Tellier: Volt Deal About Technology not Footprint
On Thursday’s second-quarter and first-half earnings call, Yellow Pages Group CEO Marc Tellier made it abundantly clear that his company’s acquisition of Volt Information Sciences was driven by the need to secure strategic technologies and not to gain a toehold in the U.S. Yellow Pages market.
The fact that the U.S. independent publisher DataNational came with the Volt deal was secondary, Tellier told analysts on the earnings call. YPG is the largest directory publisher in Canada, and it also is a leader in verticals through its Trader division. YPG has expanded its directory footprint aggressively throughout Canada through a series of acquisitions.
Tellier will be among the featured speakers at The Kelsey Group’s Directional Media Strategies conference, Sept. 15-17, in Atlanta.
While he praised DataNational and its managers, noting the company is still growing, Tellier said, “We have no ambitions to grow it further.” This is consistent with statements he made in February that his company had no Yellow Pages ambitions south of the U.S.-Canadian border.
Another interesting revelation from yesterday’s call was YPG’s plan to increase the amount of cash it distributes to unit holders of the Yellow Pages Income Fund. This decision stands in contrast to recent cutbacks in dividends at leading publicly traded directory publishing companies. YPG clearly wanted to send a signal that all is well and there is no need to stockpile cash. “This underpins our confidence in our outlook for 2009,” Tellier said. The company will increase the amount of cash distributed per unit by 3.5 percent, from C$1.13 to C$1.17.
YPG is sticking with its guidance for 2009 despite some signs of softness in the Canadian economy. The company expects total directory revenues to grow between 4 percent and 5 percent, with EBITDA growing between 4 percent and 7 percent. In the first half, YPG posted a 59.9 percent EBITDA margin for its directories business.
The Kelsey Report will have a more detailed rundown of the YPG first-half results in an upcoming Client Inquiry Brief.