Shares in Anglo-Dutch publishing group Reed Elsevier PLC (ENL) plummeted Thursday after it posted a sharp fall in first half net profit, lowered its guidance and announced plans to raise hundreds of millions of pounds in a share placing as the economic slump began to hurt previously resilient parts of its business.

The planned share placing underscores the continued drag on earnings from its business information unit, RBI, which it failed to sell last year and which is severely exposed to the advertising slump.

Net profit in the six months to Jun. 30 fell 48% to GBP161 million, from GBP309 million a year earlier, mainly on restructuring, impairment and other financial charges.

Reed Elsevier lowered its guidance for 2009, saying that it expects adjusted earnings per share growth to be "under some pressure for the full year" at constant currencies. Earlier this year it said it expected adjusted earnings per share to grow.

"The downturn in macro-economic conditions over the last year has been severe and unprecedented", Chief Executive Ian Smith said in a statement. "The depth and length of the downturn is, however, having some effect on even our most resilient businesses."

The company said the outlook remains challenging and that overall organic revenue and operating profit will remain under pressure this year, and said it will examine every opportunity to increase cost efficiency further.

To shore up its balance sheet, Reed Elsevier said it plans a share placement of up to 9.9% of its issued share capital in both London and Amsterdam, where it is listed, which in total would amount to 172.2 million new shares. At current prices, Reed would raise around GBP450 million in London and approximately EUR450 million in Amsterdam, but the issue is likely to be at a discount to current prices.

The company also said it needed to take further action after it failed to sell its troubled Reed Business Information unit, or RBI, last year. The proceeds of that sale were to be used to pay off the $4.1 billion of debt that it racked up for the acquisition of data aggregation firm ChoicePoint in 2008. After the failure of the RBI sale, Reed issued bonds to help pay down that debt.

During a conference call, Smith said that selling RBI as a whole is now off the agenda, and that Reed is now only looking to sell controlled circulation magazines in the U.S., which are part of RBI.

The company also said that its most resilient businesses, content archive service Lexis Nexis and medical and scientific publisher Elsevier, weren't immune from the downturn. On a pro-forma basis, which includes the contribution of ChoicePoint to Lexis Nexis, underlying revenue was flat at these units.

Adjusted operating profit, a figure closely watched by analysts and which includes amortization, joint-ventures and exceptional items, of GBP782 million, up 26% compared with GBP619 million last year. In constant currencies however, adjusted operating profit was up only 5%.

For the total group, revenue for the first half rose 25% to GBP3.06 billion, and 3% in constant currencies, chiefly as a result of the acquisition of ChoicePoint. Organic revenue, which strips out ChoicePoint, fell 7%.

Around 1235 GMT, Reed Elsevier shares traded 13.9% lower at EUR7.19 on an overall higher AEX market in Amsterdam. In London, meanwhile, shares fell 13.8%, or 66p, to 414p, by far the biggest faller on a overall slightly higher FTSE 100.

Company Web Site: www.reed-elsevier.com

-By Maarten van Tartwijk; Dow Jones Newswires; +31 20 571 5201; maarten.vantartwijk@dowjones.com