Julien Billot, former president and CEO of Yellow Pages in Montreal on Nov. 18, 2014. The hunt for a new chief executive officer is “well under way” at the company.Christinne Muschi/The Globe and Mail
The hunt for a new chief executive officer is "well under way" at Yellow Pages Ltd., which has seen digital growth slow and customers slip away from its advertising business in recent months.
"We hope to announce a successor soon," interim president and CEO Ken Taylor said on a conference call on Thursday to discuss the company's quarterly earnings.
Last month, the company announced a decision by its board to replace CEO Julien Billot, as Yellow Pages warned that it would miss its targets for digital-revenue growth this year.
Yellow Pages has been working on a long-term transition to provide more digital marketing services to the small and medium-sized businesses that used to advertise much more heavily in the bulky print directories that were its bread and butter years ago.
Digital revenue, which now accounts for 72 per cent of the company's total revenue, was down 2.9 per cent in the second quarter compared with a year ago. Print revenue declined 22 per cent over all, which the company expected. This quarter also saw a decline of 7,500 customers, or 3 per cent of its customer base, compared with the same quarter last year.
Yellow Pages is attempting to stem the loss of current advertisers, and to attract new ones, by improving its product offerings. These include a deal announced last month with MyTime, a commerce platform designed to help small and medium-sized businesses with online customer service such as booking, messaging and payments. The company is also moving toward what it calls "evergreen contracts," allowing its clients to sign up on a monthly subscription basis rather than annual contracts to provide more flexibility.
The company reported net earnings of $820,000 or 3 cents a share in the quarter ended June 30. This was a significant decline from last year's earnings of $10.95-million or 41 cents, as cost savings failed to keep pace with revenue declines.
Revenue for the quarter totalled $191.2-million. This was down 9.2 per cent from $210.5-million last year.
More than three-quarters of Yellow Pages' revenue comes from its YP segment, which offers ads in the company's own print and online directories and sites, including the Yellow Pages website. Visits to those properties were up about 10 per cent in the quarter. It also syndicates advertisers' listings to other platforms it does not own: Accounting for syndication, digital visits were up 50 per cent, the company said. The YP business also offers services such as search engine advertising, social media campaigns, website design and other marketing solutions.
That main segment of the business saw revenue decline to $149.5-million this quarter, compared with $167.1-million last year.
Other segments of the business include media buying agencies and a creative advertising agency, as well as real estate listings through its ComFree/DuProprio and Yellow Pages Homes businesses.
"The decline in the YP segment customer base underscores the need to update our customer offerings," Mr. Taylor said.
As a result of the CEO's departure, the company has paused the process of refinancing some of its debt in the form of senior notes that mature in the fall. The process will be completed after a new CEO is named, Mr. Taylor said.
The search for a new leader reflects a "greater emphasis on operational performance, execution and shareholder returns," spokesperson Joëlle Langevin said.
Susan Krashinsky Robertson