March 6, 2008 / 7:15 AM / 10 years ago

Reuters 2007 trading profit rises to $762 million

LONDON (Reuters) - News and financial information provider Reuters RTR.L said 2007 trading profit rose to 385 million pounds ($762 million) and 2008 had started well.

A general view of the Reuters building in the Canary Wharf district of London, May 4 2007. News and financial information provider Reuters said 2007 trading profit was $762 million and 2008 had started well. REUTERS/Simon Newman

“Early indications for 2008 are encouraging despite the uncertain market environment, with strong sales momentum reflecting the robustness of the Reuters business mix,” the company said in a statement on Thursday.

Underlying revenue growth in the first quarter is expected to be around 9 percent, it added.

Revenue for the year to end-December rose 7 percent on an underlying basis to 2.605 billion pounds. Reuters was forecast to have revenues of 2.608 billion pounds, according to a poll of 10 analysts by Reuters Estimates.

Reuters is being taken over by Canadian electronic publisher Thomson Corp TOC.TO in a deal due to complete on April 17. This will make the 2007 results Reuters last as an independent company.

Reuters said in an update on February 29 that its 2007 earnings before interest and tax — or trading profit — would be no less than 380 million pounds. Reuters said the figure was up 43 percent on underlying basis and 25 percent higher compared with a trading profit in 2006 of 308 million pounds.

Reuters Chief Executive Tom Glocer, who will head the combined business, said Reuters performance benefited from its relatively limited exposure to areas in investment banks like asset-backed, leveraged loans, mortgage and fixed income trading desks where widespread job cuts had occurred.

Reuters business in foreign exchange, commodities, energy and emerging markets “have been really good areas for us,” Glocer said in a conference call with reporters.

“This does not mean we are immune...but it is one reason why you see an uncoupling at least to date of the performance,” Glocer said.

Numis Securities analysts said that as a subscription business Reuters was expected to hold up well in 2008, although it was clearly susceptible to a financial services industry downturn in 2009-2010.

A general view of the Reuters building in the Canary Wharf district of London, May 4 2007. News and financial information provider Reuters said 2007 trading profit was $762 million and 2008 had started well. REUTERS/Simon Newman

The combined business, which will be called Thomson Reuters, will span legal, financial services, tax and accounting, scientific, healthcare and media markets.

Thomson has already announced its results and both companies hold shareholder meetings to approve the deal on March 26.

Reuters said guidance for the enlarged group would be given with its first-quarter results on May 1.

Reuters Chief Operating Officer Devin Wenig, who will head the combined Thomson Reuters markets division said: “At this point in the year we have not seen a sales slowdown.”

He added that the sale of various financial databases required by regulators as part of their approval of the takeover had attracted “strong interest from over dozen parties.”

Wenig said he was confident these deals would complete shortly, although both companies do not have to do this before the takeover closes next month.

Under the terms of the deal, Thomson Reuters will have two parent companies via a dual-listed structure in New York and London. Thomson Reuters shares will also continue to trade on the Toronto exchange.

Thomson announced its takeover in May with a deal that will see Reuters shareholders get 352-1/2 pence in cash and 0.16 of one Thomson share for each Reuters share held.

The Reuters logo is seen on the Reuters Building at Canary Wharf in London March 6, 2008. REUTERS/Toby Melville

The deal values Reuters at around 620 pence per share, or 7.7 billion pounds, based on the current value of the two companies shares.

Reuters shares were down 0.4 percent at 590.5 pence in early trading.

Reporting by Gavin Haycock; Editing by Alexander Smith

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