The first half of 2004 went pretty much according to plan at Reed Elsevier, executives at the giant company reported. Total revenue fell 3%, to £2.26 billion ($4.1 billion), although revenue was up 4%, excluding foreign currency translations. Pretax income increased 6% (11% excluding currency changes), to £433 million. Reed is "on track" to deliver above market revenue growth and mid to high single-digit earnings per share growth—at constant exchange rates—for the full year, executives said.
At Harcourt, total sales were £359 million, a 6% gain at constant exchange rates, with sales in the U.S. schools and testing business up 2%, to £292 million, while international sales rose 6%, to £67 million. In the U.S., despite a solid performance in the adoption market, school group sales fell 4%, due to fewer adoption opportunities and tight state budgets. New state testing contracts contributed to a 16% sales jump in Harcourt's assessment group, although Reed said it does not expect the testing unit to grow at the same rate in the second half of the year. For all of Harcourt, sales are expected to finish 2004 flat with 2003, while operating margins will decline slightly.
Total sales at Elsevier, Reed's science and medical publishing subsidiary, rose 3% at constant exchange rates, to £631 million. Sales were up 3% in both the science and technology division (to £391 million) and the health sciences division (to £240 million). In science and technology, revenue gains were led by strong subscription renewals and higher online sales. Book sales are expected to improve in the second half of the year. Gains in health sciences were paced by electronic sales.
At LexisNexis, revenue increased 5%, at constant exchange rates, to £614 million. North American sales rose 4%, to £455 million, while sales in the international market rose 7%, to £159 million. Sales in the U.S. legal market were up 6%, due in part to the acquisition of Applied Discovery. Online sales increased 12%, somewhat offset by a 2% decline in print and CD sales. Sales to the corporate and federal markets were up 4%.
In the Reed Business Information segment, total sales rose 4%, to £659 million due mainly to a 12% increase at Reed Exhibitions. Sales in RBI's U.S. group, which includes PW, were down 3%.
