British directories firm Yell soothed the nerves of investors today as it continued its battle against “fierce” competition in the United States.
Yell’s guidance for 3% organic full-year growth at its Yellow Book arm was significant after shares tumbled in April on a warning about US prospects.
Yellow Book grew 1.9% in the first six months of the financial year, but Yell has pledged to improve that figure through new products and staff training.
In the UK, where Yell faces regulatory controls, half-year revenues were up 3% to £362.3 million. That was driven entirely by a 51.7% increase at Yell.com, which more than offset the expected 4.4% decline in print revenues.
The current inflation minus 6% price control – effectively forcing Yell to cut its Yellow Pages prices – is due to be scrapped in March.
The effect of the regulatory undertaking was to reduce Yellow Pages rate card prices by an average of 3.3% during the six months. The number of print advertisers in the six months declined by 4.7% to 224,000, largely as a result of competition.
Across the group, including Yell’s operations in Spain, revenues rose 13.7% to 965.4 million in the six months to September 30. Adjusted earnings were ahead 19% to £319.8 million, in line with market expectations.
Chief executive John Condron said: “Yellow Book’s performance is as expected but the US market remains very competitive. Yell UK has taken the first steps to realise the opportunity that more even-handed regulation will give us.”
Shares opened 2% higher today before settling near their opening mark at 426.25p.