Earnings: Carphone Hit By Tiscali Churn, De-Merger On Course

Carphone Warehouse beat its expectations on broadband customer sign-ups, as it prepares to de-merge the division into a separately listed company alongside its Best Buy Europe JV stake.

It added 77,000 new customers to its TalkTalk broadband business in Q209. But that figure falls to just 15,000 net customer additions because of 62,000 subscribers leaving Tiscali UK, which Carphone bought in May this year.

Carphone says the Tiscali departures were expected and it now has a better customer retention scheme; TalkTalk expects to have between 4.1 million and 4.2 million subscribers in total by the end of the year.

The group says it’s confident the de-merger will go ahead as planned and its interim year-end result are out on 27 November. Release (pdf)

Tiscali discount: There are no revenue or profit figures in the trading update, which covers April to June, but Carphone says it’s due something of a rebate on the Tiscali acquisition: the fee decided for the company was based on how many subscribers it had during those long-running negotiations — but the number of customers fell by 160,000 by the time the deal was closed, so the overall “true payment” is lowered.

Best Buy: Carphone’s 50 percent stake in the Best Buy Europe gadget retail chain “performed well, despite an overall subdued handset market”. In Q209 total mobile subscriptions grew two percent year on year to 3.17 million, due in part to the iPhone 3G launch. Best Buy is still on course to open its first Big Box shops next Spring, including stores in the UK.