The truism that success or failure depends as much on good timing as efficient execution was amply demonstrated by trade publisher and exhibitions specialist Reed Elsevier; a raft of trade shows and exhibitions in high-growth markets boosted the group's profits in the first half, compared with otherwise pedestrian performance from publishing.
Adjusted for amortisation charges, non-operating items and gains on disposal, underlying operating profit rose 7 per cent in the six-month period, which was largely down to a storming performance at Reed Exhibitions. The division benefited from 15 new events being launched in growing markets, as well as good timing from traditionally strong markets such as the US. Combined, this boosted both divisional revenues and operating profits by a third to £486m and £151m, respectively.
The rest of Reed's businesses all showed improved profitability but, like other publishing companies, the group is struggling to generate top-line growth. For example, LexisNexis Legal, the largest division, accounting for 25 per cent of group turnover, posted flat revenues and the 6 per cent rise in underlying profits to £100m was largely down to tight cost control.
Broker Numis Securities nudged down forecasts slightly and now expects full-year adjusted pre-tax profits of £1.46bn and EPS of 49.6p (from £1.39bn and 46.7p in 2011).
REED ELSEVIER (REL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 541p | MARKET VALUE: | £6.58bn | |
| TOUCH: | 540-541p | 12-MONTH HIGH: | 569p | LOW: 445p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 184p* | NET DEBT: | 145% | |
| Half-year to 30 Jun | Turnover (£bn)† | Pre-tax profit (£m)† | Earnings per share (p)† | Division per share (p)† |
|---|---|---|---|---|
| 2011 | 2.90 | 476 | 15.8 | 5.65 |
| 2012 | 3.05 | 666 | 24.0 | 6.00 |
| % change | +5 | +40 | +52 | +6 |
Ex-div: 8 Aug Payment: 31 Aug *Includes intangible assets of £8.2bn, or 673p a share †Turnover and pre-tax profits are for the combined entity while earnings and dividends per share are for Reed Elsevier plc | ||||
