Yellow Delivers Profit And Continues to Grow Digital Revenue

Yellow® Delivers Profit And Continues to Grow Digital Revenues

• Trading profit before impairments of $56m
• Digital revenue $46m
• Total revenue in line with forecast of $180m
Yellow has today released its financial results for the period ending 30 June 2013, as it continues its transformation to digital by delivering incremental growth in digital revenues and a solid profit.

The company cited digital revenues of $46m from all online sources and total revenues of $180m, in line with forecasts.

“In my first year as CEO it’s never been a more challenging time to transform a business from print to digital. We have made excellent progress in our digital transformation this year and I’m pleased to report Yellow delivered to forecast and met the expectations of the Board. The incremental growth in digital is very pleasing and we’re excited about the future of Yellow” said CEO Chris Armistead.

Most of the net operating cash surplus has been allocated to debt repayment, bringing total repayment of senior notes to $86m since the debt was restructured in January 2011. The company made a solid profit despite the significant investment it made in IT infrastructure, a significant impairment charge the company chose to take as well as implementing its biggest structural change since de-coupling from Telecom in 2007.

“We have a strong business and robust financial management that allowed us to deliver a profit, make debt repayments and crucially continue to reinvest in our digital evolution,” said Armistead.

The year was vital for Yellow as it saw the completion of a world-leading technology platform. Armistead described it as “one of a kind” in the directories business and said it will enable Yellow® to deliver new digital products and services to both advertisers and consumers.

“We’re already seeing the benefits of this; it’s allowed us to bring control of yellow.co.nz in house and make significant improvements and add new features like ratings and reviews. We’ve launched new mobile apps for Yellow and White pages, and total downloads are now more than 200,000.”

“For consumers, our focus is to help people find what they’re looking for, wherever they’re looking whether it be in our printed books or websites, via our Yellow or White pages mobile apps, or by calling 018. For business owners, it means helping them be found through the marketing solutions we offer including digital products such as yellow.co.nz advertising, business websites, search marketing (Yellow is Google's biggest partner in NZ), and video.”

“You can expect to see Yellow offer more digital marketing services and continue to help Kiwi businesses by offering extra value. This year, for example, 2,500 business owners attended ‘The Biz’, a free seminar series we ran in 12 cities and towns around the country,” he said.

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NOTES TO EDITORS - performance notes

• Completion of new IT system: FY13 saw the completion of a world-leading proprietary technology platform. It's the only one of its kind in any directories business around the world and means Yellow can deliver new digital products and services with real speed and agility
• Opt in – Auckland Residential White pages®: In March 2013, working with the Ministry of Business, Innovation and Employment (MBIE), Yellow® piloted an ‘opt in’ delivery system for the Residential White pages® in Auckland. This was significant as delivery of the residential White pages® to homes is regulated under the Telecommunications Service Obligation (TSO), an historic agreement between Telecom and the Crown that is overseen by the MBIE. When Telecom sold Yellow that became a contractual obligation it owed to Telecom.
• The Biz Events: Yellow® ran its inaugural ‘The Biz’ event series in 12 cities and towns throughout New Zealand for small business owners. More than 2,500 SMEs attended 23 free events that are designed to help small business owners learn to run their business better. Speakers came from key event partners Google, Telecom / Gen-I, Xero and BNZ, plus a range of successful New Zealand entrepreneurs (Yellow is Google’s biggest partner in NZ).
• Company restructure: In June, Yellow® announced the biggest change to its structure since de-coupling from Telecom 2007. The business was split into four units: print, digital, product development and strategy and innovation. It resulted in 35 job losses, largely from the Auckland sales team. The business units are served by a corporate services team of HR, IT and finance. The changes came into effect on 1 August.

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