Earnings: Reed Stands Up To Economy, But RBI Sale ‘Cannot Be Certain’

Managing to dodge the economy’s bullets in its remaining businesses, Anglo-Dutch science and business publisher Reed Elsevier (NYSE: RUK) told us what we already knew about the struggling efforts to sell its Farmers Weekly publisher Reed Business Information: “The process of divestment … is at an advanced stage, although, in the present economic and credit environment, a satisfactory outcome cannot be certain. As part of the process, a consortium of financing banks are in discussions with a small number of prospective buyers to provide financing. Reed Elsevier has indicated a willingness to provide financing support for any successful bid.”

The locks being put on doors to credit may be challenging would-be RBI buyers, but how is RBI itself doing? It’s “held up well during the year despite generally difficult economic conditions with strong growth in online information services more than compensating for declines in print”, Reed said, without giving figures. Now, though, it’s beginning to see “more challenging advertising markets” – no wonder Reed wanted to “reduce exposure to cyclicality” in announcing the sell-off in February.

With a focus on B2B and data publishing, Reed reckons it’s pretty sheltered from the wider consumer economic maelstrom. Outgoing CEO Crispin Davis: “Whilst the economic environment is undoubtedly challenging, our businesses are more resilient than most and we are in a strong financial position. We are continuing to invest in expanding our online product offerings to deliver enhanced customer productivity and effectiveness, and together with the restructuring programme we are tightly managing costs.” That said, it’s making savings of £15 million this year.

Subscriptions to the LexisNexis online legal article database have been hit by the worsening economy, with growth down on last year. Medical journals unit Elsevier said subscription renewals “remain strong”, with good demand in web services. Release.