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Reed Elsevier Says 2010 Profit Little Changed as Markets Gradually Recover
Reed Elsevier Plc, the owner of the LexisNexis database, expects its margins to gradually improve in 2011 as many of its markets have started to recover.
The London-based company reported 2010 adjusted net income of 983 million pounds ($1.6 billion) earlier today, from 982 million pounds a year earlier. Analysts surveyed by Bloomberg had predicted 980 million pounds. Revenue was little changed at 6.06 billion from 6.07 billion pounds in 2009.
Reed Elsevier said increased investment on product development and sales and marketing was countered by greater efficiencies. Chief Executive Officer Erik Engstrom said he expects a gradual recovery and continued improvement in performance this year, adding that the company is targeting some small acquisitions and aims to get out of less profitable businesses.
“We have no plans at this point to sell any material part of our business,” the CEO said on a conference call today. Reed Elsevier last year sold off chunks of its trade magazine unit, Reed Business Information, including all U.S. publishing operations except Variety magazine.
“Reed Business Information has been the most active and will continue to be the most active” for restructuring, Engstrom said. The unit exited “clusters’” of titles in markets including Asia, the U.K. and the Netherlands, he said.
No Variety Sale
The company has no plans to sell Hollywood industry journal Variety, Engstrom said.
The shares declined 2.3 percent to 561 pence as of 8:51 a.m. in London, where the company is based. Reed now has a market value of 6.8 billion pounds.
Reed in November forecast a narrower profit margin for 2010 because of “a weak revenue environment and increased investment in legal markets.”
LexisNexis, which accounts for 38 percent of the company’s adjusted operating profit, posted revenue growth of 1 percent for 2010 as legal markets stabilized. Reed Exhibitions, the largest events organizer in the world, saw sales rise 9 percent with the addition of new shows.
Revenue at Reed Business Information, which makes up 6 percent of the company’s adjusted operating profit, dropped 20 percent as the cost base was restructured.
To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net.
To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net.
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