Yell Revenues Slump As Revamp Takes Time

Yell Group has posted a 15% fall in revenues as it emerged the debt-laden publisher of the yellow pages has been given extra time to implement a turnaround strategy.Revenues fell to £382.8m during the British company's third quarter, falling short of analyst estimates of £404m.Sales of print and other directory advertising slumped 22% to £269.8m in the three months to the end of December, with income from digital directories down 16% to £77.6m.Yell's shares plunged by as much as 25% on the news.Directory publishers like Yell have been struggling to stem the slide in their print businesses as more people turn to Internet-based giants like Google to find local listings.As a result, the firm has tried to reinvent itself through schemes such as providing digital services - including virtual stores - for small businesses.This helped revenues from digital services at Yell double to £35.4m over the last quarter - but the new strategy has yet to offset the falling revenues in print and digital directories.The group is also trialling community newsletters to help fill the gap in its print business and take advantage of the decline in local newspapers. The trial is currently in the US but the scheme could be brought to the UK.On posting the third quarter results, Yell said its lenders had agreed to relax covenants tied to earnings, releasing an additional £51m for the Berkshire-based company to buy back its undervalued debt and implement its turnaround plans.Its debt stood at £2.5bn on December 31, a reduction of £67.3m driven by tight cost controls.Yell chief executive Mike Pocock said the company had made good progress with its new strategy during the last quarter.He added: "Our digital services revenue continued to grow strongly. We expect this growth to accelerate as our strategic new products come to market."