New digital strategy can’t stop Yell’s drop
SHARES in Yell took a steep tumble as the directories group revealed its revenues dropped 15 per cent to £382.8m in the third quarter.
The company, which has suffered in the rise of the digital era, said revenues from print and directory enquiry services were down 22 per cent to £269.8m, sending Yell’s stock to its lowest point in almost three months.
Yell chief Mike Pocock said: “The deteriorating macro environment and a more competitive digital directory market are driving a faster rate of directory revenue decline.”
The Reading-based group lost almost 50,000 print advertisers in the quarter.
However, Yell ended the three month period with a net profit of £16.6m, considerably higher than last quarter’s £1.6m. Its digital services arm grew revenues by 112 per cent to £35.4m, but it still accounts for less than a tenth of overall sales.
Despite revenues from Yellow Pages online dropping almost 16 per cent to £77.6m as its visitor rate declined by a quarter, combined digital operations – including services and directories – accounted for almost 30 per cent of total group revenue, up from 26 per cent.
Total digital customers grew 10 per cent to 945,000.
Pocock said: “We expect this growth to accelerate as our strategic new products come to market.”
The group marginally reduced its £2.6bn net debt by £67.3m after amending covenants with lenders in December, costing £22m in fees.
Shares, which hovered between £3 and £6 when Yell was in the FTSE 100 before March 2008, fell 19 per cent to close just under 5p.