Shares in Reed Elsevier were flat on the FTSE 100 in morning trading after the technology and medical company reported a small rise in revenue and adjusted pre-tax profit in 2010.
Revenue in pound sterling was flat at £6.1 billion, as was adjusted pre-tax profit, which came in at £1.3 billion. In euros however revenue increased four per cent to 7.1 billion euros, while adjusted net pre-tax profit rose four per cent to 1.5 billion euros.
Erik Engstrom, Chief Executive Officer of Reed Elsevier, said, "During 2010, we also made good progress against the key priorities we outlined for each of the businesses at the start of the year. In Elsevier, subscription renewals for 2010 were completed in line with our expectations and the renewals process for 2011 is well progressed. We continued to develop new content and innovative tools, including the launch of SciVerse, an integrated platform for researchers."
"Going forward we will continue to focus on creating value for our customers, in each business unit and across Reed Elsevier. As we go into 2011, most of our markets are stable or improving and we are building on the actions taken in 2010 to strengthen the business further. Overall, we expect a gradual recovery and a continued improvement in performance."
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented, "Reed has delivered 'workmanlike' if somewhat unexciting results. Organic sales growth has been restored, with both management initiatives and a recovering economy playing their part. The group's measured transformation remains ongoing, with a push towards lower cost online content and investment being made in expanding publications and services.
"On the downside, government spending cuts continue to cast a shadow over academic scientific budgets, whilst competition in the group's legal arena remains intense. Furthermore, despite cautiously optimistic management outlook comments, the true litmus test remains the dividend, for which the payment remains unchanged.
"Nonetheless, the group's twin attributes of both defensive and cyclical revenues provide appeal to a wide range of investors, whilst group cost cutting is counterbalancing required investment in the group's future. In all, despite necessary patience, cyclical sales upside remains front of mind, while potential for more substantive longer term restructuring continues to be mulled. As such, market consensus opinion currently denotes a buy."
By 10:25 shares in Reed Elsevier were flat on the FTSE 100 at 559.50 pence per share.