Always great to receive yet another raise....
My portfolio income from investments made another leap forward today as Yellow Pages Income Fund (YLO.UN) reported a 3.7% increase in distributions from $1.09 per unit to $1.13 per unit. This is very good news for my portfolio income, considering YLO.UN makes up 16% of the total assets held.
Here are some highlights of their earnings release:
- Adjusted earnings for the company grew by 15%. The company is now earning $180 M annualized from their online activity.
- Distributable cash per unit actually increased by 9.7%, however the company only raised distributions by 3.7%. The reason for this is because Yellow Pages in managing this company for the long term. They are actually building up a buffer, and progressively reducing their pay out ratio, which will enable them to not have to cut distributions after 2011 when the new tax for income trusts sets in. At that time Yellow Pages will transition from an income trust to a regular corporation.
- Organic growth in their directories business remains strong at 6% earnings growth.
One aspect of this company that I really like is their management. One can tell from their earnings releases and conference calls that they are exceptional communicators. They also integrate acquisitions very well.
Their margins are phenomenal at almost 60% for directories. They hinted that 2008 looks very good as they build momentum from their recent acquisitions such as the purchase of Trader Media (Auto Trader etc.). Yellow Pages (YLO.UN) is now yielding about 7.8%, and trading at $14.50 / unit.