Carphone Warehouse considering demerger

18 Nov 2008

The Financial Times is reporting that UK-based Carphone Warehouse is considering a demerger of its retail and telecoms units due to the difficult economic climate. Charles Dunstone, Carphone’s chief executive, said, ‘We recognise… the structure of the group may now no longer be appropriate for the optimal development of the two businesses. The board has therefore initiated a formal review of the group’s corporate structure and capital requirements, which may lead to a separation of the two businesses.’ The company has announced that it will review its structure by spring 2009. In separate but related news Reuters is reporting that Carphone rival BSkyB is unlikely to bid for the telecoms unit of the former should a demerger take place. British mobile group Vodafone has been linked with a possible bid.

Carphone Warehouse has revealed that for the 26 weeks to 27 September it made a loss of GBP11 million (USD16.3 million) compared to a loss of GBP38 million in the same period last year. Revenues for the group fell 2% year-on-year to GBP697 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 51% to GBP112 million.

United Kingdom, Sky, TalkTalk, Vodafone UK