I was interested to read in the press recently of the troubles at Yell. Aparently their new Chief Executive, Mike Pocock is considering selling large parts of the company in an effort to get their enormous "2.9billion debt under control. However, what I found even more interesting is that Yell's debt is now trading at a new low of just over 40% of face value, which indicates that debt holders fear it will not survive. Further investigation reveals that Moody's, the Credit Ratings Agency has cut its opinion on the debt. The situation gets even murkier when you take into account that Yell raised over £600million last year in a rights issue and since then their share price has declined by 70%.
Bank in the midble of the last decade it was pretty clear that the established directory model in the UK was in its death throes. The reality is that Yell were too slow to move and, whilst its online website provides a perfectly adequate service, its reputation amongst its customers and its reliance on the 1950s model of a large mobile sales force selling print ads means that it was always going to struggle to adapt to the 21st Century - a market which is so manifestly different to the one it was built to serve. I suspect we will hear a lot more about Yell in the coming months ...
