Many publishers have raced to offset plummeting print sales with digital and emerging-market revenues, but few have succeeded. RELX (REL) is a rare exception: underlying sales and operating profits rose across all four of the information and events group's divisions in the six months to 30 June.
The rebranded Reed Elsevier's success has sprung from technology investments, new products and services and expansion into fast-growing sectors and territories. Together with rising enterprise demand for identification and fraud detection products and brisk trading in the US auto underwriting business, the investments drove underlying operating profits up 7 per cent to £291m in the key risk and business information division.
Underlying sales climbed 6 per cent at the group's smaller exhibitions business. That reflected the launch of 20 new events and strong attendance of major shows in the US and Japan. The division also made several small acquisitions, including C-Touch, a Chinese trade show for the touchscreen industry, and the Jewelers International Showcase in the US.
Despite tepid demand in the US and Europe, the legal business grew underlying operating profit by 8 per cent.
RELX continued to reshape its portfolio: it shelled out £69m for 11 small acquisitions and disposed of £6m in assets.
Broker Numis expects pre-tax profit of £1.73bn in the year to December, giving EPS of 61.6p (2014: £1.58bn and 55.7p).
| RELX (REL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,100p | MARKET VALUE: | £23.6bn | |
| TOUCH: | 1,100p-1,101p | 12-MONTH HIGH: | 1,199p | LOW: 922p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 160p* | NET DEBT: | 212% | |
| Half-year to 30 Jun | Turnover (£bn)† | Pre-tax profit (£m)† | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 2.85 | 606 | 20.0 | 7.00 |
| 2015 | 2.96 | 601 | 21.0 | 7.40 |
| % change | +4 | -1 | +5 | +6 |
Ex-div:06 Aug Payment:28 Aug *Includes intangible assets of £7.93bn, or 707p a share †Turnover and pre-tax profit are for the combined Anglo-Dutch entity, while earnings and dividend per share are for Reed Elsevier plc | ||||
