YPG 2012 Outlook: Digital Hopes and Debt Woes

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Online revenues for Canada’s Yellow Pages Group grew 30 percent in 2011, offsetting declines in its domestic print business as well as its U.S. operations, according to the company’s recently released earnings. Revenues decreased to C$1.3 million in 2011 compared with C$1.4 million in 2010 due to lower print revenues in traditional markets. The digital component of YPG is a considerable bright spot for the company, with online revenues now representing 29 percent of total revenues.

But the Montreal-based directory publisher is making some difficult choices to get out in front of its $1.5 billion debt load. In a bid to save millions and redirect funds to debt repayment, YPG cut off dividends to its preferred shareholders just months after canceling dividend on common shares. YPG reduced its total debt by $800 million in 2011, mostly through its sale of Trader Corp., which publishes AutoTrader magazine. Earlier this month, YPG announced that it would scale back its Canpages print division due to underperformance.

In 2012, the company plans to continue to focus on the execution of its 360 solution strategy, enhancing online and mobile product offerings, targeting larger advertisers and improving its cost structure.

YPG recently added three new board members as it reviews strategies to refinance its debt, including Bruce Robertson, a restructuring expert who formerly worked for Brookfield Asset Management Inc., and David Leith, former head of investment banking at CIBC World Markets.

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