The combined Reed Elsevier publishing and information group performed strongly in the half year to June 30, according to interim results released Thursday.
Pre-tax profits, excluding profits from disposals, jumped by 13% to T258 million ($ 387 million) on sales of T1.268 billion ($ 1.9 billion) in constant currency terms.
The bottom line was slightly better than stock analysts had predicted; Reed shares in London gained 10 pence initially, but closed 4 pence down at 660 pence ($ 9.90). Analysts’ enthusiasm was apparently dampened by Reed Elsevier’s outlook for the rest of the year.
The company, parent of Variety and Daily Variety, said the increase in pre-tax profits was 24% at actual exchange rates, but pointed to the constant currency figures as a truer indication.
Reed Intl. chairman Peter Davis and Elsevier NV chairman Pierre Vinken said economic conditions remain difficult in the U.K. and the U.S., and have deteriorated in continental Europe. By controlling costs, there was limited impact on operating profit, they added.
They expect market conditions for the remainder of this year will be little different from the first six months. They said good progress had been made in integrating the Reed and Elsevier businesses since their Jan. 1 merger.
The company reported no growth in advertising volumes in the business-to-business magazine markets in the U.K. and U.S., and continued decline in continental Europe.
The business publishing sector boosted operating profit by 1% to T105 million ($ 157 million) at constant exchange rates.
All the consumer businesses, except Reed Regional Newspapers in Britain and specialty consumer publishing in the U.S., increased their local currency profits despite difficult conditions.
Reed Intl. declared an interim dividend of 6 pence (9 cents) per share, an increase of 9%. Elsevier declared a first-ever interim dividend of 1.67 Dutch guilders (87 cents) per share.