Reed may face probe into profit warning

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REED ELSEVIER, the Dutch holding company for the Anglo-Dutch publisher Reed, may face an investigation by the Amsterdam stock exchange into a profits warning the company issued on Monday, according to reports in continental newspapers.

The Dutch shareholders association, VEB, called for an inquiry after Reed warned that profits would fall by an unspecified amount because of problems at its electronic publishing and business-to-business divisions.

The Dutch newspaper De Telegraf reported two weeks ago that analysts had been told profits would fall sharply, causing an 8 per cent drop in its share price. Reed then denied there had been an analysts' briefing. Five analysts later said they were confident profits would not fall but remain flat, as previously expected. The share price recovered, only to fall again after Monday's warning.

Pieter De Vries, director of the shareholders association, said: "It seems extremely unlikely that the company wasn't aware of the disappointing results two weeks ago. Publishing is a very predictable business."

The Amsterdam stock exchange is now planning to launch an investigation into whether Reed should have released the warning earlier, according to a separate report in Algemeen Dagblad.