Reuters, the electronic information group, beat market expectations on Tuesday as it returned to underlying profit despite continued erosion of its core subscription revenues.
The world's leading provider of news and market data reported pre-tax profits before amortisation and exceptionals of £87.3m ($139.9m) in the first half, compared with a loss of £10m last year, despite recurring revenues falling 10 per cent to £1.26bn, in line with expectations. Total revenues were 12 per cent lower at £1.35bn.
Analysts were expecting profits of between £30m and £50m.
Tom Glocer, chief executive, said the improvement was due to "real discipline in managing the cost base and favourable currency movements" and added that he was narrowing Reuters' target for annual recurring revenues to a decline of 11 per cent from an earlier prediction of a 10-12 per cent fall.
Reuters also had better news in its battle with US rival Bloomberg, annoucing that it had clinched big contracts with Goldman Sachs and Lehman Brothers.
However, Mr Glocer remained cautious on market conditions for the rest of the year, especially in Europe.
The group has been hit by a severe downturn in demand for its information-screen subscriptions to banks, brokerages and fund managers worldwide, as they slash costs in the face of three years of stock market decline.
As a result Reuters has also been cutting costs, and on Tuesday Mr Glocer announced that its Fast Forward costs savings plan was ahead of schedule, with £30m of the £45m forecast this year already delivered, and raised the target to £55m. He also said he expected to better last year's 13.1 per cent margin figure.
Reuters said restructuring, which included several hundred redundancies, cost £79m in the first six months of the year.
The group also reported improvement at Instinet, its partly-owned New York brokerage company, where cost-cutting also helped reduce pre-tax losses to £25m from £83m. Revenues fell to £275m from £301m, but the second quarter showed an 11 per cent improvement on the previous three months.
The shares fell 3 per cent to 211½p in early morning trade.
The world's leading provider of news and market data reported pre-tax profits before amortisation and exceptionals of £87.3m ($139.9m) in the first half, compared with a loss of £10m last year, despite recurring revenues falling 10 per cent to £1.26bn, in line with expectations. Total revenues were 12 per cent lower at £1.35bn.
Analysts were expecting profits of between £30m and £50m.
Tom Glocer, chief executive, said the improvement was due to "real discipline in managing the cost base and favourable currency movements" and added that he was narrowing Reuters' target for annual recurring revenues to a decline of 11 per cent from an earlier prediction of a 10-12 per cent fall.
Reuters also had better news in its battle with US rival Bloomberg, annoucing that it had clinched big contracts with Goldman Sachs and Lehman Brothers.
However, Mr Glocer remained cautious on market conditions for the rest of the year, especially in Europe.
The group has been hit by a severe downturn in demand for its information-screen subscriptions to banks, brokerages and fund managers worldwide, as they slash costs in the face of three years of stock market decline.
As a result Reuters has also been cutting costs, and on Tuesday Mr Glocer announced that its Fast Forward costs savings plan was ahead of schedule, with £30m of the £45m forecast this year already delivered, and raised the target to £55m. He also said he expected to better last year's 13.1 per cent margin figure.
Reuters said restructuring, which included several hundred redundancies, cost £79m in the first six months of the year.
The group also reported improvement at Instinet, its partly-owned New York brokerage company, where cost-cutting also helped reduce pre-tax losses to £25m from £83m. Revenues fell to £275m from £301m, but the second quarter showed an 11 per cent improvement on the previous three months.
The shares fell 3 per cent to 211½p in early morning trade.
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