Reed Elsevier, the Anglo-Dutch media group, has kick-started plans to sell off its education division, as it seeks to focus its investment on its three other divisions.

Sir Crispin Davis, the chief executive of the FTSE 100 group, said that the sale of its Harcourt Education business would "sharpen its strategic focus", allowing it to concentrate on internet opportunities in its key science and medical, legal and business markets.

Harcourt Education is a specialist textbook publisher, serving primary and secondary school markets, with a particular focus on the US.

It also conducts educational and psychological testing in the US, the UK and France.

Background

• Reed Elsevier to quit arms exhibitions

• Cinven eyes Reed assets

• Reed evolves to go with the flow

• Reed Elsevier to sell education arm after poor performance

• Pearson buys Reed text book arm for £425m

Reed sale shows faith in internet

Companies are not talking about future earnings online, they are making money from the internet now, Reed's decision expresses this

Related Internet Links

• Reed Elsevier company information

• Reed Elsevier share price chart

• Reed Elsevier forecast

Pearson, McGraw-Hill and Houghton Mifflin control, with Harcourt, some 90 per cent of the US textbook market. The business could fetch in the region of £1 billion. However any interest from Pearson could be scuppered by competition issues, while the ongoing sale of education businesses by Thomson Learning and Wolters Kluwer, the rival media groups, could lessen interest.

The proposed sale will leave Reed Elsevier focused on its science and medical unit, which publishes journals, databases and books; its legal operation, which provides news and public record information under the LexisNexis brand; and its business division, which publishes magazines such as Farmer's Weekly, New Scientist and the entertainment industry newspaper Variety.

Sir Crispin said that the proceeds from the Harcourt sale would be returned to shareholders.

The announcement came as the group reported a dip in Harcourt's fortunes amid declining textbook markets in the US. The division reported a 20 per cent drop in operating profits to £129 million for last year, with US textbook markets estimated to have weakened by 6 per cent in 2006.

Revenues fell 1.3 per cent to £889 million over the same period.

The group's performance showed improvement, with underlying pre-tax profits up 5 per cent to £1.05 billion last year, on revenues up 4 per cent to £5.4 billion.

The company said that revenue growth was driven by a 10 per cent improvement in revenues from its digital businesses, which it said would play a big part in future strategy as it uses its existing content and brands to roll out more profitable services.

Sir Crispin also said that the rise in sales of subscription-based products was making revenues more predictable.

He noted that conditions in the group's markets looked "generally favourable" for this year.

Reed Elsevier shares were trading up 32.5p at 637p by 9am. You can track the shares here.

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