Carphone Warehouse reported results for the fiscal first half to end-September, saying its demerger is well on track for March 2010 and that figures came ahead of expectations due to strong performances at both TalkTalk and Best Buy Europe.
TalkTalk will see its customer base rise 48 percent to 4.12 million customers with the acquisition of Tiscali UK. Excluding the Tiscali buy, TalkTalk’s broadband base advanced 5 percent year-on-year to 2.93 million. Revenues rose to GBP 789 million from 697 million the year before.
Total broadband and non-broadband revenues including Tiscali were up 15 percent to GBP 631 million from 549 million the year earlier. Revenues excluding Tiscali fell 3 percent to GBP 534 million, primarily due to the expected continued decline in the non-broadband customer base, partially offset by the growing broadband base. TalkTalk added 62,000 net new broadband subscribers in the period to September. Excluding Tiscali, TalkTalk Group added 124,000 net new broadband customers.
Blended broadband ARPU including Tiscali was 4 percent higher year-on-year at GBP 23.5. ARPU excluding Tiscali was at GBP 23.9, an increase of 6 percent year-on-year. This was driven primarily by the successful move towards TalkTalk bundled packages of line rental, voice and broadband. The non-broadband base, comprising voice only and internet dial-up customers, was at 1.20 million. The underlying TalkTalk base excluding Tiscali declined 24 percent, in line with expectations, to 1.00 million, compared to a 35 percent decline in the previous year. The improvement reflects reduced churn on the voice bases, higher levels of gross additions in the period and the reducing mix of narrowband customers in the base.
Non-broadband ARPU decreased 4 percent to GBP 19.3 reflecting lower ARPU on Tiscali customers. Excluding Tiscali, APRU was GBP 19.9, a decrease of 1 percent year-on-year. TalkTalk had 2.95 customers on its own unbundled network. Excluding Tiscali customers, numbers increased 14.5 percent to 2.32 million. Around 51 percent of the Tiscali broadband customer base was unbundled. Business revenues rose 7 percent to GBP 158 million. Underlying revenue, excluding Tiscali, increased by GBP 2 million, primarily due to the success of Opal’s new broadband product offering.
Operating free cash flow for the first half was at GBP 75 million, compared to an outflow of 8 million the year before. TalkTalk announced an additional GBP 10 million in capital expenditure to expand its footprint of unbundled exchanges up to 2000 exchanges, but still expects free cash flow for March 2010 at GBP 120 million.
At Best Buy Europe, operating free cash flow for the period was at GBP 47 million against 193 million the year earlier. The division maintained its operating free cash flow guidance for March 2010 at GBP 50 million, after all Big Box investments. Best Buy Europe posted revenues at GBP 1.674 billion from 1.617 billion the year before, with mobile connections up 2 percent year-on-year to 5.9 million. It now has 17 'Wireless World' stores.