With the New Zealand Yellow Pages Group in apparent financial trouble (who would have thought that would happen after the purchasers borrowed most of the money to buy it !) I must revisit a statement I made about the sale by Telecom New Zealand [TEL.NZ] back in 2007.
I criticised the company for selling a profitable part of their business at a time when the company's other units were mature with falling revenue and future falling profits.
It looks like I was wrong, (and this is where the sort of comes in) Telecom owning Yellow Pages was profitable because of the long established nature of the unit within the company and low base cost but when sold the new owners had far too much debt to make the whole thing work.
People are using the internet more for searching numbers (I use Yellow and White pages online and it is free) and the books seem redundant.
The price Telecom got was superb compared to its worth now, probably less than half its sale price to the current owners and worth less than its debt mountain.
Telecom made a smart move and I praise them for that (now), credit where it is due and all that and that credit goes to Theresa Gattung. The best and only good thing she did for the company she used to head - sorry I couldn't help myself there.
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