Directories group Yell today said it had started its financial year in positive fashion after turning in a profit for the first quarter.

The former BT subsidiary, which listed on the London market last year, achieved pre-tax profits of £35.6 million against losses of £80.5 million a year ago when the business was hit by restructuring and flotation charges.

The improvement was helped by the number of advertisers at its Yellow Pages and Business Pages directories increasing 1.5% to 138,000 - as Yell attempts to beat last year's total of 480,000.

This put it on track to meet its full-year target of wooing 100,000 new customers for the fifth successive year.

Yell is the biggest supplier of classified directory advertising in the UK and has substantial operations in the US, employing about 8,500 people across the two countries.

Turnover from its printed directories in the UK increased 3% to £138.9 million, despite the impact of a price cap imposed by the Office of Fair Trading following a review in 2001. Advertising rates to Yellow Pages fell 3.9% in the quarter.

Chief executive John Condron said: "Yell's growth momentum continues and places us on track to meet full-year expectations."

In addition to the Yellow Pages and Business Pages, the group manages online directory Yell.com and the 118247 telephone service formerly known as Talking Pages.

The number of advertisers using Yell.com grew rapidly in the quarter, up 36% to 110,000 at the end of June.

Wednesday July 28, 2004