Reed Elsevier, the Anglo-Dutch publisher, today said that it was on the lookout for online acquisitions as it posted flat first-half revenues, weighed down by the weak dollar.

The company is targeting what it calls the "e-health" and "risk management" sectors, in the belief that the push to online medical information and greater security can deliver double digit revenue growth. It has around $500 million a year in free capital to spend.

Sir Crispin Davis, chief executive, said that he thought he could develop Reed's e-health activities from $200 million a year currently to "$1 billion in the next five years"; while the company's $500 million risk management business should increase "two to three times" in the same time frame.

In the past nine months, Reed has bulked up its online presence through the acquisition of BuyerZone, a US online business for matching suppliers to business customers, and Emedia, a UK online marketing business.Those deals were each worth less than £100 million, but Crispin Davis, the chief executive, said that he is now considering larger acquisitions.

He was speaking as Reed reported interim results, shortly after it announced the $4 billion sale of its US education business to Houghton Mifflin Riverdeep. Reed said that sale would not be earnings dilutive, while Sir Crispin added that the company was "not a long term holder" of the 12 per cent stake it acquired in the purchaser.

The results gave a sense of why Reed was keen to exit. Revenues from continuing operations were up 6 per cent on a constant currency basis, although the strength of the dollar meant that on a reported basis turnover was flat at £2.2 billion. Pre tax profit was up 13 per cent at £350 million.

However, revenues at the soon to be offloaded education arm fell by 17 per cent to £322 million, although Sir Crispin said that this was partly due to the timing of educational textbook purchases in the US. "The percentage fall looks large, but if you look at the actual figures it's quite small". Most of the key purchasing is done in the second half of the year.

Elsewhere was robust, with Elsevier, the science and health unit, reporting 10 per cent profit growth on a constant currency basis, to £298 million. Legal and risk management division, Lexis Nexis, improved income by 13 per cent stripping out the impact of the dollar, to £260 million; while Reed Business, the professional publishing and exhibitions unit, saw a 7 per cent improvement like-for-like at £229 million.

Sir Crispin said that he no intention of leaving Reed, but added that he had learned from the company's ill-fated foray into education that "you should be careful about entering into new sectors". Reed today said that following that sale it will return about £2 billion to shareholders in proceeds via a special dividend in the first half of 2008.

The company said that it was on track to achieve a minimum of 10 per cent growth in adjusted earnings per share for 2007, excluding currency fluctuations. Reed increased its interim dividend by 10 per cent to 4.5p a share.

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