Feeds

Carphone Warehouse plans for split after pre-tax loss

Sprawling company still in 'good shape'

Choosing a cloud hosting partner with confidence

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." ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Sea-Me-We 5 construction starts
New sub cable to go live 2016
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
BT claims almost-gigabit connections over COPPER WIRE
Just need to bring the fibre box within 19m ...
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
Surprise: if you work from home you need the Internet
Buffer-rage sends Aussies out to experience road rage
EE buys 58 Phones 4u stores for £2.5m after picking over carcass
Operator says it will safeguard 359 jobs, plans lick of paint
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.