RBI reports 37% drop in profit

Reed Business Information – which includes UK magazine brands such as Farmers Weekly, News Scientist and Flight International – has reported half-year adjusted operating profit down 37 per cent to £39m on revenue down 4 per cent to £463m.

The figures come as parent company Reed Elsevier reported a 25 per cent increase in revenue for the first half of the year to £3.06bn and a 29 per cent year-on-year drop in reported operating profit from £448m to £316m

RBI reported revenue of £134m in the UK, £135m in the US, £92m in the Netherlands and £92m elsewhere in the world.

RBI reported “a very difficult first half with advertising markets significantly impacted by the global economic recession”.

It said that subscriptions and online services account for just over 50 per cent of revenue and held up well, down 2 per cent year-on-year. But advertising revenues are down 30 per cent.

While online advertising revenue at RBI dropped 17 per cent, print advertising dropped 36 per cent.

RBI said today that such results “during the depths of global recession, point clearly to the resilience and attractiveness of RBI’s information and data services businesses and the vulnerability of print advertising”.

The company said that its “strategic imperative” now is to “continue to build up the information and data services businesses and to manage the migration of print advertising to online lead-generation services together with selective portfolio management”.

RBI said that in the UK, revenue from subscriptions was up six per cent which it said reflects the strength of services such as XpertHR, Bankersalmanac.com (which provides information that facilitates international interbank payments), and petrochemical information service ICIS Pricing.

Last week the Telegraph reported that Reed Elsevier chief executive Ian Smith had u-turned on plans to sell off RBI once the economy improves.

In a statement accompanying today’s results he said that the company’s current markets have good long-term growth prospects.

Smith said: “The downturn in macro-economic conditions over the last year has been severe and unprecedented. The biggest impact on our business is concentrated in advertising and promotion markets, including pharma promotion in our medical business, law firm directory listings in our legal business, and most particularly in business to business markets.

“Our markets have good attractive long term growth prospects. We have strong positions in these markets, and technology is enabling us to introduce new products and services to help customers increase their effectiveness and make them more successful.

“I am convinced that there is a bigger prize for our customers, employees and our shareholders by accelerating investment and stepping up our organic growth development. Despite the global recession, I believe that now is the right time to develop more aggressive market and product strategies to capture the market opportunities and increase competitive differentiation.”

In addition to RBI, Reed Elsevier comprises: Elsevier, LexisNexis and Reed Exhibitions.

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