Reed Profits Down 3%, But Outlook Remains Promising

Reed Elsevier today reported a dip in profits for the first half of 2002 but remains confident that it can reach full-year targets of above market revenue growth.

A drop in advertising income led to pre-tax profits falling 3% to £398 million. However, this figure was at the upper end of analysts’ estimates and overall revenues increased 21% to $2.47 billion.

Revenues at Reed’s business publications slumped 20% to £725 million but this was largely offset by gains elsewhere. Underlying revenues in the legal division rose 4% while margins in the scientific and medical division were up 2% as a result of the successful integration of Harcourt General and an ongoing cost saving strategy.

Further growth is expected in the second half of the year when the scientific, medical and education businesses traditionally generate most of their profits. Online sales are also expected to meet the full-year target of £1 billion.

Reed chief executive Crispin Davis was in bullish mood following the release of today’s figures. “We have continuously delivered against the milestones we set ourselves and it is a testament to the transformation of the business that we are firmly on track to meet our key financial growth targets,” he said.

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