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Directories group Yell is in talks with lenders to restructure its hefty £4.2bn debt pile as revenues continue to slide. The group, which publishes The Yellow Pages and its equivalents in other countries, has commenced talks with lenders on extending the maturity and changing the terms of its facilities.
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Yell reported that first quarter revenues had contracted 11 per cent, with earnings falling 20 per cent on a constant currency basis. The second quarter, traditionally weaker, but with revenues usually rising by between 3 and 4 per cent, saw marked contractions: revenues were down 17 per cent and earnings slumping 30 per cent. These declines mean that Yell is even closer to the limits of its banking agreements, according to analysts at Panmure.
Yell's directory service remains under severe pressure thanks to the advertising slump, and migration to online services. Earnings are falling dramatically, and whilst the initiation of talks is a positive step, Yell's future looks anything but bright. Sell.
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