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Carphone boss admits tough times and possible TalkTalk demerger

Carphone Warehouse recently released first half results and CEO Charles Dunstone has warned of tough times ahead.

The company stated that headline post-tax profits were £39 million, but revenues are down 2 percent, and the company confirmed it is to conduct a formal review that could see a spin-off of its TalkTalk arm, which offers cheap broadband and phone bundles.  Charles Dunstone says he would remain closely involved with both companies however.

The company said the broadband base is growing steadily in a slowing market.  The AOL broadband migration is complete but the company lost 93,000 customers from that base, which it says were not paying or were not connected to its broadband network.

Best Buy Europe (which it now calls its distribution business) revenues were up on last year, and Carphone is now looking for growth in this part of its business.  The company has a 50 percent stake in the business with Best Buy.

“The next 12 months are likely to represent the most challenging economic climate we have ever operated in. With little debt and £900m of facilities, the Group is very well positioned to withstand the financial turmoil,” said CEO Charles Dunstone.

“We believe our review of the Group structure will result in shareholders being able to assess more clearly the value of the Group’s assets.  My focus will be on supporting our customers, protecting our employees and using our resources to position ourselves in the best way for the recovery when it finally comes.”