Yell shares slumped after it reported plunging revenues and warned of future debt issues.
In the quarter ending 31 December 2011, Yell’s revenues fell 15.1 per cent to £382.8 million, primarily driven by a 22 per cent drop in its print and other directory revenues to £268.9 million. The firm did see an encouraging rise of 111.8 per cent in revenues from digital services to £35.4 million, with overall digital revenue rising from 25.5 per cent to 29.5 per cent as Yell bids to reinvent itself online.
Yell reported that net debt currently stands at £2.57 billion, though it claimed to be in ‘full compliance’ with borrowing agreements at the moment. However, the firm warned there was a ‘risk that in the future the group will need to reset again its financial covenants with, or obtain a waiver from, its lenders’. The debt warning and plunging revenues scared investors this morning, with Yell currently trading down 13.05 per cent at 5.13p.
Source: What Investment