Reed to sell education division and focus online UPDATE

Reed to sell education division and focus online UPDATE

	Published : Thu, 15 Feb 2007 10:19 By : Agencies Print this Story

(Adds Reed Elsevier chief executive interview comments, detail, share price)

LONDON (AFX) - Anglo-Dutch publisher Reed Elsevier PLC surprised the market by announcing plans to sell its under-performing education division and focus on boosting online revenues as it reported full-year results slightly below expectations but said market conditions for 2007 were generally positive.

Reed, which counts the Lancet medical journal and New Scientist magazine among its 15,000-plus publications, said adjusted pretax profit rose 5 pct to 1.02 bln stg on revenue of 5.39 bln.

'2006 saw important progress in the development of Reed Elsevier's business,' chief executive Crispin Davis said in a statement. 'There is momentum behind our digital revenues driven by a widening range of

innovative online information products, increasingly embedded in customer

workflows.

'The planned sale of our Harcourt Education division announced today

sharpens our strategic focus and concentrates our resources on the digital

opportunities across an increasingly synergistic portfolio.'

The company said the strategy of its education business, which supplies school text books and assessments, had 'increasingly differed' from its legal, science and business-to-business publishing divisions.

Harcourt reported flat full-year revenues of 889 mln stg and a 20 pct fall in underlying operating profits.

Prior to today's announcement analysts were hoping to hear about improved prospects for Reed's education business, which has trailed the growth rates of the group's other divisions but outperformed a generally weak market.

Despite concerns over Harcourt's performance most analysts did not think an imminent sale of the business was likely.

In a telephone interview with reporters Davis said the company was selling a 'quality' education business at a time when the market was 'quite good'.

He declined to be drawn on how much the business could be worth but said Reed had appointed UBS to advise on the sale, adding that he hoped to complete the sale in the second half of the year.

News of the planned sale pushed Reed shares sharply higher, making it the top riser in the FTSE 100 share index.

At 8.21 am Reed shares were up 32.5 pence, or 5 pct, at 637, valuing the company at 8.97 bln stg.

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