News
14/02/2007 - Acquisitions underpin profit surge at Canadian Yellow Pages
Yellow Pages Income Trust, Canada's biggest directory publisher with a 90 per cent market share, Tuesday reported a 174 per cent surge in fourth-quarter profit to $113 million after digesting several big acquisitions.
Chief executive officer Marc Tellier and chief financial officer Christian Paupe said the fund, including its fast-growing online businesses, will provide solid growth over the next four years until it becomes taxable under new federal trust legislation.
"Our business plan remains unchanged and we'll go on building strong cash flows to be ready to meet the tax implications," they said. "We've achieved industry-leading levels of internal growth and margins for the fourth year running and the decision to increase distributions from $1.03 to $1.09 per unit confirms the momentum in operating and financial results will hold in 2007."
The core directories business will benefit from changes in management and better technology and productivity in Western Canada, while expanding its online products, they said.
It will be a transitional year for vertical media while debt will continue to decline. They played down competition from Internet search engines and new industry players and reports of a foray into the United States. (Vertical media is an industry term covering the seamless combination of print publications and websites.)
"We're maximizing performance right across the organization and we look to the future with confidence," said Tellier.
Fourth-quarter net earnings rose to $113 million, or 21 cents per unit, from $41.2 million, or nine cents a unit a year earlier. Operating income was $152.6 million against $66.7 million. Revenue was up 34.5 per cent to $380 million. Distributable cash grew by 30.6 per cent to $157.9 million.
For all of acquisition-fuelled 2006, net earnings were $431.9 million, up 78.6 per cent from $241.8 million in 2005. Revenue rose 45.9 per cent to $1.38 billion. Internal growth in the directories business, print and online, helped significantly. Distributable cash rose 11.3 per cent to $604 million.
Yellow Pages has made acquisitions worth more than $4 billion since going public in 2003 as it built its national presence. The price of its units dropped 14 per cent the day last autumn when Finance Minister Jim Flaherty announced his bombshell decision to tax income trusts.
http://www.canada.com/nationalpost/financialpost/story.html?id=0e65584c-985d-4680-84f3-c9f7624efac1&k=34729
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