Elsevier profits up 3% despite 'steeper' print declines

Elsevier increased its sales and profits in 2016, in spite of what it described as "steeper declines" for print book sales than in recent years, "reflecting market conditions".

Revenue at Elsevier - RELX Group's STM (scientific, technical and medical) arm - increased by 2% in underlying terms to £2,320m (2015: £2,070m) and adjusted operating profits rose 3% in underlying terms to £853m (2015: £760m).

RELX Group reported, with respect to Elsevier, that key business trends "remained positive", with primary research showing "strong growth" in usage and article submissions, and that 64 new journals were launched. It also reported "good growth" in databases and tools, and in electronic reference products, although small underlying margin improvement was partly offset by exchange rate movements. 

Overall revenue at RELX Group increased by 4% in underlying terms to £6,895m - a result the company said was "partially offset by continued print revenue declines" - while underlying adjusted operating profit grew by 6% to £2,114m. 

For 2017, the company said it expected the customer environment for Elsevier to remain largely unchanged. "Overall we expect another year of modest underlying revenue growth, with underlying operating profit growth continuing to exceed underlying revenue growth," it said.

Anthony Habgood, chairman, said: "RELX Group has continued to execute well on its strategic priorities, and the gradual improvement in our revenue growth rate reflects the progress that has been made. We are proposing a larger than usual PLC full year dividend increase primarily due to exchange rate movements. Our long term dividend policy is unchanged."

Chief executive officer Erik Engstrom commented: "We achieved good underlying revenue growth in 2016, and continued to generate underlying operating profit growth ahead of revenue growth, with underlying revenue and adjusted operating profit growth across all four business areas."

"Our strategy is unchanged: Our number one priority remains the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers. We believe that the systematic evolution of our business has driven an improvement in our business profile and the quality of our earnings, with more predictable revenues, a higher growth profile, and improving returns."

"Key business trends in the early part of 2017 are consistent with the early part of 2016, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2017."