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Reuters resultaten 1999: Winststijging 10,7 procent

Datum nieuwsfeit: 08-02-2000
Bron: Razende Robot Reporter
Zoek soortgelijke berichten

Geachte Redactie

Bijgaand het persbericht van Reuters betreffende de fin. resultaten van 1999. Tevens treft u aan de nieuwe strategie van Reuters t.a.v Internet . als mede een aantal belangrijke wijzigingen in de Raad van Bestuur.

Financials :
De netto winst nam toe met 10,7% tot 425 miljoen Pond bij een omzetstijging van 4% tot 3,16 miljard Pond.

De opbrengsten uit financiele informatie en handels systemen stond onder druk door de fusies in de financiele wereld alsmede door uitgestelde aankopen in verband met het jaar 2000. Dit zal ook nog effect hebben op de resultaten in het eerste kwartaal van 2000.

In de komende 2 jaren worden de afdelingen 'Informatie', 'Trading systems' en 'Global Sales en Operations'samengevoegd, waar ca 300 miljoen Pond mee is gemoeid. Ook wordt 50 miljoen Pond per jaar geinvesteerd in de ontwikkeling van Internet technologie.

In 2000 zullen de resultaten aanzienlijk lager zijn dan in 1999 in verband met het treffen van herstructureringsvoorzieningen. Dit komt over de hele linie in de groeps- resultaten tot uitdrukking. Ook zal het resultaat van de grope worden beinvloed door het versneld uitvoeren van een aantal investeringsprogramma's.

Voor onderdelen van het Greenhouse Fund worden de mogelijkheden van een beursgang verder onderzocht. Het betreft hier participaties in Internet en technologie bedrijven. Ook met betrekking tot Instinet worden de strategische alternatieven actief bekeken waaronder de mogelijkheid van een beursgang. Voor nadere informatie :

Met vriendelijke groeten/ Kind regards tel.:+31.23.547.07.97 ; fax +31.23.547.12.39

Effect adviesgroep, The Netherlands


Reuters Group PLC
Highlights of the Preliminary Results
for the year ended 31 December 1999

8 February 2000 No. 03/00

· Pre-tax profit up 9%, EPS up 13% to 30.2p.

· Underlying revenue up 4% (up 2% ex-currency).

· Operating profit ex-currency up 3%.

· EBITDA up 5% (up 6% ex-currency) to £1 billion for the first time.

· Final dividend in line with prior year at 11.0p.

· £500 million to be spent over four years on Internet migration.

· Initiatives will accelerate use of internet technology, open new markets and alter business model.

· Cost savings of £150 million a year expected by 2002.

· Advisors appointed for Greenhouse Fund IPO.

· Instinet IPO: one of the options under consideration.

· Future dividends linked to profit from RI/RTS businesses.

· Board and organisation changes.

Summary of Results

The following is a summary of the unaudited results of Reuters Group PLC (NASDAQ symbol: RTRSY) for the year to 31 December 1999:

Year to % change Year to 31 December Actual Comparable 31 December 1999 1999 rates of rates of 1999 1998 £m £m exchange exchange US$m US$m Group revenue 3,125 3,032 3% 1% 5,032 4,881
Operating costs 2,576 2,482 4% 1% 4,149 3,995
Operating profit 549 550 0% 3% 883 886

----------------------------------------------------------------------------------------------------------------------------------------- Profit before taxation 632 580 9% 1,017 935

----------------------------------------------------------------------------------------------------------------------------------------- Basic earnings per
ordinary share 30.2p 26.7p 13%

----------------------------------------------------------------------------------------------------------------------------------------- Earnings per ADS US$ 2.91 US$ 2.58 13%

----------------------------------------------------------------------------------------------------------------------------------------- Dividend per ordinary
share: Interim 3.65p 3.4p 7%
Final 11.0p 11.0p 0%

----------------------------------------------------------------------------------------------------------------------------------------- Number of ordinary
shares ranking for
dividend (millions) 1,402 1,409



· This summary is taken from, and should be read in conjunction with, the attached full preliminary statement and notes.

· For convenience the US dollar equivalents for both years have been converted throughout this news release at US$ 1.61 = £1, a rate prevailing on 31 December 1999.

· The final dividend is payable on 20 April 2000 to ordinary shareholders on the register at 17 March 2000 and on 27 April 2000 to ADS holders on the register at 17 March 2000.

· This news release includes forward-looking statements within the meaning of the US securities laws. For a discussion of factors that could affect future results, reference should be made to the forward-looking statements discussion and Cautionary Statements included in the full preliminary statement on pages 38-40.

· The financial information for the year ended 31 December 1998 does not comprise statutory accounts but has been extracted from the statutory accounts of Reuters Group PLC for that year which have been delivered to the Registrar of Companies. The auditors' report on the statutory accounts was unqualified and did not contain a statement made under section 237 (2) or (3) of the Companies Act 1985. The financial information for the year ended 31 December 1999 does not comprise statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts of Reuters Group PLC for that period will be delivered to the Registrar of Companies in due course.

· Reuters and the sphere logo are the trademarks of the Reuters Group of Companies.

Reuters Internet Strategy

Reuters announces today a range of major initiatives designed to accelerate its use of internet technologies, open new markets and migrate its core business to an internet-based model. Chief Executive Peter Job comments: "The Internet has opened up two big opportunities for Reuters. It has enabled us for the first time to start serving an infinitely wider market, including individuals making financial decisions at home and at work. We estimate that more than 40 million individual users are now looking at our information on 900 websites. It has also allowed us to adopt a more cost-effective model for our base business. The Internet recognises no frontiers and points towards a single global product range which is cheap to deliver, administer and maintain. "To get best advantage from these opportunities we are expanding our capabilities through partnerships and spin-offs where strategically justified. To our broad base of technology and content, we have now added a communications business in partnership with Equant. This makes us one of the few organisations active on the Internet to have achieved this strategic convergence. We have leveraged our investments in leading US-based internet companies to form new partnerships in Europe. The spin-off of TIBCO Software, now capitalised at US$10 billion, has created a major new supplier of internet software. This momentum will continue in the current year." Reuters plans to spend £500 million over the next four years in the migration of its services to internet technology. Other initiatives include the appointment of advisors to prepare for an Initial Public Offering (IPO) of a portion of its Greenhouse Fund in order to build on the success of the Fund at a faster pace. Reuters plans to build a new financial portal to service the consumer finance market. Our intent to form a new venture with Aether Systems, a leading wireless applications service provider in the US, to provide custom wireless solutions to the European market is announced today. The company also announces plans today for a joint venture with Multex, which distributes broker research globally, to create a website to develop a community of private investors in Europe. These are in addition to the formation of the venture with Equant, announced last week, which addresses a new market for a secure financial extranet. It allows Reuters to move products to internet protocol delivery at a faster pace and at the same time will contribute to the remodelling of its cost base. Organisational development
The company is now focused on three business areas. The first, Reuters Financial, will consist of two divisions: Reuters Information (RI) and Reuters Trading Solutions (RTS). RI is being expanded to include the Global Sales and Operations unit. RTS will take on responsibility for relationships with the Group's global accounts. The second is a stand-alone subsidiary, Instinet, the electronic equities and fixed income brokerage. The third, Ventures, is the vehicle for development of new businesses outside the core financial markets. Ventures is to be renamed Reuterspace to reflect the bringing together of businesses operating in new areas. Management changes include the appointment of Philip Green, Chief Executive RTS, to the Board. He will continue to manage RTS. Jean-Claude Marchand will become Chairman of RI and Global Marketing Director. Tom Glocer, who is currently running Reuters business in the Americas, will join the Group Executive as Chief Executive RI. André Villeneuve will leave the Board immediately to focus on Instinet as its Chairman. He will be based in New York. David Ure will also leave the Board in due course to concentrate on his role as Chairman of the new venture with Equant.

Profit before tax, including gains from the sales of investments, was £632 million (US$1,017 million), up 9% at actual exchange rates. Earnings per share rose 13% to 30.2p from 26.7p in 1998. A final dividend of 11p is proposed, making a total for the year of 14.65p, a rise of 2%. Underlying revenue for 1999, excluding Reuters Business Briefing and TIBCO Software, of £3,081 million (US$4,961 million), increased by 4% at actual rates and 2% at comparable rates. Earnings before interest, tax, depreciation and amortisation (EBITDA) were £1,008 million (US$1,622 million), up 5% at actual rates and up 6% at comparable rates. Operating profit at £549 million (US$883 million) was flat at actual rates and up 3% at comparable rates. Growth was held back by lower profits from Reuters Trading Solutions, in part as a result of the millennium freeze, and in part as a result of weak foreign exchange markets. Instinet also substantially increased investment in new projects. Profit on disposals of investments, mainly from the Greenhouse Fund, was £50 million (US$81 million). Net interest payable was £4 million (US$7 million) compared to £2 million (US$3 million) net interest receivable in 1998. Capital expenditure declined by £52 million to £244 million, and acquisitions and investments decreased by £22 million to £135 million. Net funds were £41 million. Reuters successfully completed its millennium transition programme without any significant problem. Incremental costs associated with this in 1999 were £25 million (US$40 million) compared to £31 million (US$50 million) in 1998. Reuters Financial
Reuters Information's revenue increased by 6% at actual rates to £1,619 million (US$2,607 million). Contribution rose 60% at actual rates and the margin improved from 10% to 16%. This improvement reflects the benefit of a one-off improvement in data costs and cost savings associated with the divisional restructuring last year. Sales of Reuters 3000 and domestic products, particularly in the US, showed good growth during the year. Reuters Trading Solutions' revenue declined by 6% at actual rates. Dealing revenue continued to slip as foreign exchange markets experienced further consolidation and lower volumes. Revenue for Financial Enterprise Systems and Risk Management Systems declined in the second half because of customer reluctance to install new systems ahead of the Millennium. Reuters Financial revenue in the second half, and particularly the fourth quarter, was affected by millennium freezes imposed by many customers. The "Millennium Effect" is beginning to unwind, but will still have some impact on installations in the first quarter. The one-off benefit from information data costs in 1999 offset the incremental costs of the Millennium Programme. Reuters Financial will take a reorganisation charge of £300 million over the next two years, of which £150 million is likely to be taken this year. In addition to current spending, Reuters Financial will invest a further £50 million per annum to develop its e-architecture. These two measures, together with a planned rationalisation of development centres, are expected to provide cost savings of £150 million per year by 2002. Instinet
Against a background of significant change in its markets, Instinet achieved revenue growth of 18% overall and 39% in its international business. Strong volume growth in US markets was partly offset by price reductions. Instinet invested £39 million in new product development and a re-branding and advertising campaign which led to a reduction in contribution to £129 million. This increased investment will continue in 2000. Reuters is actively considering its strategic options for Instinet, one of which is an Initial Public Offering. At the same time, Instinet is developing a number of new opportunities including products for the fixed income and retail markets, both of which will be launched in the near future. Reuterspace
Reuterspace will include the following activities: Reuters Media; Reuters Enterprise, for the business-to-business market; Reuters Personal, for the retail finance market; Reuters Mobile; Reuters Greenhouse; and Reuters Partners, to work with, among others, TIBCO Software. This division developed its business with good revenue growth and a range of strategic acquisitions. Reuters Media revenue derived from internet sales grew 226%, at actual rates, while underlying revenue for the division, excluding divestitures, grew 11% at actual rates. Reuters Business Briefing became part of the Factiva joint venture with Dow Jones in July 1999. A Wireless business was created during the year to galvanise new technology and the market for mobile access to data. The acquisitions of The TowerGroup, an IT research and advisory firm, and ORT, a provider of company information in France, have enabled the development of corporate information businesses in both the research and credit markets. The Greenhouse Fund broadened its activity to Europe and Japan. At the year end it had 38 investments, 12 of which had successfully floated. Recent IPOs and the strength of the market have boosted the value of the Fund's quoted investments from £68 million at the end of July 1999 to £438 million at the year end. Associates
Losses and associated goodwill charges for associates in 1999 increased to £17 million, reflecting the creation of the Factiva joint venture and the IPO of TIBCO Software Inc. in the second half. With the addition of results from the venture with Equant, these losses will be higher in 2000. Dividend Policy
Future dividends will be based on the results of Reuters Financial, consisting of RI and RTS, with the intention that payments will be covered at least 1.7 times by underlying earnings, excluding goodwill, as they would have been in 1999. Prospects
Reuters Financial will continue to make progress at constant exchange rates over the next two years. After providing for the restructuring costs in this business, its profits are bound to be significantly lower in 2000. Group profits overall will reflect this as well as the impact of accelerated Group-wide investment programmes. We are confident the range of major initiatives now being implemented will create further value for shareholders.


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