Yellow Pages Limited: Navigating Digital Transformation with Governance Renewal – A Cautiously Optimistic Investment

The 2025 Annual General Meeting (AGM) of Yellow Pages Limited (TSX: Y) marked a pivotal juncture for the Canadian digital media firm. Shareholder sentiment, as reflected in voting outcomes and governance shifts, signals cautious confidence in management’s ability to pivot from its legacy directory business to a modern digital advertising platform. However, the path forward remains fraught with execution risks. This analysis evaluates whether Yellow Pages’ strategic realignment and leadership transition justify near-term investment.

Governance Shifts: A Vote of Confidence or a Risky Gamble?

The 2025 AGM saw over 99% approval for auditor reappointments and 97–99.8% support for director candidates, underscoring shareholder trust in governance continuity (see Table 1). Notably, CEO David A. Eckert retained 97.11% approval despite declining revenues, while new directors Sherilyn King (CEO designate) and Martin Harrison secured near-unanimous support. The elevation of Rob Hall to Board Chair and Susan Kudzman’s transition to Audit Committee Chair further institutionalized leadership stability.

Director	Votes For (%)	Votes Withheld (%)
David A. Eckert	97.11%	2.89%
Sherilyn King	97.12%	2.88%
Craig Forman	99.84%	0.16%

Table 1: 2025 Director Election Results (Source: Yellow Pages AGM Voting Results)

The minimal dissent (<3% withheld votes) suggests shareholders view governance changes as stabilizing rather than disruptive. However, Treena Cooper’s 2024 approval dip (70.37%) hints at lingering skepticism about certain board members’ alignment with digital priorities.

Digital Transformation: A Necessary Gamble or a Viable Path?

Yellow Pages’ core strategy—shifting from print directories to digital platforms like YP.ca and 411.ca—aligns with sector trends. Digital advertising spending in Canada is projected to grow at a 7.2% CAGR through 2027, outpacing traditional media. The company’s Q1 2025 results reflect progress:
- Digital revenue fell only 6.8% YoY (vs. 10.5% decline in print), with average spend per customer rising 5.2% due to price hikes and premium service adoption.
- The “Our Cover, Your Canvas” art competition, launched in early 2025, demonstrated innovative engagement via digital channels.

Yet risks persist. Overall revenue dropped 7.6% YoY to $50.8 million in Q1, though the “bending of the revenue curve” (a 0.5% improvement in decline rate vs. Q4 .2024) offers hope. Management’s focus on tele-sales expansion and customer retention—highlighted as growth levers—will be critical to reversing the trajectory.

Valuation and Investment Thesis: Buy the Dip or Wait for Proof?

Yellow Pages’ trailing P/E ratio of 12.5x (vs. sector average of 18x) reflects skepticism about its turnaround. However, its strong cash balance ($49 million) and consistent dividend ($0.25/share, yielding 4.5%) provide a safety net. Key considerations for investors:
1. Short-Term Catalysts:
- The tele-sales investment could boost new customer acquisition by late 2025.
- A potential rebound in print revenue (10.1% of total) if price increases offset attrition.

1. Long-Term Risks:
2. Competitor encroachment from giants like Google (dominant in local search) and Meta (advertising).
3. Margins remain pressured: EBITDA fell 23.4% in Q1, driven by cost inflation and reinvestment.

Conclusion: A Cautious Buy with Strict Stops

Yellow Pages’ governance renewal and digital pivot warrant a speculative investment, but only for risk-tolerant investors. The $0.25 dividend and cash reserves provide downside protection, while the stock’s current valuation leaves room for upside if revenue declines stabilize.

Actionable Recommendation:
- Buy 10% of a position at $6.50/share (current price as of May 2025).
- Scale into dips below $6.00 if Q2 results show margin stabilization.
- Exit if Q3 revenue declines exceed 7% YoY or tele-sales initiatives underperform.

Yellow Pages Limited is not a core holding for conservative investors. But for those willing to bet on a digital turnaround with clear governance support, this could be a compelling contrarian play.