Exhibit 99.1

 

 

Friday 27 November 2009

 

For immediate release

 

The Carphone Warehouse Group PLC

 

Interim results for the 6 months to 30 September 2009

 

·                  Strong performance ahead of market expectations

·                  Significantly improved cash flow generation

·                  Demerger well on track for March 2010

 

Headlines:

·                  Results ahead of expectations with Headline EPS of 6.0p (2008: 3.2p)

·                  Significant year-on-year cash flow improvement in both TalkTalk Group and Best Buy Europe

·                  Headline EPS guidance for March 2010 increased to between 14.0p and 15.0p (FY09: 12.6p) due to strong EBIT performance in both TalkTalk Group and Best Buy Europe

 

TalkTalk Group:

·                  TalkTalk Group operating free cash flow of £75m (2008: outflow of £8m)

·                  Acquisition of Tiscali UK for £235m taking the customer base to over 4.1m customers

·                  Operating free cash flow guidance for March 2010 of approximately £120m, even after an additional £10m of capital expenditure announced today as we expand our footprint of unbundled exchanges up to 2000 exchanges

 

Best Buy Europe:

·                  Best Buy Europe operating free cash flow outflow of £47m (2008: outflow of £193m)

·                  LFL revenue growth of 3.1% (negative 0.9% on a constant currency basis)

·                  Group’s share of net income for March 2010 now expected to be at top end of our existing £30m to £40m guidance range

·                  Operating free cash flow guidance for March 2010, after all “Big Box” investment, maintained at £50m

 

Demerger:

·                  Banking facilities now agreed

·                  Demerger to be completed by end of March 2010

 

		6 months ended 30 September 2009		26 weeks ended 27 September 2008
		£m		£m		% growth
				Restated**
Revenue		789		697		13	%
Headline results*
EBITDA		103		65		58	%
Profit before tax		75		40		88	%
Profit after tax		54		29		86	%
Earnings per share		6.0	p	3.2	p	88	%
Statutory results
Profit after tax		20		574
Continuing operations		20		(17	)
Discontinued operations		—		591
Earnings per share		2.2	p	64.2	p

 

* Stated before amortisation of acquisition intangibles, and before exceptional items, as reconciled in note 6.

** Prior period results have been restated to reflect a change in the Group’s accounting policy for subscriber acquisition costs, which are now expensed as incurred.

 

 

Charles Dunstone, CEO, said:

“Both TalkTalk Group and Best Buy Europe have traded well in the first half of the financial year. Each business has delivered a significant year-on-year improvement in operating free cash flow, with Headline EPS at the top end of market expectations. As a result, we are raising guidance for the full year to March 2010.”

 

“At TalkTalk Group, customer growth is ahead of expectations with continued migration of customers onto our fully unbundled network and markedly improved customer loyalty. Excluding Tiscali, we added 124,000 net new customers in the first half, and we expect continued strong customer growth in the second half. TalkTalk Group’s operational progress is translating into improved profitability and markedly improved operating free cash flow. For the six months period to September, it generated £75m of operating free cash flow compared to an outflow of £8m for the corresponding period last year.”

 

“Our Tiscali UK acquisition in early July has cemented our position as a leading player in the UK telecoms market, significantly increased our residential broadband base and enhancing earnings per share. We have made a good start in integrating the business and remain on track to deliver the synergies announced at the time of acquisition.”

 

“Best Buy Europe, in which we have a 50% share, also delivered strong growth, with year-on-year connections growth of 2% being ahead of our initial projections and achieved despite the overall European handset market remaining subdued versus historical levels. We continued to gain market share in a number of markets and particularly in the high-end smartphone category. Like-for-like revenue was up 3.1% on an actual currency basis, down 0.9% on a constant currency basis. A stronger focus on cash saw a clear improvement year-on-year in operating free cash flow and in particular a marked improvement in working capital. Elsewhere within the division, Best Buy Mobile demonstrated clear profit expansion versus last year, whilst our Best Buy branded “Big Box” store openings remain fully on course for their Spring 2010 unveiling.”

 

“Virgin Mobile France, in which we have a 48.5% stake, performed well with strong growth in its customer base, particularly on postpay tariffs. Since the period end, Virgin Mobile France has agreed to acquire Tele2 France for a cash consideration of €56m on a debt free basis, subject to anti-trust authorities’ clearance. The acquisition marks a major step forward in our growth plans in France, and the resulting margin synergies will promote Virgin’s progress towards its target of being profitable in 2010. Following the transaction, Virgin Mobile France will have over 1.6m customers, of whom more than 60% will be post pay, consolidating its position as France’s largest MVNO and fourth largest mobile operator.”

 

Outlook

“The Group’s strong half year progress, in profitability in both TalkTalk Group and Best Buy Europe means we are increasing guidance for Headline EPS for the current financial year to March 2010, to between 14.0p and 15.0p, the mid-point of this range being above the current analyst consensus.”

 

“In each business, the cash flow progress is encouraging. Within TalkTalk Group we now expect operating free cash flow of approximately £120m, even after an additional £10m of capital expenditure over and above previous guidance, as we expand our unbundled footprint by another 300 exchanges.”

 

“We maintain our guidance for annualised synergies following the acquisition of Tiscali UK of between £40m and £50m in the financial year to March 2011. These synergies will come principally from migrating customers onto our lower cost network, the integration of network backhaul, exchange infrastructure, billing and customer management systems, and back office operations.”

 

“Within Best Buy Europe we maintain our guidance for full year operating free cash flow of £50m, after all “Big Box” investment. We also now expect our share of net income for the full year to be at the top end of the existing £30m to £40m guidance range.”

 

“Our guidance for Best Buy branded “Big Box” store openings remains unchanged. We remain fully on track to open our first stores in Spring 2010 and we are making good progress in finalising further store openings. In the US, Best Buy Mobile continues its very strong development and we remain confident in our guidance for a material increase in its profit contribution in the current financial year.”

 

Demerger

The demerger is well on track to be completed by the end of March 2010. The structure is now finalised, and there will be two separately listed businesses with the following composition. The first will be called ‘TalkTalk Group PLC’, which will have a ‘Primary listing’ on the London Stock Exchange. The second will be ‘Carphone Warehouse Group PLC’, which will have a ‘Secondary listing’. This Group will comprise Best Buy Europe (50% ownership), Virgin Mobile France (48.5%), and Carphone Property (including freehold property assets) (100%). TalkTalk Group PLC has secured £650m banking facilities for the post demerger period such that both TalkTalk Group PLC and Carphone Warehouse Group PLC will be fully funded for all of their anticipated medium-term funding requirements. Whilst Carphone Warehouse Group PLC will not be paying dividends for at least 2 years post demerger, it is anticipated that TalkTalk Group PLC will pay dividends from the outset equivalent to that of the current Group with a progressive policy thereafter.

 

 

Review of businesses

 

TalkTalk Group

 

Headline financials

 

		2009		2008
		£m		£m
				Restated**
Revenue		789		697
Broadband and non-broadband*		631		549
Business		158		148
EBITDA pre SAC and marketing		176		145
SAC and marketing		(69	)	(72	)
EBITDA		107		73
Depreciation and amortisation		(34	)	(27	)
EBIT		73		46
EBIT%		9.3	%	6.6	%

 

* Comprises residential customers and small business customers with similar profiles.

** Last year’s numbers have been restated to reflect a change in the Group’s accounting policy for subscriber acquisition costs, which are now expensed as incurred.

 

TalkTalk Group generated revenues of £789m and EBIT of £73m, compared to revenues of £697m and EBIT of £46m last year, resulting in an increase in EBIT margin from 6.6% to 9.3%. This result reflects the acquisition of Tiscali, the continued increase in the proportion of customers on our own network year-on-year, and the business reorganisation undertaken in 2009.

 

Acquisition of Tiscali UK

On 3 July 2009, TalkTalk Group completed the acquisition of the UK businesses of Tiscali S.p.A for a net cash consideration of £235m, which is subject to adjustment for customer numbers and working capital.

 

The integration of the Tiscali businesses into TalkTalk Group has started well, and we continue to target annualised synergies of £40m to £50m by March 2011, principally through customer migration, the integration of network backhaul, exchange infrastructure, billing and customer management systems, and back office operations.

 

Broadband & non-broadband

Total broadband & non-broadband revenues including Tiscali were up 15% to £631m (2008: £549m). Revenues excluding Tiscali were £534m, down 3%, primarily due to the expected continued decline in the non-broadband customer base, partially offset by the growing broadband base.

 

The broadband customer base including Tiscali was up 48% year-on-year to 4.12m. The total TalkTalk Group broadband base excluding Tiscali was 2.93m, up 5% year on year.

 

TalkTalk Group added 62,000 net new broadband subscribers in the period to September 2009. Excluding Tiscali, TalkTalk Group added 124,000 net new broadband customers, further demonstrating that despite the difficult consumer environment, the business continues to benefit from its clear and simple value proposition. Churn continues to be low, in line with expectations.

 

Blended broadband ARPU including Tiscali was £23.5, an increase of 4% year-on-year (2008: £22.5). ARPU excluding Tiscali was £23.9, an increase of 6% year on year. This was driven primarily by the successful move towards TalkTalk bundled packages of line rental, voice and broadband.

 

The non-broadband base, comprising voice only and internet dial up customers, was 1.20m at the end of the period. The underlying TalkTalk Group base excluding Tiscali declined, in line with expectations, to 1.00m, representing a 24% decline year-on-year compared to 35% in the prior year. The improvement reflects reduced churn on the voice bases, higher levels of gross additions in the period and the reducing mix of narrowband customers in the base.

 

Non-broadband ARPU decreased 4% to £19.3 (2008: £20.1) reflecting lower ARPU on Tiscali customers. Excluding Tiscali, APRU was £19.9, a decrease of 1% year-on-year.

 

At September 2009, 2.95m broadband customers were on our own unbundled network. Excluding Tiscali customers, we had 2.32m (2008: 2.03m) customers on our network, representing a 14.5% increase year-on-year, with a penetration of 79% compared to 73% last year. The TalkTalk Group fully unbundled network now extends to 1,714 exchanges, equivalent to 81% coverage of the UK population. At September 2009, approximately 51% of the Tiscali broadband customer base was unbundled, leaving a significant opportunity to migrate more customers onto our network and drive material post-acquisition synergies.

 

 

Business

Business revenues increased by 7% to £158m (2008: £148m). Underlying revenue, excluding Tiscali, increased by £2m, primarily due to the success of Opal’s new broadband product offering.

 

The combined complementary product set, including the new Ethernet proposition, gives an opportunity to cross sell to the enlarged Business base and will enable customers to benefit from a wider choice of corporate services.

 

EBITDA pre SAC and marketing

EBITDA pre SAC and marketing grew 21% year-on-year to £176m (2008: £145m). This improvement predominantly reflects contribution from Tiscali, growth in the TalkTalk customer base, the increasing mix of these customers on our LLU network, and the impact of last year’s reorganisation programme.

 

SAC and marketing

Subscriber acquisition and marketing costs amounted to £69m in the first half, a reduction of 4% on the previous year (2008: £72m). While customer additions have increased year-on-year, average cost per addition has decreased.

 

Cash flow

 

		2009		2008
		£m		£m
				Restated*
Headline EBITDA		107		73
Working capital		9		(30	)
Capex		(41	)	(51	)
Operating free cash flow (pre-exceptionals)		75		(8	)

 

* Prior year cash flows have been reclassified to reflect a change in the Group’s accounting policy for subscriber acquisition costs, which are now included within EBITDA rather than investment activities (see note 1).

 

TalkTalk Group generated operating free cash flow of £75m (2008: outflow of £8m). This improvement reflects the strong EBITDA growth described above, lower capex, and an improvement in working capital year-on-year. The working capital outflow in the prior period was caused by timing issues due to a change to calendar month ends, and consequently was not repeated in the current year.

 

Capex, depreciation and amortisation

TalkTalk Group’s capex in the period was £41m, representing a reduction of 20% year-on-year (2008: £51m). Capex is planned to increase in the second half of the year, with additional spend on increasing capacity in existing exchanges and on the ongoing project to increase backhaul capacity. Migrations onto our new CRM and billing platform continue with 1.4 million customers currently live on the system. By the end of the year we anticipate that all TalkTalk broadband customers will have been migrated onto the new system, which will allow enhanced service to our customers in the years ahead.

 

Depreciation and amortisation was up 26% year-on-year at £34m (2008: £27m) reflecting the full year charges for the new CRM and billing system.

 

Best Buy Europe

 

Headline financials (100% basis)

 

		2009		2008
		£m		£m
				Restated*
Revenue		1,674		1,617
Gross margin		481		480
Opex		(413	)	(411	)
Best Buy Mobile		11		5
EBITDA		79		74
Depreciation and amortisation		(47	)	(39	)
EBIT		32		35
EBIT %		1.9	%	2.2	%

 

* Prior year results have been restated to reflect a change in the Group’s accounting policy for subscriber acquisition costs, which are now expensed as incurred (see note 1).

 

Best Buy Europe, in which the Group has a 50% share, generated revenues of £1,674m, representing growth of 4% over last year (2008: £1,617m).  As expected, EBIT was lower at £32m, a decline of 9% year-on-year (2008: £35m), with the EBIT margin falling from 2.2% to 1.9%. EBITDA increased by 7% from £74m to £79m, with the benefits of the reorganisation programme undertaken early in 2009 starting to feed through in the second quarter.

 

 

This improvement was offset by an increase in depreciation and amortisation, which is in part due to a change in the allocation of shared IT costs following the Best Buy transaction at the end of June 2008.

 

Mobile connections for the period were up 2% to 5.9m, despite tough comparatives, with the 3G iPhone launched in the UK in July 2008. The handset market remains subdued but we continue to gain market share in a number of European territories, especially within the high value smartphone segment.

 

Like-for-like revenue, stripping out the impact of new space, was up 3.1% and at constant exchange rates like-for-like revenue was down by 0.9%.

 

Gross margin fell by 1 percentage point year-on-year, reflecting the pattern seen in the second half of last year, as we continued to invest margin in the consumer proposition to drive market share, together with an increase in the level of low margin sales to dealers.

 

We remain confident that the reorganisation programme noted above will deliver annualised cost savings of over £50m, and that this will offset the effect of the reduction in gross margin percentage. Opex was down significantly year-on-year on a constant currency basis and when the investment in “Big Box” is backed out.

 

We opened 63 stores and closed another 63, and the store base therefore remained at 2,459. Within this total, the number of franchise stores increased from 219 at March 2009 to 223. Average selling space including franchises was up 6% year-on-year to 135,700 sqm (2008: 128,000 sqm).

 

We now have 17 Wireless World stores open, and both sales performance and customer feedback have been very positive. Consequently, we are continuing to develop our larger format Wireless World stores and we are targeting 40-50 by the end of the year. This will be achieved through a mixture of new stores and refits. We plan an accelerating rollout in the next financial year. Wireless World stores are typically between 150 and 300 sqm, compared to our traditional store size of 50 to 60 sqm. They offer a wider range of laptops and areas dedicated to gaming, wireless TV and music services, all backed up by an in-store Geek Squad presence.

 

Best Buy Mobile, Best Buy’s mobile phone retailing operations in North America in which Best Buy Europe has a profit sharing arrangement, made further strong progress during the period. Best Buy Mobile now operates from all of Best Buy’s 1,055 “Big Box” stores and from 52 standalone stores, up from 39 at March 2009. Both formats have shown strong revenue growth in the period, and the business now has an estimated 3% share of the US mobile handset market, up from 1% before its launch. As a result of this performance, Best Buy Europe received a profit share of £11m for the period, up from £5m in the same period last year.

 

We continued to invest in the development of a Best Buy branded “Big Box” proposition for the UK market, incurring further operating costs of £7m in the period (2008: £nil). We remain on course to open our first stores in the spring of 2010, with an online proposition due to be launched in summer 2010 and further store openings planned for the second half of next year and beyond.

 

Cash Flow (100% basis)

 

		2009		2008
		£m		£m
				Restated*
Headline EBITDA		79		74
Working capital		(91	)	(217	)
Capex		(35	)	(50	)
Operating free cash flow (pre-exceptionals)		(47	)	(193	)

 

* Prior year cash flows have been reclassified to reflect a change in the Group’s accounting policy for subscriber acquisition costs, which are now included within EBITDA rather than investment activities (see note 1).

 

Capex and working capital

Capex in Best Buy Europe was £35m, a reduction of 30% year-on-year (2008: £50m) mainly as a result of the reduction in new store openings and IT spend.

 

The working capital outflow in Best Buy Europe was £91m in the first half (2008: £217m). This improvement represents a more typical seasonal profile than last year, when a change in network terms resulted in a one-off increase in deferred commissions.

 

During the period, Best Buy Europe agreed a standalone banking facility of £350m, which expires in July 2012. At the end of September, net debt within Best Buy Europe was £129m.

 

 

Virgin Mobile France

 

Headline financials (100% basis)

 

		2009		2008
		£m		£m
Revenue*		88		64
EBITDA		(17	)	(8	)
Depreciation and amortisation		(2	)	(1	)
EBIT		(19	)	(9	)

 

* The revenue figures above represent revenues derived from the Virgin customer base, and excludes contributions towards SAC from network operators and customers.

 

Our French MVNO in partnership with Virgin, Virgin Mobile France, had a successful period, achieving strong organic growth and agreeing in October the acquisition of Tele2 Mobile SAS.

 

The Virgin Mobile customer base increased from 1.0m at September 2008 to 1.2m customers at September 2009, of whom 49% are postpay (2008: 45%) driving growth in customer base revenue of 38% from £64m to £88m, in part reflecting the strengthening of the Euro year-on-year.

 

This customer base growth, together with increased marketing activity and higher customer acquisitions, caused an increase SAC and marketing cost year-on-year. As a result of this investment, the Group’s share of losses from the joint venture increased from £3m to £7m. We remain confident that the business will break even towards the end of the year, and that it will be EBITDA positive in the financial year to March 2011.

 

The Tele2 acquisition, for a cash consideration of €56m, will bring an estimated 385,000 additional customers, of whom 375,000 are on subscription contracts. The transaction is subject to approval from the anti-trust authorities, which is expected before year end 2009.

 

Central costs

Central costs not directly allocable to business units amounted to £4m, compared to £8m in 2008.  The year-on-year reduction principally reflects reduced headcount and lower charges for share options.

 

Acquisitions

On 3 July 2009, the Group acquired the UK businesses of Tiscali S.p.A for a net cash consideration of £235m.  Acquisition intangibles of £95m arose on the purchase, principally on customer bases, against which a deferred tax liability of £27m has been recognised. Deferred tax assets of £76m have provisionally been recognised at acquisition in respect of tax losses and unclaimed capital allowances; the value of these assets will be refined in the second half of the year. Goodwill of £157m arose on the acquisition, reflecting buyer-specific synergies and the elimination from the market of a significant competitor.

 

Amortisation of acquisition intangibles

The amortisation charge on acquisition intangibles was £41m (2008: £35m). The prior period charge relates almost entirely to assets arising on the acquisition of AOL’s UK access business in 2006. The increase in the current period relates to the Tiscali acquisition.  A tax credit of £11m (2008: £10m) has been recognised against this charge.

 

Exceptional items

Exceptional costs of £4m have arisen from TalkTalk Group integration programme, principally comprising redundancy and consultancy costs. Further one-off integration costs may arise in the second half of this financial year, rather than the following year, if the integration process continues at its current rate of development. Exceptional costs, principally professional fees, are expected to arise in relation to the demerger.

 

Interest

The net interest charge for the period was £2m (2008: £8m) with the charge for last year reflecting 3 months of significantly higher debt before the sale of half the Group’s retail and distribution business to Best Buy at the end of the first quarter.

 

Taxation

An effective rate of taxation of 28% (2008: 28%) has been applied to Headline profit before taxation from continuing operations, excluding profits or losses from joint ventures, which are recorded net of tax. Adjustments of £2m in respect of prior years have also been recorded in the period.

 

Cash flow and net debt

At 30 September 2009, Group net debt was £361m, compared to underlying net debt (before borrowings used to fund Best Buy Europe) of £159m at the last financial year end, predominantly reflecting the cash outflow on the acquisition of Tiscali.

 

 

The main divisional cash flow items have been described in the divisional overviews above.  At the Group level, we also paid a final dividend of £27m.

 

Dividends

The Board has declared an interim dividend of 1.45p per share (2008: 1.35p per share).  The ex-dividend date will be 9 December 2009 and the record date will be 11 December 2009.   The intended payment date will be 8 January 2010.

 

Analysts’ presentation and webcast

There will be a presentation for investors and analysts at 9.00 am this morning at the offices of UBS, 1 Finsbury Avenue, London EC2M 2PP.  The event will be audio webcast and the presentation slides will be available on our website, www.cpwplc.com.

 

Next trading update

The Group will give a full trading update, including revenues, connections and customer bases, for the third quarter of the current financial year on 19 January 2010.

 

For Further Information

 

For analyst and institutional enquiries:

 

Roger Taylor	07715 170090
Christian Maher	07900 243308
Carla Bloom	07891 094542
For media enquiries
Mark Schmid	07920 484787
Shane Conway	07932 199659
Anthony Carlisle (Citigate Dewe Rogerson)	07973 611888
	020 7638 9571

 

 

  FINANCIAL REVIEW

 

Condensed consolidated income statement for the 6 months ended 30 September 2009

 

With 26 weeks ended 27 September 2008 comparatives

 

				Before amortisation of acquisition intangibles and exceptional items		Amortisation of acquisition intangibles and exceptional items* (see note 3)		After amortisation of acquisition intangibles and exceptional items		Before amortisation of acquisition intangibles and exceptional items		Amortisation of acquisition intangibles and exceptional items* (see note 3)		After amortisation of acquisition intangibles and exceptional items
				6 months ended 30 September 2009  (Unaudited)						26 weeks ended 27 September 2008 (Unaudited) (Restated — see note 1)
		Notes		£m		£m		£m		£m		£m		£m
Continuing operations
Revenue		2		789		—		789		697		—		697
Cost of sales				(396	)	—		(396	)	(366	)	—		(366	)
Gross profit				393		—		393		331		—		331
Operating expenses excluding amortisation and depreciation				(290	)	(4	)	(294	)	(266	)	(13	)	(279	)
EBITDA		2		103		(4	)	99		65		(13	)	52
Depreciation		2		(23	)	—		(23	)	(20	)	—		(20	)
Amortisation		2		(11	)	(41	)	(52	)	(7	)	(35	)	(42	)
Share of results of joint ventures and associates		2,9		8		—		8		10		(10	)	—
Profit (loss) before interest and taxation				77		(45	)	32		48		(58	)	(10	)
Interest income				3		—		3		3		—		3
Interest expense				(5	)	—		(5	)	(11	)	(5	)	(16	)
Profit (loss) before taxation				75		(45	)	30		40		(63	)	(23	)
Taxation		4		(21	)	11		(10	)	(9	)	15		6
Net profit (loss) for the period from continuing operations				54		(34	)	20		31		(48	)	(17	)
Net (loss) profit for the period from discontinued operations				—		—		—		(2	)	593		591
Net profit for the period				54		(34	)	20		29		545		574
Earnings per share
Basic
Continuing operations		7		6.0	p			2.2	p	3.4p				(1.9	)p
Discontinued operations		7		—				—		(0.2	)p			66.1	p
Total		7		6.0	p			2.2	p	3.2	p			64.2	p
Diluted
Continuing operations		7		5.9	p			2.2	p	3.4	p			(1.8	)p
Discontinued operations		7		—				—		(0.2	)p			64.4	p
Total		7		5.9	p			2.2	p	3.2	p			62.6	p

 

* A reconciliation of Headline information to statutory information is provided in note 6 to the interim condensed financial statements.

 

 

Condensed consolidated income statement for the 6 months ended 30 September 2009

 

With year ended 31 March 2009 comparatives

 

				Before amortisation of acquisition intangibles and exceptional items		Amortisation of acquisition intangibles and exceptional items (see note 3)		After amortisation of acquisition intangibles and exceptional items		Before amortisation of acquisition intangibles and exceptional items		Amortisation of acquisition intangibles and exceptional items (see note 3)		After amortisation of acquisition intangibles and exceptional items
				6 months ended 30 September 2009 (Unaudited)						Year ended 31 March 2009  (Audited)
		Notes		£m		£m		£m		£m		£m		£m
Continuing operations
Revenue		2		789		—		789		1,385		—		1,385
Cost of sales				(396	)	—		(396	)	(658	)	—		(658	)
Gross profit				393		—		393		727		—		727
Operating expenses excluding amortisation and depreciation				(290	)	(4	)	(294	)	(556	)	(31	)	(587	)
EBITDA		2		103		(4	)	99		171		(31	)	140
Depreciation		2		(23	)	—		(23	)	(41	)	—		(41	)
Amortisation		2		(11	)	(41	)	(52	)	(16	)	(71	)	(87	)
Share of results of joint ventures and associates		2,9		8		—		8		23		(18	)	5
Profit (loss) before interest and taxation				77		(45	)	32		137		(120	)	17
Interest income				3		—		3		26		—		26
Interest expense				(5	)	—		(5	)	(30	)	(85	)	(115	)
Profit (loss) before taxation				75		(45	)	30		133		(205	)	(72	)
Taxation		4		(21	)	11		(10	)	(19	)	50		31
Net profit (loss) for the period from continuing operations				54		(34	)	20		114		(155	)	(41	)
Net (loss) profit for the period from discontinued operations				—		—		—		(2	)	593		591
Net profit for the period				54		(34	)	20		112		438		550
Earnings per share
Basic
Continuing operations		7		6.0	p			2.2	p	12.8	p			(4.6	)p
Discontinued operations		7		—				—		(0.2	)p			66.2	p
Total		7		6.0	p			2.2	p	12.6	p			61.6	p
Diluted
Continuing operations		7		5.9	p			2.2	p	12.5	p			(4.5	)p
Discontinued operations		7		—				—		(0.2	)p			64.8	p
Total		7		5.9	p			2.2	p	12.3	p			60.3	p

 

* A reconciliation of Headline information to statutory information is provided in note 6 to the interim condensed financial statements.

 

 

Condensed consolidated statement of comprehensive income for the 6 months ended 30 September 2009

 

		6 months ended 30 September 2009 (Unaudited) £m		26 weeks ended 27 September 2008 (Unaudited) (Restated  - see note 1) £m		Year ended 31 March 2009 (Audited) £m
Net profit for the period		20		574		550
Currency translation and cash flow hedges		—		9		25
Net transfer to profit on disposal from equity of cumulative translation differences for discontinued activities		—		(10	)	(10	)
Net transfer to profit on disposal from equity of gains on available-for-sale assets for discontinued activities		—		(2	)	(2	)
Net change in available-for-sale investments		—		—		1
Taxation on items recognised directly in reserves		2		(12	)	(16	)
Total comprehensive income for the period		22		559		548

 

Condensed consolidated statement of changes in equity for the 6 months ended 30 September 2009

 

		Share Capital £m		Share premium reserve £m		Translation reserve £m		Accumulated profits £m		Total £m
Balance as at 1 April 2009		1		476		(51	)	690		1,116
Total comprehensive income for the period		—		—		—		22		22
Net cost of share-based payments		—		—		—		1		1
Equity dividends		—		—		—		(27	)	(27	)
Balance at 30 September 2009		1		476		(51	)	686		1,112

 

		Share Capital £m		Share premium reserve £m		Translation reserve £m		Accumulated profits £m		Total £m
Balance as at 30 March 2008 (Restated — see note 1)		1		476		(66	)	240		651
Total comprehensive income for the period		—		—		(1	)	560		559
Net purchase of own shares		—		—		—		(53	)	(53	)
Net cost of share-based payments		—		—		—		4		4
Equity dividends		—		—		—		(26	)	(26	)
Balance at 27 September 2008		1		476		(67	)	725		1,135

 

		Share Capital £m		Share premium reserve £m		Translation reserve £m		Accumulated profits £m		Total £m
Balance as at 30 March 2008		1		476		(66	)	240		651
Total comprehensive income for the period		—		—		15		533		548
Net purchase of own shares		—		—		—		(51	)	(51	)
Net cost of share-based payments		—		—		—		6		6
Equity dividends		—		—		—		(38	)	(38	)
Balance at 31 March 2009		1		476		(51	)	690		1,116

 

 

Condensed consolidated balance sheet as at 30 September 2009

 

		Notes		30 September 2009 (Unaudited) £m		27 September 2008 (Unaudited) (Restated - see note 1) £m		31 March 2009 (Audited) £m
Non-current assets
Goodwill				461		301		304
Other intangible assets				359		306		290
Property, plant and equipment				307		282		285
Non-current asset investments				1		4		1
Interests in joint ventures and associates		9		480		419		470
Loans to joint ventures		9		—		206		293
Deferred tax assets				149		73		108
				1,757		1,591		1,751
Current assets
Stock				3		1		1
Trade and other receivables				200		243		140
Cash and cash equivalents				16		91		6
				219		335		147
Total assets				1,976		1,926		1,898
Current liabilities
Trade and other payables				(400	)	(374	)	(267	)
Corporation tax liabilities				(32	)	(15	)	(33	)
Loans and other borrowings				(2	)	—		(33	)
Provisions				(51	)	(25	)	(24	)
				(485	)	(414	)	(357	)
Non-current liabilities
Trade and other payables				(4	)	—		—
Loans and other borrowings				(375	)	(377	)	(425	)
				(379	)	(377	)	(425	)
Total liabilities				(864	)	(791	)	(782	)
Net assets				1,112		1,135		1,116
Equity
Share capital				1		1		1
Share premium reserve				476		476		476
Translation reserve				(51	)	(67	)	(51	)
Accumulated profits				686		725		690
Funds attributable to equity shareholders				1,112		1,135		1,116

 

Approved by the Board of The Carphone Warehouse Group PLC

26 November 2009

 

 

Condensed consolidated cash flow statement for the 6 months ended 30 September 2009

 

		Notes		6 months ended 30 September 2009 (Unaudited) £m		26 weeks ended 27 September 2008 (Unaudited) (Restated - see note 1) £m		Year ended 31 March 2009 (Audited) £m
Operating activities
Profit (loss) before interest and taxation				32		(10	)	17
Adjustments for non-cash items:
Share-based payments				1		4		6
Non-cash movements on joint ventures and associates				(8	)	—		(5	)
Depreciation				23		20		41
Amortisation				52		42		87
Impairment of non-current asset investments				—		—		5
Operating cash flows before movements in working capital				100		56		151
(Increase) decrease in trade and other receivables				(7	)	(35	)	4
(Increase) decrease in stock				(2	)	1		—
Increase (decrease) in trade and other payables				18		2		(44	)
(Decrease) increase in provisions				(3	)	2		11
Taxation paid				(1	)	—		—
Cash flows from operating activities - continuing				105		26		122
Cash flows from operating activities - discontinued				—		(153	)	(153	)
Cash flows from operating activities				105		(127	)	(31	)
Investing activities
Interest received				3		3		26
Disposal of subsidiaries, net of cash disposed				—		937		937
Acquisition of subsidiaries, net of cash acquired				(235	)	(72	)	(76	)
Acquisition of intangible assets				(17	)	(13	)	(47	)
Acquisition of property, plant and equipment				(24	)	(38	)	(59	)
Acquisition of non-current asset investments				—		—		(1	)
Investment in joint ventures and associates				(3	)	(24	)	(47	)
Cash flows from investing activities - continuing				(276	)	793		733
Cash flows from investing activities - discontinued				—		(25	)	(25	)
Cash flows from investing activities				(276	)	768		708
Financing activities
Net purchase of own shares				—		(53	)	(51	)
Decrease in borrowings		10		(49	)	(534	)	(621	)
Financing provided to Best Buy Europe				293		9		(28	)
Interest paid				(5	)	(11	)	(30	)
Dividends paid		8		(27	)	(26	)	(38	)
Cash flows from financing activities - continuing				212		(615	)	(768	)
Cash flows from financing activities - discontinued				—		(3	)	(3	)
Cash flows from financing activities				212		(618	)	(771	)
Net increase (decrease) in cash and cash equivalents				41		23		(94	)
Cash and cash equivalents at the start of the period				(27	)	68		68
Effect of exchange rates fluctuations				—		—		(1	)
Cash and cash equivalents at the end of the period		10		14		91		(27	)
Cash and cash equivalents for the purposes of this statement comprise:
Cash and cash equivalents				16		91		6
Bank overdrafts				(2	)	—		(33	)
		10		14		91		(27	)