RTRSY Reuters Grp. Plc ADS (MM)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of MARCH 2008
Commission File Number 333-08354

REUTERS GROUP PLC

(Translation of registrant’s name into English)

THE REUTERS BUILDING, SOUTH COLONNADE, CANARY WHARF,
LONDON E14 5EP

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F  þ
Form 40-F  o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Note : Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes  o   No  þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                      .

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

REUTERS GROUP PLC
(Registrant)
Date 17 March 2008
 

By:		/s/ Nancy C Gardner
		NANCY GARDNER, AUTHORISED SIGNATORY AND  GENERAL COUNSEL, AMERICAS

SUPPLEMENTARY PROSPECTUS DATED 14 MARCH 2008

 

This document, which comprises a supplementary prospectus relating to Thomson Reuters PLC prepared in accordance with the Prospectus Rules made under Section 73A of the Financial Services and Markets Act 2000 ( “FSMA” ), has been filed with the Financial Services Authority ( “FSA” ) and made available to the public as required by Rule 3.2 of the Prospectus Rules. This document has been approved as a supplementary prospectus pursuant to Section 87A of the FSMA.

 

This document is supplemental to and must be read in conjunction with the prospectus dated 29 February 2008 (the “Prospectus”). Save as disclosed in this document, since the publication of the Prospectus, there have been no other significant new factors, material mistakes or inaccuracies relating to the information included in the Prospectus. You should read this document and the Prospectus in their entirety. See in particular Part II (Risk Factors) of the Prospectus for a discussion of certain risks and other factors that should be considered by Reuters Shareholders, Reuters ADS Holders and potential Thomson Reuters Shareholders and investors.

 

Except where the context otherwise requires, capitalised terms used in this document have the meanings ascribed to them in Part XXII (Definitions) of the Prospectus.

 

 

Reuters Group PLC

(Incorporated and registered in England and Wales

under the Companies Act 1985 with registered number 3296375)

and

Thomson Reuters PLC

(Incorporated and registered in England and Wales

under the Companies Act 1985 with registered number 6141013)

Recommended Acquisition of Reuters Group PLC by

The Thomson Corporation

 

Introduction of up to 203,000,000 ordinary shares in Thomson Reuters PLC

of 1000 pence each to the Official List

Sponsored by Citi

 

 

The availability of the Thomson Reuters PLC Shares, the Thomson Reuters PLC ADSs and the Loan Notes to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom should inform themselves of and observe any applicable requirements.

 

No Thomson Reuters PLC Shares have been marketed to, or are available for purchase by, the public in the United Kingdom or elsewhere in connection with the Introduction and Admission of the Thomson Reuters PLC Shares to trading on the London Stock Exchange’s main market for listed securities.

 

Application will be made to the FSA and to the London Stock Exchange, respectively, for the entire ordinary share capital of Thomson Reuters PLC, issued and to be issued, to be admitted to the Official List and to trading on the London Stock Exchange’s main market for listed securities. Admission to the Official List, together with admission to trading on the London Stock Exchange’s main market for listed securities ( “Admission” ), constitutes admission to official listing on a stock exchange in the United Kingdom. It is currently expected that Admission of the Thomson Reuters PLC Shares, to be issued to persons on the Reuters Group PLC register of members at 6.00 p.m. (London time) on 16 April 2008, to the Official List and to trading on the London Stock Exchange’s main market for listed securities will become effective and that unconditional dealings will commence in the Thomson Reuters PLC Shares at 8.00 a.m. (London time) on 17 April 2008. In addition, Thomson Reuters PLC has provided notification to Nasdaq of the substitution listing of the Thomson Reuters PLC ADSs on the Nasdaq Global Select Market. No application is currently intended to be made for the Thomson Reuters PLC Shares to be admitted to listing or dealing on any other exchange.

 

No person has been authorised to give any information or make any representations other than those contained in this document and the Prospectus and, if given or made, such information or representations must not be relied upon as having been so authorised. The information contained in this document is accurate as at the date of this document, regardless of the time of delivery of this document or of any issue or allotment of Thomson Reuters PLC Shares. Neither the delivery of this document nor any issue and allotment made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of Thomson Reuters PLC since the date hereof or that the information in this document is correct as at any time subsequent to the date of this document. Nothing in this document shall be deemed to be a forecast, projection or estimate of the future financial performance of Reuters, Thomson Reuters or Thomson except where otherwise stated. The information in this document will be updated as required by the Listing Rules, Prospectus Rules and Disclosure and Transparency Rules or otherwise as required by applicable law, rule or regulation, as appropriate.

IMPORTANT NOTICE

 

Citi is acting as joint corporate broker to Reuters and as sponsor to Thomson Reuters PLC in connection with Admission and is also providing financial advice to Reuters and is acting for no one else in connection with the Transaction or Admission and will not be responsible to anyone other than Reuters and Thomson Reuters PLC for providing the protections afforded to the clients of Citi, nor for providing advice in relation to the Transaction or Admission or any other matter referred to in this document or the Prospectus.

 

INFORMATION FOR OVERSEAS PERSONS

 

The release, publication or distribution of this document and the Prospectus in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable restrictions. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of such jurisdiction. To the fullest extent permitted by applicable law, Thomson Reuters PLC, Reuters and Thomson disclaim any responsibility or liability for the violation of any applicable restrictions by any person. Neither this document, nor the Prospectus constitutes an offer or invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this document or otherwise in any jurisdiction in which such offer or solicitation is unlawful. This document and the Prospectus have been prepared for the purposes of complying with English law, the Prospectus Rules, the City Code and the Listing Rules and the information disclosed may not be the same as that which would have been disclosed if this document or the Prospectus had been prepared in accordance with the laws of jurisdictions outside England and Wales.

 

The Thomson Reuters PLC Shares to be issued under the Scheme, including those represented by Thomson Reuters PLC ADSs, will be issued in reliance upon the exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “US Securities Act” ), provided by section 3(a)(10) thereof and, as a consequence, the issuance of Thomson Reuters PLC Shares will not be registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States. Persons who are affiliates of Thomson Reuters PLC after the Effective Date will be subject to certain US transfer restrictions relating to Thomson Reuters PLC Shares received under the Scheme, including those represented by Thomson Reuters PLC ADSs. The Loan Notes have not been, and will not be, registered under the US Securities Act, or under the laws of any state, district or other jurisdiction of the United States or New Zealand and no regulatory clearances in respect of the Loan Notes have been, or will be, applied for in any jurisdiction. Accordingly, the Loan Notes are not being offered in, and may not be transferred into, the United States or New Zealand or any other jurisdiction where the sale, issue or transfer of the Loan Notes would be a contravention of applicable law or in the event that Thomson Reuters PLC regards the sale, issue or transfer restrictions as unduly onerous. The attention of Overseas Shareholders or other recipients of this document or the Prospectus who are residents or citizens of, or located in, any country other than the United Kingdom is drawn to Part XIX (Additional Information for Overseas Shareholders) of the Prospectus.

 

The Transaction relates to the acquisition of shares in an English company and is proposed to be made by means of a scheme of arrangement under English company law. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable to English schemes of arrangement, and the information disclosed in this document and the Prospectus may not be the same as that which would have been disclosed if this document and the Prospectus had been prepared for the purpose of complying with the registration requirements of the US Securities Act or in accordance with the laws or regulations of any other jurisdiction. Financial information included in the relevant documentation has been prepared in accordance with International Financial Reporting Standards as adopted by the EU ( “IFRS” ) and accounting standards applicable in Canada and may not be comparable to financial statements of US companies.

 

TABLE OF CONTENTS

 

 

 

This document is supplemental to, and should be read in conjunction with, the Prospectus. Following the publication of the Prospectus on 29 February 2008, Reuters subsequently announced its unaudited preliminary results for the year ended 31 December 2007 on 6 March 2008. Thomson Reuters PLC and the Thomson Reuters Proposed Directors regard this information as a significant new factor relating to information contained in the Prospectus and accordingly have prepared and published this document in accordance with Section 87G of FSMA, the Prospectus Rules and the Listing Rules. Save as disclosed in this Part I and Part II of this document, there is no further information that is required to be disclosed in this supplementary prospectus pursuant to Section 87G of the FSMA.

 

The summary below supplements the summary set out in Part I (Summary) of the Prospectus.

 

Reuters Group PLC Unaudited Preliminary Results for the Year Ended 31 December 2007

 

Business performance

 

 

Operating highlights

 

 

Guidance

 

 

Tom Glocer, Reuters Chief Executive, said: “Reuters has delivered a signature final year as a standalone company. We set ourselves ambitious goals for 2007, did not waver from these, and despite significant integration activities and a volatile market we have exceeded all our targets. I am very proud of what we have achieved over the past year and throughout the period of transformation at Reuters. It is thanks to

the dedicated efforts of Reuters employees around the world that we can now embark on the creation of Thomson Reuters from a position of strength.

 

“I am delighted that our combination with Thomson has now been approved by the competition authorities, and I am hugely excited about the prospect of creating the leading provider of critical information and decision support tools for businesses and professionals around the world. I am confident that the new Thomson Reuters will deliver outstanding benefits to customers, opportunities for employees and great value for shareholders.”

 

 

 

 

Following the publication of the Prospectus on 29 February 2008, Reuters subsequently announced its unaudited preliminary results for the year ended 31 December 2007 on 6 March 2008. Thomson Reuters PLC and the Thomson Reuters Proposed Directors regard this information as a significant new factor relating to information contained in the Prospectus and accordingly have prepared and published this document in accordance with Section 87G of FSMA, the Prospectus Rules and the Listing Rules. Save as disclosed in Parts I and II of this document, there is no further information that is required to be disclosed in this supplementary prospectus pursuant to Section 87G of FSMA. The full text of the of the Reuters Group PLC preliminary results announcement for the year ended 31 December 2007, as announced on 6 March 2008, is set out below.

 

The financial information concerning Reuters Group PLC contained in this Part II does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.

 

Reuters Group PLC Unaudited Preliminary Results for year ended 31 December 2007

 

for the year ended 31 December 2007

 

REUTERS FULL YEAR RESULTS

 

Business performance

 

 

 

 

Operating highlights

 

 

 

^*   This release includes certain non-GAAP figures which are business performance measures used to manage the business. See pages 23 to 35 for explanations and reconciliations to the most directly comparable statutory figures. For certain profit, cost, margin and cash flow measures, Reuters analyses its results both before and after the impact of acquisition related restructuring charges, Thomson deal-related costs, impairments & amortisation of intangibles acquired via business combinations, investment income, profits from disposals of subsidiaries and fair value movements. The adjusted measures are referred to as Trading Profit, Trading Costs, Trading Margin and Trading Cash Flow.
Adjusted EPS is defined as basic EPS from continuing operations before impairments & amortisation of business combination intangibles, investment income, profit on disposals, fair value movements, Thomson deal-related costs and related taxation effects. The impact of recently announced reductions in the corporation tax rates in various countries has also been excluded.
Free cash flow is defined as cash movements, other than those which are either discretionary in nature or unrelated to ongoing recurring operating activities such as acquisitions and disposals and dividends.

incremental cost savings, principally from transformation of software development and communications infrastructure

 

 

Guidance

 

 

Tom Glocer, Reuters Chief Executive, said: “Reuters has delivered a signature final year as a standalone company. We set ourselves ambitious goals for 2007, did not waver from these, and despite significant integration activities and a volatile market we have exceeded all our targets. I am very proud of what we have achieved over the past year and throughout the period of transformation at Reuters. It is thanks to the dedicated efforts of Reuters employees around the world that we can now embark on the creation of Thomson Reuters from a position of strength.

 

“I am delighted that our combination with Thomson has now been approved by the competition authorities, and I am hugely excited about the prospect of creating the leading provider of critical information and decision support tools for businesses and professionals around the world. I am confident that the new Thomson Reuters will deliver outstanding benefits to customers, opportunities for employees and great value for shareholders.”

 

 

 

 

PROGRESS UPDATE ON THE THOMSON REUTERS TRANSACTION

 

Thomson and Reuters have now obtained all regulatory clearances necessary to close their transaction.

 

In order to facilitate regulatory clearance, Thomson has agreed to sell a copy of the Thomson Fundamentals (Worldscope) database and Reuters has agreed to sell a copy of the Reuters Estimates, Reuters Aftermarket Research and Reuters Economics (EcoWin) databases. The sales include copies of the databases, source data and training materials, as well as certain contracts and employees connected to the databases.

 

Thomson and Reuters retain full ownership of the relevant databases and these undertakings do not affect Thomson’s and Reuters ongoing business or capabilities in these areas. The two companies are not required to complete the sales prior to the closing of the acquisition.

 

Thomson and Reuters will each now seek shareholder and court approvals.

 

The timetable of principal events is expected to be as follows:-

 

 

This announcement includes forward-looking statements.  See page 36 for a description of risk factors.

 

 

 

 

Revenue

 

Full year revenue was £2,605 million, up 7% on an underlying basis (excluding acquisitions, disposals and currency) and 1.5% in actual terms, with the main difference between the two growth rates being the weakening of the US dollar against Sterling in the first half of the year. The acquisitions of Application Networks in 2006 and ClearForest and FERI in 2007 made a small contribution to 2007 revenue growth.

 

Core Plus initiatives contributed an additional £63 million of revenue in 2007, equivalent to 2.6 percentage points of underlying growth, giving cumulative Core Plus revenue of £95 million. The most significant

sources of growth were the addition of high value content to Reuters Knowledge; new market initiatives in Consumer Media, China and India; next generation electronic trading initiatives such as Prime Brokerage; and new enterprise solutions such as Reuters Datascope and Reuters Datafeed Direct . Reuters is now on track to exceed the three percentage points of underlying revenue growth from Core Plus in 2008 indicated when Core Plus was launched in 2005.

 

Excluding the effects of Core Plus, the core business saw underlying revenue growth of 4.4%, driven by a two percentage point uplift from the 2007 price increase, and volume growth. The key drivers of volume growth were Reuters 3000 Xtra, Reuters Knowledge and Enterprise Information products. Price increases are expected to contribute approximately the same level of growth in 2008 as in 2007.

 

Revenue grew strongly on an underlying basis in all geographic regions in 2007. Asia, with 9% underlying revenue growth (flat on an actual basis), was Reuters fastest growing region and delivered double digit growth in China, India and other emerging markets supported by good progress in Japan. The Americas saw underlying growth of 7% (a decline of 1% on an actual basis), with demand for enterprise products and Reuters Knowledge content feeds and desktops remaining strong throughout the year. Europe, Middle East & Africa grew at an underlying 6% (3% on an actual basis), with Reuters broad footprint in high growth areas such as Central and Eastern Europe, the Nordic regions and the Gulf supporting good growth in France, Germany and the UK, and offsetting consolidation-driven declines in Italy.

 

Trading Costs

 

Trading costs (including Core Plus investments for growth and transformation) totalled £2,220 million in 2007 (2006: £2,258 million). The decrease in trading costs, in absolute terms, reflected accelerated Core Plus savings of an incremental £50 million and a £99 million cost reduction from currency effects, which more than offset £24 million of new cost associated with Core Plus. Careful cost control kept core cost inflation below the rate of core revenue growth.

 

Trading Profit

 

Reuters delivered trading profit of £385 million (2006: £308 million). Trading profit growth was driven by revenue increases, continued tight cost control and £89 million net benefit from Core Plus initiatives. The business delivered trading margins of 14.8% after Core Plus investment.

 

 

Operating Profit

 

Operating profit rose by 14% to £292 million (2006: £256 million). This growth reflects the improvement in trading profit, partly offset by £45 million of costs associated with the Thomson Reuters transaction.

 

Profit before taxation

 

Profit before taxation of £273 million (2006: £313 million) reflects lower profits from disposals than in 2006, when Reuters sold the majority of its stake in Factiva. The major driver of Reuters £6 million share of losses from associates and joint ventures was FXMarketSpace.

 

Profit for the year

 

Statutory profit for the year of £227 million (2006: £305 million) included £14 million from discontinued operations, representing amounts received from Instinet and Radianz on settlement of historic tax liabilities.

 

Adjusted earnings per share

 

Adjusted earnings per share rose by 35% to 23.0p (2006: 17.1p), boosted by growth in trading profit and an effective tax rate of 17% (2006: 20%). The average number of shares in issue fell to 1,239 million, largely as a result of the share buyback (2006: 1,297 million).

 

Basic earnings per share

 

Basic EPS declined by 22% to 18.4p (2006: 23.6p), with the reduction in profits on disposal offsetting gains in trading profit.

 

Cash flow

 

Free cash flow totalled £298 million in 2007, a further improvement over the £225 million delivered in 2006. This reflects higher trading profit, lower cash restructuring charges and continued focus on the management of working capital. Capital expenditure of £225 million (2006: £228 million) was in line with management’s commitment to maintain 2006 spending levels.

 

Cash conversion (i.e. trading cash flow divided by trading profit) in 2007 was 92%, rising to 100% on a rolling two year basis.

 

Reuters had net debt of £377 million at 31 December 2007 (2006: £333 million), reflecting free cash flow offset by returns to shareholders of £321 million via the dividend and the share buyback.

 

Share buyback

 

Reuters returned a total of £174 million to shareholders through its on-market buyback programme in 2007. The total returned to shareholders since the inception of the buy back programme in July 2005 now stands at £1.1 billion, at a volume weighted average price of £4.32. The programme was suspended at the time of the announcement of the recommended transaction between Thomson and Reuters. It resumed with an irrevocable arrangement to repurchase up to 50 million ordinary shares between 13 December 2007 and the announcement to the market that all regulatory pre-conditions for the proposed transaction had been satisfied or waived. Of this 50 million shares, 5 million had been repurchased by 31 December 2007 and an additional 28 million by the time the buyback stopped on 19 February 2008.

 

Reuters intends to restart its share repurchase programme as soon as legally permissible. This repurchase programme, up to the previous threshold of 50 million shares, will continue until completion of the Transaction or such earlier time as the Board may determine.

 

 

 

 

 

 

 

Sales & Trading revenue was £1,619 million in 2007, an underlying increase of 3%. On an actual basis, currency effects resulted in a 2% decrease in revenue. Trading profit increased by an underlying 28% (9% on an actual basis), reflecting a net benefit from Core Plus and tight cost control as well as revenue growth. The division’s trading margin was 15%.

 

The Sales & Trading division’s strategic focus is to become the leading provider of content and transactions services for traders and salespeople, across the financial markets globally. At its heart is Reuters foreign exchange franchise, which provides the news, pricing and transaction systems essential to the functioning of this global market. Profitable growth in Sales & Trading is being driven by expanding transactions capabilities across asset classes, exploiting opportunities in new and emerging markets and reducing the cost and complexity of technology platforms. The division further strengthened its value proposition in 2007 by being early to market with facilities to help customers overcome the challenges presented by MiFID.

 

The key product drivers of the Sales & Trading division in 2007 were:

 

 

Revenue from recoveries (exchange fees and specialist data) grew by an underlying 10% to £298 million, driven in part by exchange fee price increases.

 

Core Plus initiatives in Sales & Trading saw revenue benefit from Reuters suite of new electronic trading products, such as Reuters Trading for FX, and in developing markets such as China and India. While investment continued in new transaction systems and common product technology platforms, there were significant cost savings, specifically in communications infrastructure.

 

 

 

 

Research & Asset Management revenue in 2007 grew 25% on an underlying basis (20% on an actual basis) to £363 million. Growth excluding the impact of migrations from Sales & Trading was an underlying 18%. The division reached profitability in 2007, delivering trading profit of £35 million with a trading margin of 10%. This reflected strong revenue growth and operational leverage in the division.

 

Research & Asset Management aims to provide independent content and insight to two user communities: Investment Banking, Investment Management & Corporates and Wealth Management.

 

Investment Banking, Investment Management & Corporates revenues grew 34% on an underlying basis to £229 million. Quarterly content and functionality enhancements sustained growth, both of feeds for integration into customer systems and of Reuters Knowledge desktops, which now number 17,000. Reuters Knowledge embedded within Reuters 3000 Xtra continued to sell well.

 

Revenue from the Wealth Management customer base grew 11% on an underlying basis to £134 million, driven by continued customer demand for online feed and web based solutions, as well as 11% underlying growth in Lipper funds information revenue.

 

The key contribution to Core Plus revenue in Research & Asset Management came from high value content and functionality enhancements in the Reuters Knowledge product family.

 

 

 

 

Enterprise revenue grew by an underlying 10% (5% on an actual basis) to £451 million in 2007. Trading profit increased by 21% on an underlying basis (11% on an actual basis) and the division’s trading margin was 20%, reflecting strong operational leverage and the benefits of Core Plus.

 

Reuters financial services customers — from banks to hedge funds — are looking to grow revenues and cut costs through increased levels of business automation. Competitive pressure drives the need for more mature proprietary trading, prime brokerage and electronic brokerage operations and the focus on regulatory compliance and risk management remains intense. The breadth, depth and reliability of Reuters Enterprise solutions make it a leader in these fields.

 

Enterprise Information continued to perform strongly.  On an underlying basis, revenue grew 18% to £271 million, supported by the rollout of a new commercial model for licensing machine-readable data, which links revenue more directly to the volume of data being used by customers.

 

Trade and Risk Management saw revenues grow 14% on an underlying basis to £102 million, with particularly strong growth in Germany, Eastern Europe, the Gulf and Asia and good progress in the Americas.

 

Information Management Systems (IMS) revenue showed a 15% underlying decline to £78 million. The continuing impact of withdrawal from the hardware business, the completion of the Reuters Market Data System migration and the obsolescence of Telerate platforms was increasingly offset by revenue from new facilities such as Reuters Wireless Delivery System and Reuters Tick Capture Engine .

 

Investment in Core Plus initiatives continued in 2007 to take advantage of new opportunities, for example in the provision of counterparty data. The key sources of Core Plus revenue in the Enterprise division were Reuters Datascope Real Time, Reuters Datafeed Direct and Reuters Datascope Tick History.

 

 

 

 

Media revenue was £172 million in 2007, an underlying increase of 6% (1% on an actual basis). This reflected a demanding year-on-year comparative in the first half, followed by strong year-on-year growth in the second half. Trading profit increased by an underlying 35% (10% on an actual basis) to £16 million, at a trading margin of 9%.

 

Revenue from Agency Services was £142 million, an underlying increase of 5% (flat on an actual basis). Text and TV subscription revenues saw steady growth, while TV usage revenues recovered in the second half after a tough year-on-year comparison in H1. Pictures was the highest growth area, reflecting 2006 investment in coverage and the new Reuters Pictures Archive.

 

Revenue from Consumer Services, which accounted for the Media division’s Core Plus revenue, rose by an underlying 15% (6% on an actual basis) to £30 million, driven by strong growth in online syndication and advertising. Under Core Plus, the division continued to invest in the marketing capabilities, technology and people needed to build an interactive online advertising business.

Notes

 

Reuters (www.reuters.com), the global information company, provides indispensable information tailored for professionals in the financial services, media and corporate markets. Through reuters.com and other digital properties, Reuters now also supplies its trusted content direct to individuals. Reuters drives decision making across the globe based on a reputation for speed, accuracy and independence. Reuters has 17,900 staff in 143 countries, including over 2,300 editorial staff in 197 bureaux serving 132 countries. In 2007, Reuters revenues were £2.6 billion.

 

Reuters and the sphere logo are the trade-marks of the Reuters group of companies.

 

Reuters Group preliminary results presentation for investors and analysts will be webcast live today from 11.00 GMT and available for replay from 14.00 GMT at http://about.reuters.com/webcast/resultsq407 .

 

Photographs are available at http://about.reuters.com/home/mediarelations/medialibrary/index.aspx

 

This announcement includes forward-looking statements. See page 36 for a description of risk factors.

 

SUMMARISED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007 (UNAUDITED)

 

CONTENTS

 

 

 

 

 

Dividends paid and proposed in the period were £147 million (2006: £134 million).

 

 

The financial information for the year ended 31 December 2007 included in this report comprises the consolidated income statement, the condensed consolidated balance sheet, the consolidated cash flow statement, the consolidated statement of recognised income and expense and the related notes on pages 18-20.

 

This preliminary financial information has been prepared in accordance with the Listing Rules of the Financial Services Authority and on a basis consistent with the accounting policies set out on pages 78 to 82 of Reuters Group PLC 2006 Annual Report and Form 20-F.

 

The preliminary financial information is unaudited. The financial information set out in this report does not constitute statutory accounts as defined by the Companies Act 1985. Financial information for the year ended 31 December 2006 included herein is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditors’ report on those accounts was unqualified and did not contain a statement under section 237(2) or section 237(3) of the Companies Act 1985.

 

 

 

 

The tax expense for the year of £60 million (2006: £20 million) comprises current and deferred tax. Included in tax expense is a reduction in deferred tax assets reflecting tax rate changes in the UK and other jurisdictions. Tax on items in equity has been charged to equity.

 

The current tax expense is based on the results for the year as adjusted for items that are not taxable. Tax is calculated using tax rates and laws that have been enacted or substantively enacted at the balance sheet date.

 

The effective tax rate for the year on profit from continuing operations before impairments and amortisation of business combination intangibles, investment income, profit on disposals, Thomson deal-related costs and fair value movements is 17% (2006: 20%).

 

The tax expense includes a charge of £20 million in respect of UK taxation (2006: credit of £34 million).

 

 

The weighted average number of ordinary shares used for the calculation of earnings per share was 1,239 million for the year ended 31 December 2007 (2006: 1,297 million).

 

The interim dividend of 5.0 pence per share was payable on 5 September 2007 to ordinary shareholders and on 12 September 2007 to American Depositary Shareholders on the register as at 10 August 2007. The second interim dividend is payable on 1 May 2008 to ordinary shareholders and American Depositary Shareholders on the register at 25 March 2008. The ex-dividend date for the second interim dividend for ordinary shareholders is 19 March 2008, and 20 March 2008 for American Depositary Shareholders,

 

 

 

From 1 January 2007, Reuters made changes to the allocation of revenue and operating costs among business divisions to reflect changes in the management of Communications revenues and Reuters Messaging products, and to reflect improvements to the allocation methodology.

 

Communications revenues are no longer allocated as recoveries to Sales & Trading, but are allocated among business divisions in line with the products with which they are associated. Reuters Messaging costs are no longer allocated to Sales & Trading, but are allocated to Enterprise to reflect the management of the Messaging product within the Enterprise Division. A proportion of Messaging costs are then charged to the other divisions based on desktop accesses, to reflect the value of the embedded Messaging capability in desktop products.

 

2006 comparatives have therefore been restated to decrease recoveries revenues by £80 million, increase other product revenues by £51 million and decrease operating costs by £37 million in Sales & Trading; to increase other product revenue by £6 million and increase operating costs by £9 million in Research & Asset Management; to increase other product revenue by £23 million and increase operating costs by £27 million in Enterprise and to increase operating costs by £1 million in Media.