Carphone Warehouse announced a major shake-up alongside its latest half-year results, including plans to shelve its 11 'big box' stores in the UK and the disposal of its stake in its North American Best Buy Mobile venture to US partner Best Buy for £838m.
The decision to shut the 11 UK megastores came after their losses swelled to £46.7m in the past six months (from £28.8m a year earlier), and further cash costs of up to £75m and non-cash asset writedowns of up to £45m are expected as the business is wound down over the course of the year. The introduction of 24-month mobile contracts also saw earnings halve at its CPW Europe business, and meant that earnings in Best Buy Europe – its 50:50 joint venture with Best Buy – slumped 69 per cent to £18.3m.
However, analysts welcomed news of the UK closures as well as the £813m that will be returned to shareholders after the US disposal, worth an estimated 170p a share, with holders able to choose between receiving income or capital via a 'B' share scheme. Good news also came in the form of a new venture with Best Buy, Global Connect, which aims to replicate the successful Best Buy Mobile model in emerging markets such as Mexico and China through partnerships with major local retailers.
CARPHONE WAREHOUSE GROUP (CPW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 352p | MARKET VALUE: | £1.61bn | |
| TOUCH: | 352-353p | 12-MONTH HIGH: | 450p | LOW: 300p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 159p | NET CASH: | £97.1m | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 2.80 | 23.7 | 5.20 | nil |
| 2011 | 2.80 | 5.30 | 1.00 | 1.75 |
| % change | – | -78 | -81 | – |
Ex-div: 16 Nov Payment: 16 Dec | ||||
