Yell hauls in £7.2m with the internet

THE transition of people to using the internet to search for a yoga class or a chiropractor rather than Yellow Pages is beginning to pay dividends for directories group Yell Group.

The FTSE 100 company's online offering yell.com today said turnover in the nine months to 31 December soared 41% to £25m and its underlying profit nearly doubled to £7.2m.

While that is still a drop in the ocean compared with Yell's nine-month underlying earnings of £286m, up 10%, it offsets a slowdown in profits from its traditional Yellow Pages business in the UK, which continues to be hit by price caps enforced by regulator Ofcom to promote competition.

Half of Yell's business is in the UK - the rest is in the US - but here its charges to advertisers are governed by a price cap of inflation minus 6%, working out at an enforced drop of 3.4% on its rate card in recent months.

The cap is aimed at encouraging BT Group - which sold Yell four years ago - to re-enter the market and to boost other directories group like Thomson.

Much of Yell's future is pinned to the regulator's upcoming review of that cap. Any relaxation could boost the company's earnings and its share price. Yell shares fell ½p to 464¾p in early trading, valuing the group at £3.2bn.