Reed Elsevier 1H Revenue Down 2%, Keeps Outlook

29th Jul 2010 07:50

By Roberta B. Cowan Of DOW JONES NEWSWIRES AMSTERDAM (Dow Jones)--Reed Elsevier PLC (REL.LN) Thursday reported lower first half revenue but reiterated its full year outlook amid stabilizing advertising markets, but it remained cautious about the recovery. The Anglo-Dutch publisher said declines in customer activity and budgets over the last two years are constraining the development of subscription revenue in its core professional markets. While advertising and promotion markets are stabilizing, the firm said it remains "cautious" and that any sustained recovery remains dependent on improving economic conditions and is expected to be gradual. Reed reiterated that it expects to report a modest reduction year-on-year in adjusted operating margin due to a weak revenue environment and increased investment in legal markets. Chief Executive Erik Engstrom said: "While we have seen an improvement in the general economic environment and the actions we are taking are beginning to bear fruit, recovery will be gradual as conditions remain constrained in many of our markets." Adjusted operating profit before exceptional items--one of the key figures tracked by U.K. analysts--fell 3% to GBP758 million in the six months to June 30 from GBP782 million a year earlier, beating market expectations of GBP700 million. The company previously flagged a "modest reduction" in adjusted operating margin in 2010 due to a weak revenue environment and increased investment in legal markets. Reed Elsevier owns the legal information system LexisNexis and medical publications such as Gray's Anatomy and the Lancet. It also publishes entertainment-trade magazine Variety. Revenue fell 2% to GBP2.99 billion from GBP3.06 billion, in line expectations of GBP2.9 billion. The stock closed at 532 pence Wednesday, valuing the company at GBP6.43 billion. -By Roberta B. Cowan, Dow Jones Newswires; +3120-571-5200; [email protected] (END) Dow Jones Newswires July 29, 2010 02:50 ET (06:50 GMT)