be the front-runner to acquire the unit for up to $3 billion.
Asked about possible acquisitions, Glocer said the company "continues to look at niche content assets" that are a good fit with Reuters.
The company has been focused on buying content assets, such as Fitzrovia International, a research company it picked up in October that specializes in total expense ratio analysis for funds outside the United States.
The company said it will book a charge of 80 million pounds ($151 million) this year as part of its cost-cutting program. The figure is higher than originally expected because it includes one-off expenditure for relocating the group's London operations to a new site.
The company repeated a forecast made last month that the fall in sales would slow to around 1.5 percent in the first quarter of 2005, which would mark the smallest recurring revenue decline in three years.
Glocer declined to comment on when the company expects recurring revenues to turn positive, a scenario most analysts predict will come in the second half of the year.
Reuters shares were down 1 percent to 403.5 pence ($7.64) in trading on the London Stock Exchange.
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