Upbeat First Quarter Boosts Shares in Directories Firm Yell

U.K.-based directories company Yell said on Tuesday its efforts to combat intense competition in the United States were likely to pay off in the second half, helping lift its shares more than 2%.

The company painted a similar picture when it updated shareholders' at last week's annual meeting, but analysts said they were heartened by the positive tone in the update.

Revenue, adjusted underlying earnings and earnings per share were also better than analysts had anticipated.

Shares in Yell were up 2.1% in early trading, making them one of the best performing media stocks in Europe at a time when leading London indices were flat or lower.

Yell Chief Executive John Condron said that while first-quarter trading was still demanding, particularly in the United States, the company was confident its actions to address competition in that market were beginning to take effect. The U.S. accounts for around half of Yell's group revenues.

At last week's AGM, Condron told shareholders Yell had seen "good results" from new marketing, production and advertising.

"We view the first-quarter results as encouraging, but clearly the group still has much to do in the U.S. and Spain," said Numis Securities media analysts in a research note.

Yell said it was on track to meet full-year expectations as it posted a 21% rise in first- quarter underlying earnings amid the tough U.S. trading. Yell reiterated it expects full-year organic growth in its U.S. arm of 3%.

Yell's underlying adjusted earnings before interest, tax, depreciation and amortisation in the three months to end-June rose to 143.9 million pounds ($296.1 million) from 118.8 million
pounds a year ago. Revenue rose 18.6 percent to 441.1 million.

Pretax profit rose 53% to 49.6 million pounds from 32.4 million a year ago.

Yell said its adjusted diluted earnings per share fell 11.8% to 6% per share from 6.8 pence last year.

Yell Chief Financial Officer John Davis said underlying EPS would had risen 12.5% had it not been for the first-time consolidation of Yell Publicidad's first-quarter revenue, the weaker dollar and the rescheduling of directories in the U.S. from the first quarter to later quarters.