Feeds

Carphone Warehouse plans for split after pre-tax loss

Sprawling company still in 'good shape'

Best practices for enterprise data

Carphone Warehouse boss Charles Dunstone has launched a "formal review of the group's corporate structure" which could lead to the breakup of the telecoms group.

Dunstone confirmed a split was possible as the firm unveiled interim results which showed a pre-tax loss and "headline" profits falling across the company's businesses.

The results for the last six months show revenue for the group down two per cent, to £697m, as the broadband market becomes increasingly competitive and the company gets used to owning AOL.

The firm made a pre-tax loss of £11m, compared to last year's loss of £38m. However, it preferred to emphasise earnings before amortization and exceptionals which came in at £47m. And once a gain of £607m from disposals was factored in, it declared net post-tax profits of £601m. It said "headline" post tax profit was £39m compared to £44m last year.

CPW said revenue from the Best Buy Europe venture, which CPW has a 50 per cent share in, is up to £1,617m, but earnings before interest and tax were down 20 per cent to £37m.

The transition from mobile phone supplier to all-things-laptop is taking its toll, with shops clearing old stock to make space for small, cheap, computers and staff getting trained up to join the "geek squad". Not that there are quite so many shops - CPW spent £26m closing 100 stores, though Best Buy Europe spent £50m opening new ones.

The integration of AOL customers saw 93,000 of them disappear. 48,000 of these were just entries in the billing system and the remainder will be migrated onto TalkTalk as quickly as possible.

TalkTalk gets personalised too, with myTalkTalk: a service that will allow punters to pay four quid a month for an additional lump of bandwidth, voice calling or security software, without contractual obligation.

Splitting the company into retail and service provision is certainly on the table, with a "formal review" due to be completed by the end of Spring next year. Any split will still see Dunstone in charge of both halves, though.

"We recognise, however, that the structure of the Group may now no longer be appropriate for the optimal development of the two businesses," he said. "The Board has therefore initiated a formal review of the Group's corporate structure and capital requirements, which may lead to a separation of the two businesses. In this instance I would remain closely involved with both companies."

Given the uncertainty of the world economy it probably makes sense to sit still for a while and see how things develop. Carphone Warehouse is confident that it has the balance sheet to manage the down-turn and be ready to take advantage of the recovery when it happens.

As Dunstone puts it: "The next 12 months are likely to represent the most challenging economic climate we have ever operated in. With little debt and £900m of facilities, the Group is very well positioned to withstand the financial turmoil." ®

Recommendations for simplifying OS migration

More from The Register

next story
Trying to sell your house? It'd better have KILLER mobile coverage
More NB than transport links to next-gen buyers - study
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Speak your brains on SIGNAL-FREE mobile comms
Readers chat to the pair who flog the tech
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?