News and information provider Reuters unveiled a long-awaited growth plan to expand its customer base and what it sells.
The company also said this morning it would return £1 billion to shareholders by buying back shares.
Reuters shares were the biggest fallers in the FTSE 100 index, slipping 7.8 per cent to 380 pence by 11.10am, however, as investment to implement its plan will cut into short-term profit.
The company reported its first rise in quarterly revenue from the sale of core subscription products since late 2001 and posted growth in new sales during every month of the first half.
Reuters forecast 5 to 7 per cent annual revenue growth by 2008, in part by enticing more customers to trade electronically using its desktop products and by selling a wider range of analytical information and corporate-wide services.
For the second half of 2005, Reuters said it expected underlying recurring revenue growth of 1 to 2 per cent.
In addition to a projected 2 to 4 per cent growth rate for core products, Reuters expects to increase revenue growth through new initiatives by a further 1 percentage point in 2006 and 3 percentage points in 2008.
It said it would achieve this by nearly doubling the target market it chases to £11 billion, from £6 billion.
But the investment in new initiatives comes at a cost, and Reuters said 2006 profit would be lowered by about £50 million, followed by a £20 million reduction in 2007.