Reuters Group has raised its 2006 revenue outlook and boosted its dividend for the first time in five years, signalling confidence that new investment will deliver growth as expected in the next few years.
The London-based company, which sells news and data to the financial community, said today it expected revenue to increase between 5 percent and 6 percent on a constant currency basis, compared with a previous forecast of about 5 percent, after it posted a first-half gain of 9 percent.
Reuters cited acquisitions and a higher-than-expected revenue share from exchanges for selling their data to clients as reasons for the increase in its full-year outlook.
"The revenue picture looks quite good, but the indication is that these are not things that are necessarily profitable," said Meg Geldens, an analyst with Man Securities.
"I think overall the underlying trends are encouraging," she added.
Net profit in the first half declined 27 percent to 96 million pounds after the discontinuation of some operations and last year's first half benefited from a disposal.
Reuters shares were up 2.1 percent at 385 1/2 pence by 9 a.m., after declining 16 percent since the start of the year and underperforming the DJ Stoxx media index.
First-half revenue was £1.28 billion (€1.87bn) with £156 million (€228m) of trading profit, both of which were at the top end of a range of analysts' forecasts. Trading profit is operating profit before acquisitions and several other items.
Revenue increased in all three geographic regions, with a 7 percent underlying gain in Asia, the company's smallest market, 6 percent in the Americas and 3 percent in Europe, Middle East and Africa, which accounts for more than half of the total.
The UK and Ireland division posted a 7 percent gain.