Reed Business Information, the business magazine division of Reed Elsevier, is to look for additional cost savings as it embarks on an ambitious plan to get sales of online publications to account for more than half of total revenue in the next three years.
Keith Jones, chief executive of the division which publishes titles such as New Scientist and Variety, wrote to staff at the end of last week outlining how RBI needed “additional cost-cutting fast,” saying that duplication of costs has to stop and that “some things must be done differently or not at all.”
The staff memo, which was seen by Dow Jones Newswire and reported by Wall Street Europe last night, said RBI aimed to grow operational profit and revenue faster than the rate of inflation.
The memo said RBI wanted to raise the sales from online publications to more than 50 per cent of its total revenue in the next three years, according to WSJ Europe. However, it did not specify revenue targets or which areas would be looked at for cost savings.
RBI reported a half-year adjusted operating profit fall of 37 per cent to £39m in July, with revenue down four per cent to £463m.
Shortly before that announcement reports emerged claiming Ian Smith, the new chief executive of Reed Elsevier, was planning to scrap the proposed sell-off of the business magazine division.
Reed was forced to postpone its proposed sale of RBI in December last year after it failed to find a buyer.
Under previous chief executive, Sir Crispin Davis, Reed said RBI was considered a non-core asset by the company and it would attempt to sell it again at a later date, in the “medium term” when conditions in the market improve as it was heavily reliant on advertising revenues and no longer fitted in with the rest of the company.
In February, Reed said it was looking to make up to £100m a year in cost savings at RBI. Restructuring plans cuased unrest with staff in the UK and members of the National Union of Journalists balloted on possible industrial action.