Reed International shares rose strongly in London after Anglo-Dutch publisher Reed Elsevier announced better than expected first half profits.

Although substantial investments in internet projects cut first half adjusted pre-tax profit by 5.4% to �351m ($529m), it was ahead of analyst forecasts of �324m-�340m.

Reed, which is also listed in the Netherlands as Elsevier, saw its shares jump after the announcement.

In London, they were up 7.4% on the day.

In Amsterdam, Elsevier shares closed 6.9% higher at 13.60 euros.

Internet projects

In February, Reed said it would invest �750m in internet projects over three years in an attempt to turn around the company's fortunes.

"Execution against those plans is firmly on track," said chief executive Crispin Davis.

"We are increasingly confident that our strategy will deliver the superior growth and shareholder returns that we have targeted."

He said Reed had spent �110m on internet projects in the first half and would invest a further �150m before the end of the year.

More possible purchases

After several acquisitions this year, including trade exhibition organiser Miller Freeman Europe and US application service provider eLogic, Reed was still looking at more possible purchases, Mr Davis said.

These included US textbook publisher Harcourt General, which was put up for sale in June.

Acquisitions so far this year have cost �876m, Reed said.

Mr Davis said the group was on course to achieve �140m in cost savings this year, beating its initial target by �10m.

Reed's annual cost savings goal of �170m was expected to be met in 2001, he said.

The interim dividend was cut by a third from last year to 3.1%, as expected.