NEWS and information group Reuters has repeated its warning that recurring revenues would be about 11 per cent lower this year than last as gloomy conditions continue to take their toll in the first half.

The company has been hit by the global economic downturn as City institutions lay off personnel and so buy fewer of its products. Last year, it lost about 100,000 customers.

Despite the recent improvement in stock market confidence, Reuters said it remained relatively cautious about its sales prospects for the rest of this year.

Reuters warned in April that revenues would fall by between ten per cent and 12 per cent in the full year.

Reporting results for the six months to June 30, Reuters said its recurring revenues - those customers renewing their subscriptions which makes up 93 per cent of revenues - fell ten per cent to £1.2bn in the period.

Operating margins were 14.7 per cent, ahead of previous full year guidance of 12 per cent.

During the first half good progress on cost savings - including job cuts - helped the company towards its planned savings target for this year.

Reuters said £30m of the £45m savings earmarked for 2003 had already been delivered, prompting it to raise the full-year target to £55m.

Chief executive Tom Glocer said: "Our first-half operating margins came in ahead of our full year guidance thanks to real discipline in managing the cost base and favourable currency movements. We now expect to improve on last year's 13.1 per cent margin for the full year."

Reuters said that although market conditions continued to be tough, its Fast Forward recovery programme was progressing well.

The company has launched a number of products and landed deals with Goldman Sachs and Lehman Brothers.

Pre-tax profits, excluding one-off costs, were £87m in the half, compared with a loss of £10m last year.

At the bottom line, pre-tax profits were £16m compared to a loss of £88m a year ago.

Shareholders will get an interim dividend of 3.85p a share, unchanged from last year.

In February, Reuters announced 3,000 job cuts over the next three years after revealing its first annual loss since listing as a public company in 1984.