Carphone Warehouse 2006 Annual Report Download - page 13

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CONTINUED STRONG LFL
GROSS PROFIT
PERFORMANCE (%)
’06’05’04’03
4.8
14.2
5.0
9.0
Operational Performance
Distribution Division
The Distribution division comprises our Retail
operations and all directly-related business
streams. The key operating assets of the division
are our 1,778 stores across 10 European countries
and our Retail and Online brands. Distribution
revenues grew by 22.0% in the year to £1,753.5m,
and the division generated Headline EBIT of £115.5m,
a rise of 38.7% on the prior year. Growth was strong
across all business units, with Online growth continuing
to be exceptional, supported by the acquisition of One
Stop Phone Shop in March 2005. From the year to
March 2007, we are combining our Retail and Online
business units for reporting purposes.
Retail and Online
The Group achieved 8.19m connections during the
year, representing year-on-year growth of 24.1%.
However, last year was a 53 week accounting period
and on an equivalent 52 week basis, connections
were up 26.0%.
In subscription connections, the key driver for our
Distribution business, we achieved 52 week growth
of 23.6% to 3.42m. Market conditions continued to
be attractive, with further growth in the European
handset market driven by good customer offers
and the strong handset pipeline. In addition, we
again enjoyed a year of improving execution, allying
a focus on exclusive product with an aggressive
pricing strategy. We have now achieved compound
annual growth of 17.1% in subscription connections
over the last five years.
Our pre-pay business had a very good year, with
52 week connections up 31.7% to 4.25m. The
strength of the overall pre-pay market continued
unabated, and we successfully invested in pricing
to take market share from generalist retailers. Our
SIM-free sales were marginally up year-on-year
at 0.52m, reflecting the relative strength of the
pre-pay market.
www.cpwplc.com 9
Operating and Financial Performance
Operating and Financial
Performance Review
Growth was strong across all
business units, with Online growth
continuing to be exceptional
2006 2005
Headline Financials £m £m
Revenue 1,753.5 1,436.9
Retail 1,375.5 1,160.2
Online 203.5 128.2
Insurance 116.1 102.0
Ongoing 58.4 46.5
Contribution 246.1 190.1
Retail 127.5 100.9
Online 14.7 7.7
Insurance 45.5 35.0
Ongoing 58.4 46.5
Support costs (84.1) (71.5)
EBITDA 162.0 118.6
Depreciation and amortisation (46.5) (35.4)
EBIT 115.5 83.2
EBIT % 6.6% 5.8%