Excluding Instinet, Reuters revenue rose by 5% to £762 million. In sharp contrast, Instinet, which is 83% owned by Reuters Group, saw revenue decline by 39% to £153 million in the first quarter from the equivalent quarter last year when market volumes were at all time record levels.

Demonstrating the importance of Reuters recent acquisitions to the figures, the underlying revenue, which excludes the impact of acquisitions, disposals and currency movements, declined 13% for the Group as a whole.

Tom Glocer, Reuters Group chief executive, commented: "Despite challenging market conditions, we remain focused on margin enhancement at Reuters, with a 12% operating target in 2002. We are actively supporting Instinet’s plan to address its market position and profitability through new product roll-out, technology upgrades and substantial cost reductions."

Recurring revenue from subscription products rose 4% to £701 million. Positive contributions from Bridge and 3000Xtra offset declines in recurring revenues from dealing products.

Usage revenue from Reuters transaction products rose by 108% to £33 million, reflecting the inclusion of Bridge Trading. Since coming under Reuters ownership, Bridge Trading has performed ahead of expectations with first quarter revenues growing 30% over the equivalent period last year.

Outright revenue from the solutions and consulting businesses was £28 million in the first quarter compared to £36 million in the first quarter of 2001. This performance reflects the slowdown in IT investment that first became evident in the second half of 2001 and is consistent with a 2002 sales pipeline weighted towards the second half of the year, says the company.

Reuters expects subscription revenue in 2002 to grow, reflecting the inclusion of the acquired Bridge businesses. In line with the forecast made in February, underlying subscription revenue is expected to decline by between 2% and 3% in the first half of 2002.

Reuters currently expects that normalised operating margins, excluding Instinet, will improve from 7% in 2001 to its previously stated target of approximately 12% in the current year.