Total revenue at Reed Elsevier rose 13.4%, to £2.04 billion ($2.91 billion), for the first six months of 2001, ended June 30. Adjusted operating profit increased 11.1%, to £438 million ($626 million), while net profit fell 30%, to £71 million ($101.5 million). The decline in net profit was attributable to a number of extraordinary items including costs associated with acquisitions, most notably Harcourt General. The purchase of Harcourt was completed July 12 and its results are not included in Reed's first half performance.
Among the highlights in Reed's U.S. operations in the first half of the year was a 19% sales increase at its supplemental publisher, Rigby; Rigby already has been merged with Harcourt's supplemental publisher, Steck-Vaughn. Revenues at LexisNexis North America rose 15.2%, led by a 9% increase in online sales that offset lower print sales.
Reed said the integration of Harcourt is well underway and that it expects to meet its target of saving $45 million annually within the next 18 months. The company expects to save $25 million by closing Harcourt's Newton headquarters by the end of the year. The American education and testing businesses will continue to be managed by their existing management teams, although Reed expects to appoint a new global CEO for education "in due course." The Harcourt trade division, headed by Dan Farley, remains part of the school group run by Tony Lucki.
The addition of Harcourt has coincided with the shedding of noncore assets, and Reed said it expects to complete the sale of Bowker and other directories before the end of the year.
