The company, which publishes a range of scientific, business and legal magazines said it expected yearly pre-tax profits to be just £770m, 6% below last year's figure and earlier expectations.

Shares in the group fell by 20p to 433p on news of the warning.

Strong pound

As well as a drop in demand, the company has also been hit by the strong pound, which has made its European publications less profitable.

Reed Elsevier, which publishes The Lancet, Computer Weekly and Farmer's Weekly in the UK also produces a range of magazines and journals in the US and Asia.

The company said: "The 1998 results are particularly affected by the decline in the profitability of the travel publishing businesses."

Loss of magazines

Reed Elsevier said that earnings had also been weakened from the sale in January of IPC Magazines, which publishes consumer magazines such as TV Times, Loaded and Marie Claire.

"Trading conditions in some of Reed Elsevier's markets have become more difficult since the interim results were announced in August," it added.

The company's involvement in electrical publishing has not produced the desired results.

"Stronger competition in both the US legal and business online information markets has resulted in slower online revenue growth," Reed Elsevier said.