Yell warns of earnings shortfall

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The owner of Yell.com and Yellow Pages has issued a warning about full-year earnings after a drop in revenues

The owner of Yellow Pages and Yell.com has warned full-year earnings will come in short of expectations following an 11.8% drop in revenues.

Yell pledged to unveil a review of strategy in the summer following further tough trading, which saw turnover slump to £1.35 billion and underlying earnings fall 19% to £386.7 million in the nine months to December 31.

It said full-year underlying earnings are now expected to come in “slightly” below expectations, sending shares down 7%.

Yell has suffered in recent years as its print business has been hit by competition from the internet, while the difficult economic climate has added to its troubles by hitting confidence among its 1.4 million small business customers.

Revenues were dragged lower as print sales continued to come under pressure, down 18.4% to £936.6 million.

But chief executive Mike Pocock said the group is fighting back as its Yell.com and digital media offering helped digital revenues up 10.4% in the period.

He said he had already begun an in-depth review with chief finance officer Tony Bates and would report back in the summer.

Mr Pocock admitted it would “take time” to halt the revenue falls, but added: “We can see a course for Yell to return to sustainable profitable growth and we believe Yell has the business base and financial strength to achieve this.”

Yell has been cutting costs to be able to invest in new product development, website changes and to increase its sales workforce.

The group said it is upping its game in the mobile internet market, such as with smartphone applications.

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