Exchange news distributors in war

Paul Armstrong12 April 2012

A PRICE war has erupted in the battle for the right to distribute company Stock Exchange announcements, with some groups charging as little as £1 to circulate elaborate profit results.

Five news distributors have entered the market since it was deregulated by the Financial Services Authority last month, ending the monopoly enjoyed by the London Stock Exchange's Regulatory News Service.

Figures provided to the London Evening Standard's Business Day section show most firms have retained RNS, enabling it to capture 85% of the market. But it is facing fierce competition from new entrants, some of which are using their service as a loss-leader to win lucrative contracts to circulate the announcements to a far wider audience of stockbroking analysts, investors and media.

The exchange is charging £50 for a two-line statement, £150 for a profit result and £5,000 for an annual all-inclusive service.

PR Newswire, an arm of United News & Media, wants £3,000 for the annual service, £375 for a profit result and £20 for a two-liner. Swedish group Waymaker charges just £1 for a release but customers must commit to distributing interim and full-year profit statements through its network to a wider audience, at 10p per e-mail and 25p per faxed page.

PR Newswire managing director-Vicky Unwin, whose company has won clients such as Cable & Wireless, Cadbury and Gartmore, said the service was 'a hook to get clients to use our other services' such as its global media and investor database. Waymaker business development manager Tony Workman said his firm's £1 service was unprofitable, but added it 'was about building market share'.

PR Newswire has snatched 11% of the market based on figures from the past week. Waymaker has just over 2%, Newslink and Businesswire 0.7% and Pims 0.4%.

The FSA said it opened the market in a bid to drive down costs and increase investors' access to price-sensitive news. But it is impossible to compare the current cost of distributing statements with that incurred before deregulation because the cost of running RNS was covered by companies' listing fees.

Company news distributors, known as primary information providers, have to pass an audit by a third party confirming they meet the FSA's security and technology standards. They then forward the statements for public release to Reuters, Bloomberg, AFX, Thomson Financial and Hemscott.

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