After two years of depressed revenues and profits, London-headquartered global media and information group Reuters on Thursday proclaimed itself on the way out of the woods.
Said chief executive Tom Glocer: "I am confident that we have now passed the inflection point in our recurring revenue decline." However, he cautioned that recovery would not be swift.
Revenues will continue to fall throughout 2004, albeit at a declining rate, with real revenue growth unlikely to be achieved before the second or third quarter of 2005.
But the markets liked Glocer's guarded optimism and Reuters' shares rose 14% to an eighteen-month high of £3.1825. As recently as last July, they languished around the £0.95 mark.
Commented an analyst at stockbroker Charles Stanley: "This morning’s statement gives us considerable confidence that the recovery is in fact well under way."
The rate of subscriber cancellations eased in the final quarter of 2003, continuing a trend set in the early part of Reuters' financial year. Accordingly, the company expects core revenues to fall in the first quarter of this year by 9 per cent “or slightly better” -- comfortably ahead of analysts' consensus expectation of up to 11%.
The woes of Reuters, which has a worldwide network of 445,000 screens, reflect the global stockmarket malaise over the past two years. The company has responded to the downturn by cutting costs and introducing new technologies such as Reuters Knowledge, a user-friendly screen that integrates news, data and analysis.
These strategies have helped the firm stage a comeback. But by the end of this year some 5,000 Reuters' staff will have gone to the wall -- equivalent to 25% of its workforce.
Data sourced from: Times Online (UK); additional content by WARC staff