Reed trends continue into second half

18th Nov 2010 07:02

Anglo Dutch publishing giant Reed Elsevier is trading much the same as it did in the first half, with subscription revenues constrained, and advertising, promotion and other cyclical markets continuing to stabilise.It reaffirmed predictions made at July's interims of a "modest" reduction in adjusted operating margin year on year due to a weak revenue environment and increased investment in legal markets. "Any sustained recovery is expected to be gradual and remains dependent on economic conditions," the company warned.Chief executive Erik Engstrom said the second half of 2010 has been spent on "new product development, increased sales and marketing activities, and portfolio realignment". Broken down, the Elsevier business has enjoyed "good momentum" in Health Sciences, although pharma promotion revenues remain weak. Underlying revenue growth in Science and Technology is lower than last year as academic budget constraints remain. Database and electronic research unit LexisNexis has seen the insurance segment continue to grow strongly and more cyclical markets like employment screening have shown further improvement. Academic markets remain weak, Reed said.At Reed Exhibitions, space sales for most of the year have been down year on year, but exhibition markets are stabilising with growth returning in the second half annual shows. "The net cycling in of biennial shows will deliver overall growth for the year. Forward space bookings for events in 2011 are encouraging, although these vary by sector and geography; 2011 will, however, see the net cycling out of biennial shows," explained the firm.Prospects for the business information division are improving, with data services growing well, advertising and promotion markets stabilising, and further portfolio restructuring.