YELL....................
Article by Nigel Botterill
I was interested to read in the press over the weekend of the troubles at Yell.
Apparently their new Chief Executive, Mike Pocock is considering selling large parts of the company in an effort to get their enormous £2.9 billion 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 £600 million last year in a rights issue and since then their share price has declined by 70%. It is expected to slip out of the FTSE 250 this week.
Now, I’m not in any way saying that, “I told you so….” but when we launched thebestof back in 2005 it was pretty clear to anyone with half a brain 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 over the coming weeks and months….
