Carphone Warehouse to split in two by summer 2010
Carphone Warehouse today said it would spin-off its TalkTalk broadband business by July 2010 at the latest as it reported results after a “significant year of achievement”.
The group — which sold its retail business into a joint venture deal with US consumer electronics giant Best Buy last year – said it was “confident” of a demerger by next summer.
Carphone saw revenues drop by 2.7% in its TalkTalk business in the year to March 31, although underlying earnings rose 56% to £181m.
It recently announced a £236m deal to buy the UK operations of Italian broadband firm Tiscali — a move that will see its TalkTalk arm become the second biggest UK broadband provider after BT.
Best Buy Europe, in which Carphone now has a 50% stake and includes its European and US retail stores, saw annual underlying earnings fall 13% to £188m.
Carphone said its TalkTalk and retail operations are already effectively operating as two different entities, each with separate management teams.
However, the firm is proposing to install founder Charles Dunstone as executive chairman of both businesses.
Mr Dunstone said: “It's been increasingly obvious that the group is now two businesses — Best Buy Europe and TalkTalk Group.
“Both have now reached the stage where there are no material synergies between them and for operational and competitive reasons, they need to operate independently.
“We are now close to finalising separate banking facilities for Best Buy Europe, which enables us to be confident of completing our demerger process by July 2010.”