Reed Elsevier sees underlying strength but sterling bites

24th Jul 2014 07:28

- H1 revenue up 4% and EPS up 11% at constant currency- Statutory revenue down 6%, EPS down 9% after sterling effect- £400m buybacks completed - Interim dividend up 5%Underlying trends remain strong for Reed Elsevier, enabling the business publishing and information company to drive a 5% improvement in profits in the first half of the year and complete two thirds of the £600m of share buybacks planned for the year. Underlying revenue at constant currencies grew 4% to £2.85bn in the first six months of the year, which combined with improved processes and portfolio development to produce the 5% rise in underlying adjusted operating profit growth to £860m.Allowing for the effects of an increasingly strong pound, the unadulterated top line fell 6%, operating profits were down 1% and pre-tax profits were up 2%. Chief Executive Erik Engstrom said: "In the first half we continued the transformation of our business, adding datasets and analytics and building out our leading global platforms, primarily through organic development."The Anglo-Dutch group also made net 10 small acquisitions of content, data assets and exhibitions in the first half of 2014 and completed six disposals, for a net £69m of expenditure. The share buybacks and timing of term debt refinancing helped convert the profit gain into an 11% rise in adjusted earnings per share at constant currencies to 27.8p. Reported earnings, reflecting the impact of sterling headwinds, fell 9.1% to 20p.The interim dividend was lifted 5% to 7.00p.Engstrom said the company's full year outlook was unchanged, adding: "Underlying trends in our business continue to be positive as we enter the second half, and we remain confident that we will deliver another year of underlying revenue, profit, and earnings growth in 2014."OH