The Tax & Accounting business was one of the best-performing units at Thomson Reuters, according to the company’s first-quarter financial results.
The company reported Tuesday that revenues in the Tax & Accounting business increased 31 percent in the first quarter, driven by acquisitions and strong growth across the business. Organic growth, not due to acquisitions, was up 9 percent. Thomson Reuters acquired several tax and accounting-related software companies in different countries in recent months, including Dr Tax in Canada, Fast Facts in India and BizActions in the U.S.
EBITDA at the Tax & Accounting business increased 50 percent and the corresponding margin increased 410 basis points to 31.0 percent, according to the company. Operating profit in the business increased 58 percent and the corresponding margin increased 380 basis points to 21.9 percent due to strong revenue flow-through and efficiency initiatives, partly offset by the dilutive effect of acquisitions.
The company also saw growth in its legal business, and its intellectual property and science business. Overall, Thomson Reuters reported revenues from ongoing businesses of $3.2 billion, a 4 percent increase before currency. Adjusted EBITDA increased 15 percent with the corresponding margin up 260 basis points to 25.9 percent. Underlying operating profit increased 2 percent with a corresponding margin of 17.1 percent versus 17.4 percent in the prior-year period. Adjusted earnings per share were $0.44 compared to $0.37 in the first quarter of 2011.
"The first-quarter performance was consistent with our full-year expectations," said Thomson Reuters CEO James C. Smith, who took the helm in January. "The Legal, Tax & Accounting and IP & Science businesses each performed well. Our Financial & Risk business continues to make progress in a very difficult environment. We are executing against a more focused strategy. In all, we are on track and affirm our full-year outlook."
“Last week, we announced an agreement to sell our Healthcare business for $1.25 billion,” Smith added. “The transaction will enable us to redeploy capital to a number of alternatives, including accelerating development of our core businesses, as well as those in fast-growing geographies around the world.”
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