Reed Elsevier shares shot up nearly 8 per cent yesterday after the publisher said that it would return to double digit earnings growth from this year.
The group said its restructuring programme,launched in 2000, had run its course and that the weakness seen in some of its markets had disappeared. As a sign of its confidence, the company pushed up its 2004 dividend by 8 per cent, saying it was moving from a "modest" pay-out policy to a "progressive" one.
Sir Crispin Davis, the chief executive who was reporting results for 2004, said: "In recent years we have made enormous strides in executing against our strategy for growth.
"Our markets have not been easy over that period but are now clearly on the turn."
Reed has four divisions: science and medical publishing, businesses-to-business, education and legal. The company said the softness seen in the education market in the US over the past couple of years would rebound "very strongly" in 2005.
In its business-to-business division, 2004 had seen the first growth in underlying revenues, which edged up 2 per cent, for nearly four years. Within that, the UK grew 5 per cent. Launches in the year included 10 new titles and five new exhibitions in China alone. Demand was rising for advertising in its magazines and the spin-off exhibitions.
Reed Elsevier also detected an improvement in academic science library budgets, which are expected to grow in 2005. It also suggested that a rival new business model in science publishing, where the author pays for publication, had not proved to be the threat that some in the City had perceived.
"After seven years, all the author-pays journals have less than 1 per cent market share. In 2004, the share actually slipped, slightly, because of fewer launches and concerns about the validity of the model."
Underlying turnover growth for the group was 3 per cent, compared with a flat performance in 2003.
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