The directories group Yell issued a profit warning alongside disappointing third-quarter results yesterday, sending the Yellow Pages owner's stock down by 11 per cent by the end of the day's trading.
Group revenue dropped by 12 per cent to £1.4bn in the nine months to the end of December, while profits collapsed from £47.6m to £23.4m, the company said.
Yell is struggling as printed directory listings shift to the internet. It has also been hit hard by the impact of the recession on its small-business customers.
Although digital media revenues were up by slightly more than 10 per cent to £342m in the first three quarters of the year, print revenues dropped by more than 18 per cent to £937m. And full-year earnings are now expected to come in "slightly below" expectations. The newly appointed Yell chief executive Mike Pocock – who joined the company from IT networking specialist Cisco at the start of the year – will unveil a new strategy for the company this summer.
Mr Pocock yesterday acknowledged the challenges the company faces from "economical pressures and, more fundamentally, from the shift to digital media".
But he stressed the value of the Yell brand and its 1.4 million-strong customer base among small and medium-sized businesses. "It will take time to change the revenue trajectory and to secure the available synergies but 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," he said.
Mark Payne, a former vice-president at Cisco, is to join Yell as chief operating officer.