YELLOW Pages owner Yell has highlighted the importance of its turnaround strategy after revealing a further 15% slump in revenues.

Sales of print and other directory advertising slumped 22% to £269.8m in the quarter to December 31, with revenues from digital directories down 16% to £77.6m.

However, Yell was encouraged by the doubling in revenues from digital services to £35.4m as it bids to reinvent itself through schemes such as helping businesses operate virtual stores. The trial project features a directory of products that can be viewed on smartphones.

This did not offset the decline in its print and online directories businesses, which accelerated in the period as a result of the worsening economy and tougher competition online. Total revenues fell 15.1% to £382.8m.

The group is also trialling community newsletters to help fill the gap in its print business and take advantage of the decline in local newspapers. The trial is currently in the United States but the scheme could be brought to the UK.

The group said online now accounts for 29.5% of its revenues, up from 25.5% a year ago, while digital customers grew 10% to 945,000. Chief executive Mike Pocock said: “Our digital services revenue continued to grow strongly.

“We expect this growth to accelerate as our strategic new products come to market.”

Its new strategy to grow online includes developing an ’emarketplace’ designed to allow consumers to find Yell’s customers more easily.

The plans also involve selling services to local businesses registered on its site including web design, loyalty schemes, marketing initiatives and computer software to help them do their accounting.

Yell recently agreed a new deal with lenders on its £2.6bn debt mountain, giving it time to implement its turnaround plans.

Underlying profits fell £12.7m to £108.6m despite efforts to keep a lid on costs.

Shares slumped 13% yesterday, undoing most of its gains in recent weeks, even though the group said it was on course to hit the City’s profit expectations for the year to the end of March of between £435m and £480m.

Lorna Tilbian, an analyst at Numis, said the revenues decline was greater than the market had expected.

She said: “We remain concerned that an accelerated decline in the group’s predominantly print revenues could undermine investment in digital.”