Carphone Warehouse Demerger On Track; Reiterates Fiscal Year Guidance
October 08 2009 - 2:31AM
Dow Jones News
U.K. mobile retailer and broadband provider Carphone Warehouse
PLC (CPW.LN) said it is increasingly confident of completing a
demerger by March 2010 as the company reiterated full year guidance
and reported better-than-expected performance in both its
businesses.
In the last two years the group has reshaped its business,
spinning off its mobile phone retail offering into a joint venture
with Best Buy Co. Inc (BBY) and building a fixed line broadband
business, TalkTalk, from scratch into the largest residential
broadband provider in the U.K., albeit with a leg-up from its
recent acquisition of Tiscali U.K.
The company is preparing to demerge Best Buy Europe from
TalkTalk and said Thursday it is increasingly confident of
completion by the end of March 2010.
Carphone also reiterated its full year guidance for 10% growth
in headline earnings per share, excluding one-off items and some
amortization associated with its acquisitions, and GBP150 million
of free cash flow.
TalkTalk added 77,000 new broadband customers in the second
quarter, excluding its recent acquisition of Tiscali U.K., well
ahead of company consensus forecasts for 41,000 net new
additions.
Still, the company lost 62,000 Tiscali customers in the same
period, in line with its expectations, and said after completing
the merger it has found that Tiscali had 160,000 fewer customers
than previously indicated.
But this would not affect the company's goal of taking its
broadband base to between 4.1 million and 4.2 million by the
year-end and it would also receive an undisclosed payment for the
lower subscriber base.
Meanwhile Best Buy Europe grew its total connections by 2.0% in
the period, bringing the total connections for the group to 3.17
million, again ahead of company consensus forecasts for 3.11
million subscribers.
Carphone shares closed Wednesday at 205p.
-By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293;
kathy.sandler@dowjones.com