UPDATE 2-Reed Elsevier says 2008 on track, shares rise

(Adds shares, analyst comment, details on RBI divestment)

By Georgina Prodhan, European Media Correspondent

LONDON, July 31 (Reuters) - Publisher Reed Elsevier Plc/NV said it was on track to meet its 2008 goals despite a more challenging economic backdrop, after first-half profit beat expectations, lifting its shares more than 5 percent.

Operating profit adjusted for amortisation, restructuring and integration costs rose 12 percent at constant currencies to 557 million pounds ($1.1 billion), Reed said on Thursday, or 619 million including discontinued operations.

Sales from continuing operations rose 5 percent at constant currencies to 1.97 billion pounds, driven by strong growth in online information and so-called workflow solutions embedded in the way that customers work, Reed said.

As well as trade journals and books for professionals, Reed owns the world's biggest exhibitions business, which had a strong first half with adjusted operating profit up 16 percent and sales up 9 percent at constant currencies.

"Whilst the professional markets we serve are not immune to economic cycle effects, they are more resilient than most," Reed said in a statement.

"We remain on track to deliver on our goals this year of good revenue growth, meaningful margin improvement and accelerated earnings growth."

Shares in the Anglo-Dutch group rose 5.3 percent in London (REL.L) to 573-1/2 pence and 4.4 percent in Amsterdam (ELSN.AS) to 10.62 euros by 0909 GMT, outperforming a flat DJ Stoxx European media index .SXMP.

"Reed has reported very strong interim results ... ahead of our, and market estimates," analysts at brokerage Numis wrote in a note.

"We continue to view Reed as the safe haven in the sector and are attracted by the resilience afforded by the group's scientific, legal and exhibitions businesses."

TRADE MAGAZINES SALE

Pearson Plc (PSON.L), the world's biggest educational publisher, reported strong first-half results and a confident outlook last week, but Dutch rival Wolters Kluwer NV (WLSNc.AS) said on Wednesday its first-half results were hit by the credit crunch.

Reed trades at 12 times expected 2009 earnings, according to Reuters Estimates, in line with Pearson and above the media sector average. Its stock has fallen 22 percent since the start of the year, outperforming a 28 percent drop in the DJ Stoxx European media index .SXMP.

Reed said the divestment of its trade-magazines business RBI, which it wants to sell to further reduce its exposure to cyclical advertising spending, was progressing well with a high level of interest from potential buyers.

"There has been a good level of interest, particularly from a wide range of private equity companies," Chief Executive Crispin Davis, who confirmed media reports he would step down next year, told journalists on a conference call.

He declined to comment on what price Reed hoped to fetch for the business, which includes titles such as Variety, New Scientist and Farmers Weekly.

Sources familiar with the matter have told Reuters that first-round bids are expected to range from $2 billion to $2.5 billion and are due by Aug. 11.

Davis confirmed a Financial Times report it was offering $330 million of vendor financing to help offload the business and said he aimed for a deal in the second half.

He added he would be prepared to break up the business if necessary. "Our preference would be to sell as overall one unit but at the end of the day we'll do what maximises shareholder value. If that requires selling it in pieces we're prepared to do that." (Editing by David Holmes)