Carphone Warehouse 2003 Annual Report Download

Download and view the complete annual report

Please find the complete 2003 Carphone Warehouse annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 44

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44

The Carphone Warehouse Group PLC
Annual Report 2003

Table of contents

  • Page 1
    The Carphone Warehouse Group PLC Annual Report 2003

  • Page 2
    ... 39 Five Year Record 40 Notice of Annual General Meeting The Carphone Warehouse is Europe's leading independent retailer of mobile phones and services, with over 1,100 stores in 11 countries Stores by country Ireland United Kingdom Belgium France Switzerland Spain Portugal Netherlands Germany Czech...

  • Page 3
    ... third generation network operational in the UK gives some indication of the range of new services that is likely to be widely available in the coming years. The Carphone Warehouse Group PLC Annual Report 2003 Headline profit before tax (£m) 30.6 49.6 46.8 57.0 Headline earnings per share (pence...

  • Page 4
    ...Executive's Review Through our focus on independence, choice and service we have achieved over 20% compound annual growth in subscription connections over the last three years. The Carphone Warehouse Group PLC Annual Report 2003 The Group has made significant progress over the last twelve months...

  • Page 5
    ... year, we intend to build on our position as the leading independent retailer of mobile phones and services in Europe and deliver further profitable growth through our existing business and new opportunities. The Carphone Warehouse Group PLC Annual Report 2003 Charles Dunstone, Chief Executive...

  • Page 6
    ...businesses. The Carphone Warehouse Group PLC Annual Report 2003 The Group achieved a strong result for the year despite a handset market that recorded a second consecutive year of declines. Revenues, profits and earnings per share all grew significantly and the Group generated encouraging levels...

  • Page 7
    ... strong growth supported by a recovering market and the aggressive pursuit of market share by our network partners. Spain is a key growth market for the Group and will be the focus of a significant store opening programme in the coming year. The Carphone Warehouse Group PLC Annual Report 2003 We...

  • Page 8
    ... 6 Operating & Financial Review continued We exchanged contracts on HTG, a German service provision business, in June 2003. We are confident that our combined German operations will represent a stable and profitable platform for future growth. The Carphone Warehouse Group PLC Annual Report 2003...

  • Page 9
    ... impressive rates of growth it had demonstrated prior to acquisition, with significant new business wins and growth in the number of minutes switched through the Opal network. The Carphone Warehouse Group PLC Annual Report 2003 Turnover Mobile Fixed Contribution Mobile Fixed Support costs EBITDA...

  • Page 10
    ..., the Group exchanged contracts with Orange Holdings Limited to acquire Hutchison Telecommunications GmbH, a mobile service provision business in Germany, for a net cash consideration of £32.4m. The Group has also closed a further 10 retail stores and commenced the closure of its support centre in...

  • Page 11
    ...(2002: 14.1%). The Carphone Warehouse Group PLC Annual Report 2003 Operating cash inï¬,ows Tax and interest Capex (ex-new stores) Free cash ï¬,ow New store capex London offices Acquisitions Net cash inï¬,ow (outï¬,ow) Opening net funds Shares and foreign exchange Closing net funds 77.7 (1.5) (25...

  • Page 12
    ... to people living with cancer. Local charities The Group regularly supports local charities through donations of funds, mobile phones and employee time. Store employees and direct conversations initiate the majority of these donations. The Group is a member of the Park Royal Partnership and as...

  • Page 13
    ...To give customers direct access to this information, the Group lists all these figures in its UK monthly buyers' guide. Mobile phones and driving concerns The increasing use of handheld mobile phones whilst driving is a very real concern in today's society and drivers are reportedly four times more...

  • Page 14
    ...is also responsible for new business development and strategic initiatives. He is a Non-Executive Director of HBOS PLC and The Daily Mail and General Trust PLC. He is also Chairman of The Prince's Trust Trading Board and a member of its Council. David Ross ACA Chief Operating Officer Age 37. He will...

  • Page 15
    ...W Dunstone D P J Ross R W Taylor J H Dale G Roux de Bezieux Non-Executive Directors H R Snook Sir Brian Pitman D Wilson A H Martin J Gildersleeve M Dawes Company Secretary T S Morris The Carphone Warehouse Group PLC Annual Report 2003 Bankers HSBC Bank PLC Poultry London EC2P 2BX Corporate Brokers...

  • Page 16
    ... at the end of such period. The Board meets at least ten times a year, receiving key briefing papers before each meeting. The Board is responsible to the shareholders for the proper management of the Company and its subsidiaries. It sets out and monitors the Group's strategy, reviews its trading...

  • Page 17
    ... period under review and up to the date of approval of the Annual Report and Accounts. This process is reviewed annually by the Board. The process used by the Board through the Audit Committee and risk management team includes the following: • Review of the external and internal audit work plans...

  • Page 18
    ...continued long term development of the business. The Committee makes its recommendations by taking into account: • The experience of Executive Directors and other senior management; The Carphone Warehouse Group PLC Annual Report 2003 16 • The Group's competitiveness in the market place through...

  • Page 19
    ... and David Ross each waived emoluments of £50,000 during the period ended 29 March 2003. The original level salary of £300,000 per annum was reinstated with effect from the beginning of April 2003. Includes a salary supplement of £15,000 in lieu of pension. The Carphone Warehouse Group PLC Annual...

  • Page 20
    ... by Executive Directors in the period ended 29 March 2003. A UK savings related share option scheme is open to all eligible employees including Executive Directors in the UK. No Executive Director participates in the scheme. Share options* Details of Directors' interests in options to buy shares in...

  • Page 21
    ... group comprising a group of UK general retailers and European telecoms companies for the period 3 June 2002 to 29 March 2003. A three month rolling average has been applied. 140 120 TSR (rebased to 100 at 3 June 2002) The Carphone Warehouse Group PLC Annual Report 2003 100 80 60 40 20 Carphone...

  • Page 22
    ...Touche LLP at the appropriate time. By order of the Board, The Carphone Warehouse Group PLC North Acton Business Park Wales Farm Road London W3 6RS 20 The Carphone Warehouse Group PLC Annual Report 2003 Results The profit or loss before tax for the financial period increased from a loss of £23...

  • Page 23
    ... Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the Board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group's corporate...

  • Page 24
    ...nancial period Earnings (loss) per share Basic Diluted Headline earnings per share Basic Diluted 9 24 The Carphone Warehouse Group PLC Annual Report 2003 (8,729) 35,871 10 10 5.25p 5.23p 2.60p 2.59p (3.39)p (3.39)p 10 10 5.25p 5.23p 4.41p 4.39p The accompanying notes are an integral part...

  • Page 25
    ...falling due after more than one year Provisions for liabilities and charges Net assets Capital and reserves Called-up share capital Share premium Capital redemption reserve Profit and loss account Equity shareholders...,483) 408,027 The Carphone Warehouse Group PLC Annual Report 2003 15 16 17 56,351...

  • Page 26
    ...,011 384,151 The Carphone Warehouse Group PLC Annual Report 2003 The accompanying notes are an integral part of this balance sheet. The financial statements on pages 22 to 38 were approved by the Board on 2 June 2003 and signed on its behalf by: C W Dunstone Chief Executive Officer R W Taylor...

  • Page 27
    ...,623) 25 Reconciliation of Net Cash Inflow from Operating Activities to Operating Profit The Carphone Warehouse Group PLC Annual Report 2003 2003 £'000 2002 £'000 Operating profit excluding exceptional items Operating exceptional items Operating profit Depreciation of tangible fixed assets...

  • Page 28
    ... the relevant customers. The Carphone Warehouse Group PLC Annual Report 2003 g) Leases Rental payments under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease. h) Taxation Current tax, including UK corporation tax and overseas tax, is...

  • Page 29
    ...geographical location are analysed by origin as follows: 2003 Turnover £'000 Profit before tax £'000 Net assets £'000 Turnover £'000 Profit (loss) before tax £'000 2002 Net assets £'000 The Carphone Warehouse Group PLC Annual Report 2003 United Kingdom Rest of Europe Amortisation Operating...

  • Page 30
    ...Employee costs consist of: 2003 £'000 2002 £'000 Wages and salaries Social security costs Other pension costs The Carphone Warehouse Group PLC Annual Report 2003 144,568 24,691 947 170,206 114,125 21,395 1,632 137,152 The average monthly number of people employed by the Group during the period...

  • Page 31
    ... Decrease in charge to profit and loss account - - - (3,290) (855) (4,145) - - - - (653) (653) 7 Net interest (payable) receivable 2003 £'000 2002 £'000 29 6,511 (7,191) (315) (7,506) (995) 5,711 (4,975) (394) (5,369) 342 The Carphone Warehouse Group PLC Annual Report 2003 Interest...

  • Page 32
    ... number of shares: For basic earnings per share Dilutive effect of share options For diluted earnings per share Basic pence per share 2003 2002 850,273 2,166 852,439 833,382 3,759 837,141 Diluted pence per share 2003 2002 Earnings (loss) per share The Carphone Warehouse Group PLC Annual Report...

  • Page 33
    ...Telecoms Insurance Services SA MViva Limited ISe-Net Solutions Limited The Phone House Holdings (UK) Limited* Wireless Internet Portfolio BV The Phone House BV Carphone Warehouse Investments SA* *held directly by the Company. England England Belgium Czech Republic France Germany Ireland Netherlands...

  • Page 34
    ...645 The Carphone Warehouse Group PLC Annual Report 2003 Net cash outï¬,ows in respect of the acquisition comprised: Gross cash consideration Overdrafts acquired 32,557 5,335 37,892 Accounting policy alignments relate to the recognition of deferred tax assets. Other fair value adjustments relate to...

  • Page 35
    ... 336,483 .33 The Carphone Warehouse Group PLC Annual Report 2003 17 Short-term investments Group 2003 £'000 2002 £'000 Short-term investments 26,276 67,637 Short-term investments include listed investments with a cost of £11.1m (2002 - £27.4m). The market value of these investments at 29...

  • Page 36
    ... of European currencies. 34 The Group does not trade in financial assets and liabilities. 2003 Sterling £m Euro £m Other £m Total £m Sterling £m Euro £m Other £m 2002 Total £m Financial assets By instrument Cash Short-term investments The Carphone Warehouse Group PLC Annual Report 2003...

  • Page 37
    ... within one year have been included at carrying value; other fair values have been arrived at by discounting future cashï¬,ows, assuming no early redemption, or marking deals to year-end market or rates as appropriate to the instrument. (vi) Gains and losses on hedges At 29 March 2003, the Group had...

  • Page 38
    ...scheme permits the grant to employees of options linked to a bank save-as-you-earn contract for a term of three or five years with contributions from employees of an amount between £5 and £250 per month. Options may be exercised at the end of the three or five year period at a subscription price...

  • Page 39
    ... the period the Group acquired the remaining 15% of MViva Limited, a company in which it already had an 85% stake. The Carphone Warehouse Group PLC Annual Report 2003 Equity interests £'000 772 (772) - 27 Analysis of cash ï¬,ows 2003 £'000 2002 £'000 a. Returns on investments and servicing of...

  • Page 40
    ...result of this review the Directors believe that no unprovided liability is likely. Germany On 2 June 2003, the Group exchanged contracts with Orange Holdings Limited to acquire 100% of the issued share capital of Hutchison Telecommunications GmbH, a mobile service provision business incorporated in...

  • Page 41
    ....7 39 459.5 - 459.5 5.3p 5.2p 407.2 0.8 408.0 4.4p 4.4p 432.8 1.7 434.5 5.0p 4.9p 43.6 (0.8) 42.8 3.7p 3.5p 28.4 (0.7) 27.7 2.1p 2.1p * Results and Earnings per share are stated before exceptional items and amortisation of goodwill. The Carphone Warehouse Group PLC Annual Report 2003

  • Page 42
    ... of the middle market quotations of the Company's ordinary shares derived from the daily official list of the London Stock Exchange Plc for the five business days immediately before the day on which the purchase is made; 10.4 This authority shall expire on the date falling 15 months after the...

  • Page 43
    ... loss of office. The Group may terminate both David Ross's and Geoffroy Roux de Bezieux's service agreements on 12 months notice. Auditors Resolution 7 The Company is required to appoint auditors at each general meeting at which accounts are presented, to hold office until the end of the next such...

  • Page 44
    The Carphone Warehouse Group PLC North Acton Business Park Wales Farm Road London W3 6RS Tel +44 (0)20 8896 5000 Fax +44 (0)20 8753 8009 Email [email protected] Registered no. 3253714 carphonewarehouse.com