LONDON (Brand Republic) - Shares in media group Reuters soared 18p this morning after the company reassured investors that the effect of the economic slowdown on the company’s performance would be minimal.
Yesterday, Reuters’ share price fell 7% when it warned that it expected to suffer slower growth in the second quarter of 2001 as it posted its first-quarter results.
However, CEO Peter Job allayed shareholder concerns by emphasising that the slowdown would only be slight. He said the company was on track to make annual cost savings of £150m by migrating its business on to the internet.
First-quarter revenues climbed 17% year on year to £970m, hitting the top end of analyst expectations of between £960m and £975m.
Strong performances by its financial division and Instinet, its electronic brokering arm, drove the growth with revenue increases of 11% and 27% respectively. Reuters is preparing to float 14% of Instinet, despite the weak economic climate for technology stocks.
The company did not release profit figures, preferring to report them only twice a year.
Reuters is currently bidding for part of Bridge Information Systems, which collapsed in February. Reuters said its position had been helped by the fall of its US rival.
Yesterday, Reuters shareholders were up in arms about a share option package for incoming CEO Tom Glocer, who will succeed Job when he retires in July.
More than 25% of Reuters shareholders opposed the plan to award Glocer annual share options worth more than seven times his salary, which could bring his total salary to £4m next year.
Reuters defended the share option scheme, saying that it was a multinational company that was finding it difficult to attract and retain good staff, particularly in the US.