Reed Elsevier confirms gloomy outlook as subscriptions remain weak

REED Elsevier yesterday reaffirmed its outlook for a slightly lower operating profit margin this year as subscriptions to its scientific and legal publications remained weak.

The Anglo-Dutch company has been slow to respond to economic recovery as corporate subscriptions come up for renewal only periodically, and are worth less as firms employ fewer staff – a fact that protected it in the early stages of the recession.

It has also been investing heavily in its Lexis Nexis legal business in the United States, where it is working to reverse a long decline in market share against Thomson Reuters’ Westlaw.

A company spokesman said: “A modest reduction year on year in adjusted operating margin is expected, due to a weak revenue environment and increased investment in legal markets. Any sustained recovery is expected to be gradual and remains dependent on economic conditions.”

Reed said it was making good progress in developing legal products for the US market, although subscription renewals continued to reflect low levels of legal activity.

This week, Reed agreed to sell Lexis Nexis Deutschland to Wolters Kluwer, effectively ceding the German market to its Dutch rival, which has invested there for a quarter of a century.

Reed said yesterday its exhibitions business – the world’s largest, which includes the annual mipcom entertainment fair and the Vienna Auto Show – was stabilising. It expects to grow this division over the next year.