Carphone Warehouse

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  • Carphone Warehouse
    Carphone Warehouse
    October 11, 2016

    The Carphone Warehouse’s proposed acquisition of the AOL UK [...]

    The Carphone Warehouse (CPW)'s £370 million acquisition of AOL UK's internet access business is set to quadruple the size of CPW's UK broadband customer base, enabling it to become the third largest player in the market after NTL and BT, with approximately 2 million broadband subscribers

  • February 12, 2012

    Enders Analysis’ Annual Conference

    Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 19 January 2012. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. An edited transcript of notes taken during the speaker presentations follows.
  • Carphone Warehouse
    Carphone Warehouse
    January 26, 2012

    Carphone Warehouse December quarter results: Weak prepay hits rev [...]

    Carphone Warehouse's Q3 2011/12 volume and revenue was severely hit by a steep reduction in UK prepay volumes, with prepay subsidy cuts driving a drop in the UK market of as much as 40%. However, stronger volumes of higher margin contract handsets drove a small improvement in gross profit for the quarter. The unexpected prepay weakness means that Carphone Warehouse's handset business will have roughly flat operating profit in its 2011/12 financial year at best, although given the negative external factors this would reflect a strong underlying performance.

  • Carphone Warehouse
    Carphone Warehouse
    November 16, 2011

    Carphone Warehouse H1 2011/12 results: Late handset launches hurt

    Carphone Warehouse's H1 2011/12 results were overshadowed somewhat by the announcements that it is shutting down its UK ¬Ďbig box' consumer electronics venture and selling its share in the Best Buy US handset business. Its actual core business operating performance was grim, with drops of 12% in volume and 4.5% in like-for-like revenue in the September quarter, with the slashing of prepay subsidies in the UK hitting volumes, and the late arrival of the iPhone 4S hitting revenue. With the iPhone 4S having now launched, H2 is likely to be much better, with like-for-like revenue returning to growth, and a focus on the core business will help in weathering the economic headwinds to come.

  • H3G
    H3G
    August 8, 2011

    H3G H1 2011 results: UK strengthens, Italy weakens

    After strong underlying improvements in growth and profitability in 2010, in H1 2011 H3G Europe's service revenue growth was steady at 3% and margins only slightly improved to (underlying) EBIT breakeven. In the UK, service revenue growth accelerated to 7% (from -1% in H2 2010), with EBIT maintained at about breakeven, as the UK company's ongoing strong contract subscriber growth fed through. Italy suffered roughly the opposite fate, with service revenue growth falling to -8%, as its recent subscriber losses fed through, and EBIT remained firmly negative.

  • Carphone Warehouse
    Carphone Warehouse
    July 27, 2011

    Carphone Warehouse Q1 2011/12 results: weak start to the year

    CPW Europe had a weak first quarter, with like-for-like revenue growth of -3.3%, with all of the drop coming from the 18 to 24 month contract length shift in the UK. We expect its performance to improve through the rest of its fiscal year, but it will need to in order to hit even the bottom end of its full year guidance. The US mobile retailing operation is doing much better, with very strong revenue growth, and is likely again to exceed full year guidance.

  • Placeholder
    Placeholder
    June 14, 2011

    Mobile user survey 2011: More smartphones, more usage of smartpho [...]

    The most dramatic observation from our survey is the surge in mobile data service usage: 48% of UK mobile users now use a data service at least once a month, up from just 30% last year. This increase is substantially all from the increased number of internet-centric smartphones (i.e. iPhone, BlackBerry and Android handsets) in the base. The internet-centric smartphones themselves had substantially no reduction in data usage penetration rates (all at 90%+) despite their volumes surging, with users from all age and socio-economic groups using them for data services. Data service usage penetration on a daily basis actually increased for Android and BlackBerry handsets. This supports our view that it is the nature of these handsets in terms of their ease-of-use for data services that is driving overall usage, and that overall data usage will continue to surge as they continue to diffuse through the subscriber base.

  • Carphone Warehouse
    Carphone Warehouse
    May 5, 2011

    Carphone Warehouse Q4 2010/11 results: weathering storms

    CPW Europe had a difficult quarter, with volumes falling 9% and like-for-like revenue 2%, due to continued prepay weakness and the shift to 24 month contracts in the UK. The US business was again very strong, growing volumes at 26%, and this strength is likely to continue due to an acceleration in store roll outs. Keeping the European business flat in 2011/12 will be a challenge, but the US business is likely to more than make up for this at the group level.

  • H3G
    H3G
    March 31, 2011

    H3G 2010 results: improving to breakeven

    H3G Europe improved its revenue growth and margins in 2010, albeit not by as much as its headline figures claimed. It is currently growing at 5% with EBIT at around breakeven. Given that its parent company is likely to want to keep EBIT positive, it is likely to be constrained on future investment in subscriber growth, limiting its potential going forward. The UK was particularly strong, with dramatically improved contract subscriber growth, and margins improving despite this, driven by the completion of the T-Mobile network share implementation helping margins and the smartphone revolution playing to the company's 3G network strengths.

  • Carphone Warehouse
    Carphone Warehouse
    January 20, 2011

    Carphone Warehouse Q3 2010-11 results

    CPW's European volume and revenue growth dropped in the December quarter, but this was largely due to the higher mix of prepay in the Christmas period, with underlying trends (strong contract, weak prepay) unchanged. US volume growth surged to 34% as the company continued to roll out standalone stores in malls and shopping centres, and there appears to be plenty of growth to come. Looking forward, the UK business is likely to suffer from the longer handset contracts that have been rolled out by the UK mobile operators over the last two years, but continued strength in the US is likely to more than make up for this.

  • Carphone Warehouse
    Carphone Warehouse
    November 8, 2010

    Carphone Warehouse 2010/11 interim results: US driven growth

    CPW's European handset business had a steady quarter, with growth dipping slightly on the previous quarter but still in line with full year guidance. Smartphone sales are surging, and CPW is orientating its business towards them, but their impact is not unambiguously positive in Europe.¬†The US handset business continued to enjoy strong growth, with this side of their business benefitting strongly from smartphone growth, and this outperformance led the company to increase its full year EBIT guidance.¬†The UK ¬Ďbig box' roll-out is continuing, but no sales figures or indications have been given, and the full year operating loss guidance has been increased, eating up some (but not all) of the outperformance from the US. There appears to still be much experimentation involved at this stage, and even more uncertainty about the eventual success or failure of this new business.
  • Carphone Warehouse
    Carphone Warehouse
    July 27, 2010

    Carphone Warehouse June quarter results: steady in Europe, strong [...]

    CPW saw growing revenue but falling volume in its core European handset retail business, as contract handset growth outperformed prepay. We believe that this is in line with a slightly subdued market, with consumer confidence quite weak across a number of European countries. CPW's US business did much better, growing at 30%, and it is this strength that leaves us confident in the group's ability to have a strong full year.
  • Placeholder
    Placeholder
    May 31, 2010

    Project Canvas and the future of television

    Subject to BBC Trust approval, Canvas looks almost certain to launch in spring 2011 after the OFT decided that it did not have the jurisdiction to review Canvas under the merger provisions of the Enterprise Act 2002. The OFT decision does not rule out complaints on other grounds, but the chances of persuading the regulators look very small. The launch of Canvas promises to strengthen significantly the free-to-air digital terrestrial platform, otherwise very limited compared with satellite and cable platforms in terms of bandwidth, but mass adoption poses numerous challenges and it is open to question whether Canvas will ever extend to more than half the DTT base. In the long term, it is hard not to see Canvas as an interim step in the growing convergence between the TV screen and the internet, raising the question of how successfully its PSB TV-centric approach can adapt to the coming challenges of the full blown digital age.
  • Placeholder
    Placeholder
    May 11, 2010

    TTG update and strategy day: changing the mix

    TTG's indicative full year financial results were solid, but were flattered by the acquisition of Tiscali UK in July 2009. Subscriber growth at TalkTalk is exceptionally strong thanks to effective marketing and a strong proposition, if somewhat at the expense of the acquired businesses. Guidance for the new financial year looks undemanding given additional uplift from Tiscali UK; further underlying progress will depend crucially on continuing strong growth at TalkTalk and old fashioned operating leverage based on a single set of platforms, rather than new developments such as high speed broadband or TV.
  • Carphone Warehouse
    Carphone Warehouse
    April 28, 2010

    Carphone Warehouse Group March 2010 quarter trading update: ridin [...]

    CPW grew its core European mobile handset distribution business in underlying like-for-like revenue terms by 3% in the March quarter, and its profits grew by 18% in the 2009/10 year, although connection volumes and actual revenue fell during the quarter. Growth is improving with the recovery, but not dramatically, as its strong competitive performance during the recession is unwinding to some extent. Nonetheless, 2010/11 should see continued improvement, with handset trends still generally going in CPW's direction.¬†The company is currently more than covering the start-up losses at its ¬Ďbig box' consumer electronics business in the UK through steady growth at CPW Europe and dramatic growth in the US, and should continue to do so in 2010/11. However, thereafter there is far more uncertainty, as the big box business will have to start trading well to prevent accelerating losses, and we have no visibility over its prospects as yet.
  • Carphone Warehouse
    Carphone Warehouse
    January 20, 2010

    Carphone Warehouse trading update: clearer water

    At TalkTalk Group (TTG) net broadband additions were solid, possibly helped by stronger growth in total market demand; but churn at Tiscali UK appears to remain high. TTG revenue was heavily distorted by the Tiscali acquisition but appears to remain in gradual decline on a like-for-like basis, due to continuing decline in non-broadband customers. Carphone Warehouse's like-for-like distribution revenue showed a firm pick-up in the quarter, with it likely enjoying the first quarter of significantly improving market growth since the recession started.
  • Carphone Warehouse
    Carphone Warehouse
    November 30, 2009

    Carphone Warehouse Group interim results to September 2009: forgi [...]

    Fixed line revenue growth continued to decline excluding the impact of Tiscali UK, but at a manageable rate, and profitability continued to improve strongly. TalkTalk Group is performing well in the run-up to demerger, and management is sounding very confident. But there are some clouds on the horizon, not least the relaunch of Tesco Telecom. Sky+ HD is now manifestly the centre point of a three-pronged operational strategy that focuses on driving customer growth, selling more products into the customer base and seeking efficiencies in fixed costs. Sky 3D, due for residential launch in H2 2010, fits in well with the core Sky+ HD proposition and the satellite operator looks well placed to combat growing retail competition from other platforms, assuming Ofcom implements its wholesale pay-TV proposals for Sky premium subscription films and sports some time in spring 2010.

  • Carphone Warehouse
    Carphone Warehouse
    October 7, 2009

    Carphone Warehouse September quarter trading update: continued re [...]

    At TalkTalk Group (TTG) net broadband additions at TalkTalk/AOL UK were unexpectedly strong, with low cannibalisation of Tiscali subscribers particularly good news. At the newly acquired Tiscali UK, the inevitable skeletons are starting to emerge from their cupboards. Management appears well prepared for the challenges, although it is early days. Carphone Warehouse's distribution business grew connections at 2.1% during the quarter, another very creditable performance in a declining market, and it remains well positioned for the market recovery.

  • Carphone Warehouse
    Carphone Warehouse
    July 22, 2009

    Carphone Warehouse June quarter trading update: on course

    The distribution business experienced modest growth in connections and revenue, easily outpacing European market handset growth of -15%, as the company continues to build market share. At TalkTalk Group (TTG) net broadband additions for the quarter were relatively strong, given likely market growth, probably due at least in part to reduced subscriber loss at AOL UK. In our view cut-price business broadband, rather than IPTV, offers the best prospect of profitable revenue growth in fixed line.

  • Carphone Warehouse
    Carphone Warehouse
    June 6, 2009

    Carphone Warehouse 2008/09 FY results

    Carphone Warehouse's distribution business had a slightly mixed year, with strong volumes and revenue mitigated by a sharp drop in margins and profit, with margin being sacrificed for market share. Given the very poor recession-hit market for handsets, Carphone Warehouse's market share gains have been dramatic, so the sacrifice was at least not in vain. Although TalkTalk Group missed much of its guidance to March 2009, we now view new guidance as achievable, with the main risks related to the integration of Tiscali UK.

  • Carphone Warehouse
    Carphone Warehouse
    May 9, 2009

    Carphone Warehouse acquisition of Tiscali UK: The Italian Job

    Carphone Warehouse's acquisition of Tiscali UK makes TalkTalk Group the second largest UK ISP and the largest in terms of residential broadband subscribers, just as market growth begins to stall. The company's synergy target looks readily achievable, although integration challenges are significant and could make the acquired customer base difficult to stabilise. Nonetheless, TalkTalk Group now seems set to dominate the ¬Ďvalue' end of the UK residential telecoms market.

  • Carphone Warehouse
    Carphone Warehouse
    April 22, 2009

    Carphone Warehouse March quarter trading update and analyst day

    In fixed line, net broadband additions for the quarter were strong at TalkTalk given a tough market, but remained firmly negative at AOL UK. We are sceptical of new guidance for fixed line for the year to March 2010, but still expect reasonable performance, given the slowdown in broadband market growth. The distribution business continued to defy the consumer downturn in volume terms, with 12% connections growth and a solid outlook for next year, although the pain is being felt at the margin level.

  • March 30, 2009

    UK broadband and telephony market Q4 2008

    UK broadband subscriber growth continued to decline in Q4 2008 year-on-year. We expect declining growth throughout 2009, with the growth rate remaining positive, but in single figures.

  • Carphone Warehouse
    Carphone Warehouse
    January 16, 2009

    Carphone Warehouse trading update: weathering the storm

    Carphone Warehouse's distribution business felt the recessionary chill for the first time in the December quarter, but its like-for-like organic growth of -1% was still far better than other consumer electronics retailers have fared. The market outlook is unfortunately still worsening. While we still expect Carphone Warehouse to outperform its competitors, its results are likely to get worse before they get better. In fixed line, net broadband additions were reasonable at TalkTalk but negative again at AOL. We are sceptical of the prospects for subscriber growth at AOL, and earlier guidance of 200-250k broadband net adds for the year to March now looks unlikely to be met.