Reed Elsevier says could return more cash to shareholders

BARCELONA Wed Nov 20, 2013 1:15pm EST

BARCELONA (Reuters) - Business information group Reed Elsevier (ELSN.AS) (REL.L) said it could return more cash to shareholders after investing in new products to grow revenues and making bolt-on acquisitions.

Chief Executive Erik Engstrom said the group, which provides information to lawyers, finance professionals, doctors and scientists, had been transformed from making more than half of its revenues from print-based products five years ago to a digital information provider.

The company has disposed of millions of pounds of businesses, and now has 600 million pounds ($966 million) of annual free cash flow after paying tax, interest and dividends.

Engstrom said his top priority for cash flow was organic growth, and then small acquisitions.

"Over four years we've seen on average that takes off about half our free cash flow after dividend," he said at the Morgan Stanley Technology, Media and Telecoms conference in Barcelona.

"That means we've brought down our leverage over that time period. Now we are in a leverage position we are very comfortable with (...) and therefore we see the opportunity to return cash to shareholders in different ways beyond acquisitions and we've done that in the last 12 months.

"The philosophy behind that will continue to be the same."

($1 = 0.6210 British pounds)

(Reporting by Paul Sandle; Editing by Elaine Hardcastle)