Reuters profit hit by Net transformation
It made a paltry £411 million in 2000
Reuters Group saw operating profit drop 25 per cent last year due to costs related to transforming itself into an online news machine.
Profit fell to £411 million for the year ended December 31 2000, from £549 million the previous year, with operating profit as a percentage of sales down to 11.4 per cent from 17.6 per cent.
The company has so far spent £139 million of the £500 million it last year announced it would use for the Internet switch, a plan which has so far "made good progress," according to Reuters. Cash saved from switching to the Web will start adding to profit next year.
Net income rose 25 per cent to £532 million, or 37.9 pence a share, from £425 million, or 30.2 pence, a year earlier. Sales for the year rose 15 per cent to £3.6 million.
Reuters CEO Peter Job said: "The Internet and its technologies remain a powerful driver for us, permitting us to improve the way we work and help our customers to enhance their performance.
"The collapse of the valuation bubble around Internet stocks has not affected our strategy, which goes forward as we stated last year. We are confident this technology revolution will continue to open up many new opportunities for the group."
The company also said today it would use the Inktomi Search/Enterprise Internet infrastructure software to run its global intranet, which supplies information to more than 17,000 staff. ®