New Scientist and Computer Weekly publisher Reed Business Information is to be put up for sale, its parent company has announced this morning.
Reed Elsevier said the B2B magazines in its Sutton-based Reed Business Information division no longer fitted in with the rest of the company, because it was still heavily reliant on advertising.
The planned sale is part of a restructuring programme at Reed Elsevier, which will see the publicly listed company move away from advertising-funded products to focus on subscription-based services and events.
The news follows a period of stringent cost-cutting at RBI which has involved the non-replacement of staff. Hundreds of journalists are employed in Sutton – and RBI has a reputation as one of the industry’s best employers, with competitive salary banding and comparatively generous benefits arrangements.
The precise method by which RBI’s titles will be sold – either in one transaction or in parts – will be “the subject of review in the coming months”, the company said this morning.
Reed Elsevier chief executive Sir Crispin Davis said: “RBI is a well-managed high quality business as evidenced by the success of its online growth and the control of costs.
“Its advertising revenue model and the inherent cyclicality fit less well however with the subscription-based information and workflow solutions focus of Reed Elsevier’s strategy.”
In its 2007 end-of-year results, published this morning, RBI posted a £119m operating profit, with like-for-like revenue up three per cent to £906m. Around 60 per cent of this revenue came from advertising, and almost a third of RBI’s revenue was made online.
The Reed Exhibitions business, which Reed Elsevier is looking to keep, saw like-for-like revenues rise 12 per cent to £577m.
The combined publishing and events businesses recorded a 10 per cent increase in operating profit on a like-for-like basis to £260m, with margins up half a percentage point to 17.5 per cent.
Reed said there was no sign of a decline at RBI’s titles, despite “general uncertainty in markets such as property and construction”.
“The outlook for Reed Business is positive,” Davis said. “The demand for exhibitions remains good and advance bookings, particularly for the important first half of 2008, are encouraging.”
Reed Elsevier as a whole posted a two per cent increase in revenue to £4.58bn. Operating profit rose six per cent to £837m.