HIBU.L Regulatory News (HIBU)

For Immediate Release 25 July 2013

hibu plc

("hibu" or the "Group")

Interim management statement for the three months ended30 June 2013

Financial headlines(1)

·; Group revenue of £297m decreased by 11%

- Digital services revenues grew by 22% to £49m

- Digital directories revenue fell by 5% to £65m

- Print and other directory revenues fell by 19% to £183m

·; EBITDA(2) of £56m was down £15m

·; Free cash flow of £23m decreased £17m

·; Profit after tax increased by £3m to £2m

·; Constructive discussions on capital structure continue

Operational headlines

·; Total digital revenue increased from 32% to 38% of revenue

·; Digital services

- Customers increased by 8% to 449,000

- Annual digital services revenue per customer increased by 8% to £435

- Live customer websites increased by 5% to 430,000

·; Digital directories

- Advertisers fell by 12% to 723,000

- Annual digital directory revenue per advertiser declined by 1.9% to £345

- Visitors declined 16% to 41m in June

·; Yellow Pages

- Yellow Pages advertisers reduced by 21% to 200,000

- Yellow Pages revenue per advertiser decreased by 1.4% to £781

(1) Results are for the three months ended 30 June 2013, unaudited and compared with the same period in the prior year. The changes

in revenue, revenue per advertiser and EBITDA are stated at constant currency. Revenue percentage changes, including revenue per customer, are also adjusted for rescheduling and acquisitions.

(2) EBITDA is profit before interest, tax, depreciation, amortisation and exceptional items.

Forward looking statements

This news release contains forward-looking statements regarding hibu's intentions, beliefs or current expectations concerning, among other things, hibu's results of operations, revenue, financial condition, liquidity, prospects, growth, strategies, new products, the level of new directory launches and the markets in which hibu operates. Readers are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those in the forward-looking statement as a result of various factors. These factors include any adverse change in regulations, exchange rates, unforeseen operational or technical problems, the nature of the competition that hibu will encounter, wider economic conditions including economic downturns, the final outcome of addressing hibu's capital structure and changes in financial and equity markets. Readers are advised to read the Risk Statement below. hibu undertakes no obligation to update or revise publicly any forward-looking statements, except as may be required by law.

Risk statement

hibu's risks and uncertainties include strategic and operational risks faced by hibu's businesses; debt and financing risks faced in funding Group operations and the financial reporting and related risks faced in reporting hibu's results. Readers are advised to read pages 22 to 29, page 116 and notes 1 and 16 to the financial statements included in Yell Group plc's 2012 annual report (Yell Group plc changed its name to hibu plc on 27 July 2012) for the financial year ended 31 March 2012, a copy of which is available on hibu's website at http://www.hibu.com. 

The majority of hibu's debt matures in April 2014. The Group has been in negotiations with a co-ordinating committee of the lenders (the "CoCom") under its facilities agreement dated 30 November 2009 (as amended) (the "2009 lenders") to represent the interests of the 2009 lenders during the process of determining an appropriate new capital structure. The Group obtained certain waivers, with CoCom support, from the 2009 lenders to enable, among other things, substantive discussions to take place around a balance sheet restructuring.

The Group is currently in default under the 2009 facilities agreement. The lenders' facility agent may, and must if directed by two-thirds of lenders, demand immediate repayment of all amounts due. The default can only be waived by the unanimous approval of all 2009 lenders. As this is not considered likely in the current circumstances, a waiver request for this default is not being made. As announced today, the principal terms for the restructuring of the Group's debt have been agreed in principle with the CoCom subject to clearance from the UK Pensions Regulator. The members of the CoCom together represent approximately 32.8 per cent of the Group's financial debt. The restructuring will be implemented through schemes of arrangement that will require the approval of lenders that hold at least 75 per cent of the debt. Closing of the transaction is expected to take place in the fourth quarter of the current calendar year.

The financial restructuring will not result in any payment being made to shareholders or leave hibu shares with any value. The Group has therefore decided to suspend the listing of hibu's shares and the trading of those shares on the London Stock Exchange with effect from 07:30 BST today. The listing of hibu's shares will be cancelled upon completion of the restructuring. The restructuring will also result in a Group reorganisation that will require hibu plc and some other Group holding companies to be placed into administration.

Also as noted in another RNS announcement made by the Group today, the Board of Directors has given consideration to both the implications of the share suspension and the significant effect of any financial restructuring on the future shape of the Group, including the fact that hibu plc, which is the Group's ultimate holding company, is expected to be placed into administration as part of the financial restructuring. As a consequence, hibu has given notice to the Registrar of Companies that it is changing its accounting reference date to 30 September. As a consequence, the accounting period that commenced on 1 April 2012 will now cover the 18 months ending on 30 September 2013.

The Group is cash generative and the directors believe that the lenders will receive a higher recovery on their loans through a restructuring that allows the business to continue to operate as a going concern rather than by any other course of action. Therefore, the financial information has been prepared on a going concern basis and does not necessarily include all adjustments that would be required if the business were unable to continue as a going concern. At 30 June 2013, the Group held cash balances of £222m.

The Group net liabilities of £1,477m include goodwill and other acquired intangible assets totalling £469m which is supported by the Group's strategic plans. It is clear that the Group faces challenges and material uncertainties that may affect the carrying value of these intangible assets.

About hibu

hibu helps communities thrive by facilitating millions of connections each year between consumers who want to find products and services locally and the merchants who provide them.

hibu enables consumers to find local businesses and shop in new, innovative ways whether online, on the move or in store. hibu helps merchants compete in the digital world with a broad range of marketing and commerce solutions delivered online and through hibu's direct sales teams. Building on its heritage as a premier directories provider, hibu continues to offer a full range of print- and distribution-based marketing services.

hibu operates in the UK, US, Spain, Argentina, Chile, Peru and US Hispanic markets. In the twelve months to 31 March 2013, hibu had one million SME customers and total revenues of £1.3 billion.

For further information about hibu, visit corporate.hibu.com.

Enquiries

hibu - Investors RLM Finsbury

Andrew Clatworthy Andrew Dowler or Charles Chichester

Tel: +44 (0) 118 358 2838 Tel: +44 (0) 207 251 3801

hibu - Media

Jon Salmon

Tel: +44 (0) 118 358 2656