Reshaping its business and rolling out new technology have continued to pay off for Reed Elsevier (REL). Electronic and face-to-face operations now account for more than four-fifths of the professional information giant's revenues - a stark change from 2005, when print revenues accounted for more than half.
The Anglo-Dutch company has been investing heavily in the shift away from print advertising towards higher-margin, higher-growth markets and in new products and services. It has also been pruning its business portfolio, completing 20 acquisitions and 26 disposals last year for a net gain of £101m.
The strategy seems to have worked so far, delivering underlying year-on-year sales growth across all Reed's divisions. Its business information and risk solutions segments delivered gains in underlying adjusted operating profits of 14 and 8 per cent, respectively. The company's main sore spot is its legal division, including the LexisNexis brand, where growth slumped to 1 per cent last year due to law firms' belt-tightening since the financial crisis.
Investec analysts expect full-year pre-tax profit of £1.6bn, giving EPS of 55.7p, rising to £1.67bn and 58.1p in 2015.
| REED ELSEVIER (REL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 918p | MARKET VALUE: | £10.7bn | |
| TOUCH: | 918-919p | 12-MONTH HIGH: | 938p | LOW: 690p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 206p* | NET DEBT: | 128% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 6.1 | 0.4 | 17.2 | 20.4 |
| 2010 | 6.1 | 0.8 | 27.3 | 20.4 |
| 2011 | 6.0 | 1.0 | 32.4 | 21.6 |
| 2012 (restated) | 6.1 | 1.5 | 44.8 | 23.0 |
| 2013 | 6.0 | 1.6 | 48.8 | 24.6 |
| % change | -1 | +7 | +9 | +7 |
Ex-div: 30 Apr Payment: 23 May *Includes intangible assets of £7.7bn, or 663p a share †Turnover and pre-tax profits are for the combined entity, while earnings and dividends per share are for Reed Elsevier plc | ||||
