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UPDATE 2-Reed Elsevier reaffirms outlook, names new chairman

Published 04/21/2009, 04:20 AM
Updated 04/21/2009, 04:24 AM
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* Appoints Anthony Habgood chairman

* Still expects constant currency EPS growth in 2009

* Sees profit decline in B2B businesses

* Shares edge up in London, in line with market

(Adds further detail, reaction, shares)

By Paul Sandle

LONDON, April 21 (Reuters) - Anglo-Dutch publisher Reed Elsevier reaffirmed its full-year forecast to grow earnings despite significant profit declines in its business-to-business markets.

The company, which expects to grow adjusted earnings per share at constant currency in 2009, also on Tuesday appointed Anthony Habgood, chairman of Bunzl and Whitbread, to succeed Jan Hommen as chairman from June 1, 2009.

Shares in the group, which have increased 14 percent since touching a five-year low of 437.5 pence in December 2008, had edged up 0.3 percent to 501 pence by 0753 GMT in London, broadly in line with the market, and were flat in Amsterdam.

Analysts at Panmure Gordon said the update was a near echo of the group's outlook in its full-year results in March, with no signs of green shoots or new news.

They said forecasts were unlikely to change, but the appointment of Habgood should be taken well, as he had a "good CV and was well regarded from previous roles".

Reed Elsevier said in the update ahead of its AGM it expected "satisfactory" revenue development and further underlying margin improvement in its Elsevier science and technology business in 2009.

Its science and technology journal subscriptions were largely completed and were expected to close at last year's record level of 98 percent, it said.

It also expected limited underlying revenue growth this year in its LexisNexis legal business despite the impact of lower law firm activity and pressure on corporate and government budgets.

Its business-to business divisions, which include exhibitions and business information divisions, however, would both report lower adjusted operating margins and reduced revenue, reflecting less demand for exhibition space and falls in advertising, it said.

The group said its restructuring programmes were progressing well and were on track to deliver expected cost savings of $205 million in 2009 and $350 million by 2011.

It said it remained in a strong financial position, with excellent cash flow generation and it expected to have more than sufficient resources to repay the two-thirds of its $2.2 billion debt due to mature in 2011. (Editing by Jon Loades-Carter)

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