EVERYONE agreed: the backslapping at Reed Elsevier’s annual meeting last April was worth it.

Few companies last 100 years, but the publishing business had been around for a century and it was cause to bring out the champagne.

There were also more immediate reasons to be cheerful. Reed had achieved three years of good growth in a struggling sector. The once troubled Anglo- Dutch company had been tranformed under the guidance of its chief executive, Crispin Davis, — an unlikely media- industry darling who found the adulation slightly unsettling.

Not for Davis the flamboyance of Carlton’s Michael Green, or the larger-than-life bravado of Richard Desmond. Davis is the ultimate man in grey suit whom investors grew to love as the performance of Reed got better and better. The awards poured in, and Davis rightfully became feted as one of the UK’s most succesful managers.

Nine months on, the fizz is a bit flatter and Davis’s reputation as the great performer of the sector is under threat.

From the heights of a year ago, the shares have fallen 10.6% and the stock has underperformed the FTSE All-Share index by 24% over those 12 months.

During that time there have been high-profile, executive departures from the big American arm of Reed. And there has been another problem, also in America: the science- publication division has been hit in a revolt by academics and institutions.

Previously loyal investors and analysts are now beginning to conclude that in a market that looks like it is picking up again, maybe they can no longer afford to stick with Reed. Perhaps they are better off with media companies that are going to benefit more from the advertising upturn.

Profits continue to pour in, but Davis recently had to warn that the rate of earnings growth at Reed is slowing to single- digit speed.

For the man the City has got used to calling “Mr Ten Per Cent” — capable of achieving 10% earnings growth or more every year — it is a testing time. Investors say that Davis now faces a choice: sit tight and support what he has put in place or try to improve the climate by expanding the Reed portfolio and add a fifth leg to the four core businesses.

Reed, which has a market value of £10.5 billion, including the UK plc and the Dutch-listed business, publishes magazines such as The Lancet and Variety, plus a host of education, science and medical titles. Its science and medical leg encompasses 1,200 publications, and its legal division includes the LexisNexis online research tool, which is also used by business.

Its education operation includes Harcourt, the third- largest textbook-publisher in the US, which was acquired by Reed in 2001 for £3.1 billion. But this year few states are buying textbooks and that means less cash for Reed.

The business division is Reed’s fourth leg. It provides information and marketing solutions to companies.