Reed's first-half results show pre-tax profits halved and share issue

Shares in media group Reed Elsevier dipped on its interim results which revealed a near 10% share issue in a bid to maintain its credit rating.

The Anglo-Dutch company, which publishes New Scientist among other titles, posted revenues up 3% to £3.06bn for the first half of 2009, but pre-tax profits dropped from £393m to £188m year-on-year.

The company announced it would be taking a number of measures to strengthen its balance sheet, following the acquisition of ChoicePoint and its failure to sell off Reed Business Information, that included the placing of a share issue equivalent to 9.9% of issued share capital.

The issue raised £824m which will help the company pay off debt and protect its credit rating and, although demand for the shares was reportedly three times the number available, share values dropped more than 10%.

Reed will also attempt to sell off its closed circulation US publications, but will keep flagship titles such as Variety.

Reed Elsevier chief executive officer Ian Smith said: "The biggest impact on our business is concentrated in advertising and promotion markets, including pharma promotion in our medical business, law firm directory listings in our legal business, and most particularly in business-to-business markets.

"Our markets have good attractive long-term growth prospects... I am convinced that there is a bigger prize for our customers, employees and our shareholders by accelerating investment and stepping up our organic growth development.

"Despite the global recession, I believe that now is the right time to develop more aggressive market and product strategies to capture the market opportunities and increase competitive differentiation."

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