My next chart sets out how the underlying operating profit performance is derived from changes in revenue and in the cost base. In Elsevier, underlying cost grew 1% against revenues up 2% to deliver the 4% profit growth. Cost increases from business growth and spending on new product and market initiatives were largely offset by tight cost control. At Risk Solutions, underlying cost growth was 2%, also reflecting the business growth and continued investment in new product initiatives offset by further cost savings, particularly in technology integration. This converted the 4% underlying revenue growth to 6% profit growth. In Legal & Professional, underlying profits were 2% lower on 1% revenue growth with underlying cost growth of 1% with increased spending on new product initiatives and in sales and marketing mitigated by continuing cost actions. In Reed Exhibitions, lower revenues and profits were driven by the next cycling out of biennial exhibitions. The cost reduction of 2% would have been greater, but for the accelerated launch program and higher show spend as markets recover.At RBI, underlying costs were flat reflecting the cost actions taken to streamline the business while the business returned to revenue growth at 2%. This gave underlying profit growth of 12%. Overall, underlying cost growth for Reed Elsevier in the first half was 1%. Taking into account the disposal of marginal and unprofitable businesses, total cost for Reed Elsevier declined 2% first half-on-first half at constant currencies to deliver the 3% overall profit increase on slightly lower revenues.
Reed Elsevier Plc's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Check Out Our Best Services for Investors
Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.