Shares in Yellow Pages owner Yell slumped this morning after it reported plunging revenues and warned of future debt issues.

In the quarter ending 31 December 2011, Yell’s revenues fell 15.1 per cent to £382.8 million, primarily driven by a 22 per cent drop in its print and other directory revenues to £268.9 million.

The firm did see an encouraging rise of 111.8 per cent in revenues from digital services to £35.4 million, with overall digital revenue rising from 25.5 per cent to 29.5 per cent as Yell bids to reinvent itself online.

Chief executive officer of Yell, Mike Pocock, commented, ‘Our digital services revenue continued to grow strongly, reaching an annual run rate of over £140 million. We expect this growth to accelerate as our strategic new products come to market.

‘The deteriorating macro environment and a more competitive digital directory market are, however, driving a faster rate of directory revenue decline.’

Yell reported that net debt currently stands at £2.57 billion, though it claimed to be in ‘full compliance’ with borrowing agreements at the moment.

However, the firm warned there was a ‘risk that in the future the group will need to reset again its financial covenants with, or obtain a waiver from, its lenders’.

The debt warning and plunging revenues scared investors this morning, with Yell currently trading down 13.05 per cent at 5.13p.