Yell Group - owner of the Yellow Pages directories - said growth in UK revenues had quickened even though it was finding it harder to hold on to advertisers.
Reading-based Yell Group saw turnover in the UK rise by 4.3 per cent to £466.6 million in the nine months to December 31, higher than the 3.3 per cent growth seen in the first half of its financial year.
The improvement was better than expected by analysts and came despite the price cap imposed by regulators, which cut prices at Yellow Pages by an average of 3.4 per cent.
Although the total number of advertisers at its Yellow Pages and Business Pages directories rose slightly to 354,000, Yell yesterday admitted that it was not retaining as many clients as a year ago.
The overall retention rate of advertisers fell to 75 per cent during the nine months, compared with 78 per cent in the same period a year earlier.
According to Yell, this reflected the "substantial growth" over the past four years as new customers were harder to retain than those advertisers with a track record of benefiting from listings in its directories.
Yell is the biggest supplier of classified directory advertising in the UK and has substantial operations in the US, employing about 8,500 people.
Group turnover rose 6.7 per cent to £897.9 million over the past nine months or 12.5 per cent after stripping out the impact of the weak US dollar in the period. Operating profits totalled £182 million in the period, against £79.5 million a year ago.
Chief executive John Condron said: "We are confident of meeting expectations for the full year, as well as seeing a positive outlook beyond this."
In addition to the Yellow Pages and Business Pages directories, the group owns online directory Yell.com and the 118247 telephone service.
In the US, turnover grew by 21.8 per cent at constant exchange rates to £431.3 million on the back of an expanding customer base, new directories and acquisitions such as the Feist yellow pages which was brought into the group in March.
But the group warned that its Yellow Book USA business was facing class-action lawsuits in four US states from customers who claim that consumerprotection legislation had been violated.
Yell is talking with its legal advisers about the merits of the claim, which it believed was linked to a legal wrangle with rival Verizon over an advert that appeared in its directory more than two years ago.
Meanwhile, the Office of Fair Trading is due to publish its review of how the directories markets is regulated this spring. Yell's shares closed at 4671/2p up 21/4p.