Reed Shares Rally On Results

Anglo-Dutch publishing group, Reed Elsevier, has this morning posted interim pre-tax profits up 13% at £410 million, notably above the consensus expectations.

Reed says that the first half results are encouraging and reflect strong performances in Science & Medical, Legal and Education, partly offset by the impact of the economic slowdown on Business to Business. Reed’s B2B publishing is currently outperforming the market, according to chief executive Crispin Davis.

Turnover rose by 8% to £2.03 billion, whilst operating profit grew by 7% to £438 million. The Reed Elsevier combined group encompasses the businesses of Reed Elsevier and Elsevier Reed Finance BV, together with their two parent companies, Reed International and Elsevier.

Profits from business publishing increased by 2% on underlying revenues up 3%. Revenues at Cahners in the US dropped by 6%, prompting Davis to reassure investors this morning. Despite the fall in revenues, underlying profits at Cahners were up on last year.

Analysts at ABN Amro say that these results indicate that Reed may well be on target to deliver double-digit earnings growth by the end of the year, despite the tough economic conditions.

At lunchtime today shares in Reed Elsevier were up 31˝p or over 5% at 607p. A range of brokers upgraded their ratings to Buy on the back of the results.

Reed Elsevier: 020 7222 8420 www.reedelsevier.com

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