Disappointment tantrum

11 March 2003

The publisher has delivered some modest incremental bad news that clarifies its preliminary results statement. Disappointed investors have reacted with all the coolness of a toddler.

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Wolters Kluwer has suffered a 15% fall in its share price following its announcement that it expects earnings to fall 6% in 2003. Confirming a preliminary statement in which it reported a 1% rise in organic revenues in 2002, the publisher said it did not see any shortterm improvement in trading conditions. During the coming year, it expects to carry on with its programme of investment to transform its business from conventional paper publishing to electronic media, as well as looking to build market share though acquisitions. It also announced that its new chief executive will be Nancy McKinstry, who currently heads its North American Legal, Tax and Business arm.

Wolters' share price has fallen from E17 at the start of January to E10. Its current price/earnings ratio of under 9 times 2003 earnings is a discount of a third to peers like Reed and Pearson.

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