Yell Group’s March-to-June quarter is a classic snapshot of an old print classifieds company – making digital gains, but not enough to offset the declining legacy business, especially coming out of the recession.
Online ad sales rose 9.7 percent from last year’s period to £111.6 million; that’s now a healthy quarter of group income.
But that group income is down 7.5 percent to £439.6 million, with EBITDA sliding 8.9 percent to £134.9 million.
In the UK, Yell lost nearly a fifth of its printed advertisers and income. And UK internet income is up only 2.8 percent from last year – more than a fifth of unique monthly users and 9.3 percent of advertisers deserted the site. It just happens that Yell is squeezing higher spending from remaining advertisers.
All this is after some cost cuts – and more are planned – now Yell Group says it will shave £60 million from costs in the 2011 financial year.
From the announcement: “The anticipated economic recovery is proving slower than expected … The improving print retention rates across the group and the continued internet momentum mean we are confident that we are well placed to benefit when confidence in a sustainable economic recovery does return. Until that time, our revenue will remain under economic pressure as SMEs remain cautious about their future.”
For the next quarter, Yell expects sales will be down 11 percent and down nine percent after that.