Carphone Warehouse's (CPW) half-year figures don't make comparisons easy. To begin with, accounting changes last year mean that the French operation's revenue is no longer recognised - it's being closed and £31m of costs associated with that explain the reported loss. Meanwhile, the contribution from having acquired the 50 per cent of CPW that it didn't already own explains the hefty revenue jump. On an underlying basis, group pre-tax profit rose to £19m from £4m.
Within the core CPW unit, the pre-pay phone market continued to be weak which, after post-pay growth, made for flat connection volumes of 4.1m. Despite this, CPW still generated pro-forma like-for-like revenue growth of 8.3 per cent to £1.56bn, reflecting the strength of the post-pay contract market, although CPW's gross margin slipped 150 basis points to 23.6 per cent as phone sellers gear-up for the full launch of 4G. Indeed, the appearance of 4G has seen consumers and dealers cut activity until there's more clarity on the deals that will be available for the new technology. Accordingly, the first quarter was better than the second and like-for-like sales at CPW slowed to 3.6 per cent in the second quarter.
Deutsche Bank expects full-year adjusted pre-tax profit of £139m, giving adjusted EPS of 19.1p (from £59m and 12.12p in 2013).
CARPHONE WAREHOUSE (CPW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 279p | MARKET VALUE: | £1.61bn | |
| TOUCH: | 279-280p | 12-MONTH HIGH: | 280p | LOW: 180p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 141p* | NET DEBT: | 24% | |
| Half-year to 28 Sep | Turnover (£m)† | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 5.00 | 8.00 | 1.50 | 1.75 |
| 2013 | 862 | -25.0 | -5.00 | 2.00 |
| % change | +17,140 | - | - | +14 |
Ex-div: 20 Nov Payment: 13 Dec *Includes intangible assets of £620m, or 107p a share †Reflects wholly-owned operations only | ||||
