Blog Post

Earnings: Carphone Warehouse Sets July 2010 De-Merger Date

imageCarphone Warehouse must be hoping that its £237 million acquisition of Tiscali‘s UK assets and the company’s on-going de-merger into separate retail and broadband divisions can improve its fortunes: in its year-end results for the 12 months to March 31 the company announced revenues of £1.38 billion–down from £1.42 billion in the previous 12 months — and profits £25 million lower at £112 million. Profits would have been £133 million if exceptional items were included such as Carphone’s 50 percent stake in Best Buy Europe.

So to allay any fears about reduced consumer demand for gadgets and high-end broadband deals, CEO and founder Charles Dunstone has set a date of July 2010 “at the latest” for the de-merger to take place and for two separate, publicly-listed companies to be created.

Release (pdf)

TalkTalk: Soon to become the UK’s biggest retail broadband provider with the addition of Tiscali’s customers (BT (NYSE: BT) is still bigger overall thanks to its business customers), TalkTalk grew its broadband userbase by 93,000 during the year to 2.8 million, while non-broadband customers, such as those with phone-only deals, shrank to 1.1 million. That helped headline EBITDA grow by 80 percent to £124 million, despite a slip in residential revenues of two percent to £1.08 billion. CEO Charles Dunstone expects the Tiscali acquisition to boost overall EPS by 10 percent by March 2010 and annual savings of between £40 million and £50 million by March 2011.

Best Buy: Carphone’s 50 percent stake in Best Buy Europe saw its revenue increase from £3.08 billion in 2007-8 to £3.56 billion in 2008/9 — but EBITDA dropped from £151 million to £101 million. But, connections are up eight percent year on year to 12.5 million and the both partners will be launching their first Big Box retail store in the UK in Spring 2010 ahead of a European expansion. Dunstone says he expects the Best Buy deal to raise between £30 million and £40 million by March 2010.