Carphone Warehouse 2014 Annual Report Download - page 6

Carphone Warehouse Group plc
Annual Report 2014
04
STRATEGIC REPORT
 sees the th anniversary since Carphone Warehouse first
opened for business in . Companies have to constantly adapt
and change, and our history over the last  years has been an
incredible journey of identifying the challenges and opportunities
inour fast-changing marketplace, navigating the former and taking
advantage of the latter. I am immensely proud of our track record
ofdoing this. It has kept our business moving forward, thriving
andgenerating great returns for our employees, trading partners,
customers and shareholders. All this is particularly relevant as we
plan taking the next step in our journey with the proposed merger
ofequals with Dixons Retail plc.
Financially, Carphone Warehouse has had a strong year. We have
delivered on our guidance, increasing pro forma Headline EBIT from
£m to £m. Improved pro forma EBIT, together with the benefits
of consolidating % of CPW Europe, have resulted in a % increase
in our Headline EPS from .p to .p. Given our overall performance,
financial strength and prospects, we are delighted to recommend
afinal dividend of .p per share, up % on the final dividend for
. This is expected to be paid on  August  to shareholders
onthe record as of  July  and will bring the full year dividend
to .p per share, up % on .
Strategically and operationally, we have also moved our business on.
In our UK retail operations, we have significantly enhanced our customer
service offering through introducing Pin Point, a tablet-based sales
tool. This has helped drive customer satisfaction to record levels.
We are also riding the dynamism of G. The speed, range of new
devices, increased data usage and new G tariffs have all increased
our appeal to customers, building on our long-standing reputation
for impartial advice and value.
In the tough French marketplace, Virgin Mobile France has again
proved resilient, retaining value for its shareholders by focusing
onmaintaining its contract customer base and migrating this
ontoaFull MVNO platform. For some while, we have signalled that,
potentially, Virgin Mobile France could be for sale and, in May
thisyear, together with its other shareholders, we announced an
exclusivity agreement for its proposed sale to Numericable Group.
We have made some key strategic developments in our Connected
World Services business, including our preferred-partner agreement
with Samsung to roll out and manage its stores across Europe.
Connected World Services is our BB business, in effect exporting
our systems and expertise to other businesses wanting to build value
centred around connected devices and services. We see considerable
potential, over time, for Connected World Services to extend Carphone
Warehouse into a global organisation, making low demands on capital
expenditure and management. It is also at the heart of the rationale
for our proposed merger with Dixons Retail plc.
While our marketplace and our business have seen incredible change
over the past  years, at its core, Carphone Warehouse is still doing
what it originally set out to do – to provide simple, independent, impartial
advice over a bewildering variety of devices, networks andtariffs,
and in the process, to simplify complex technology and deliver its
potential to our customers. As I look ahead, this will continue to be
the case with our proposed merger with Dixons Retail plc. We know
the value that can be created by placing Carphone Warehouse stores
within their outlets. And we are proposing the merger just at the time
that we are seeing domestic devices and services of all kinds increasingly
becoming connected. We have a deep respect for each other; we share
a commitment tocustomer service; and we wish to create a new
retailer for a newdigital age. Ihope to be able to report at our annual
general meeting that you have separately approved the merger and
Iwillfeelprivileged tobeleading the new combined group.
Sir Charles Dunstone Chairman
IN SUMMARY
+Proposed all-share merger with Dixons Retail plc
+Strong set of results from CPW, despite challenging
conditions in parts of Mainland Europe
+Key strategic developments with Connected
WorldServices
+Entered exclusivity agreement for proposed
saleofVirgin Mobile France
+Recommended final dividend of .p per share
tobepaid on  August 
COMPANIES HAVE TO CONSTANTLY
ADAPT AND CHANGE
IN ORDER TO GROW
Sir Charles Dunstone Chairman
Chairman’s statement