Carphone Warehouse 2001 Annual Report Download

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The Carphone Warehouse Group PLC
Annual Report 2001
Carphone Warehouse
Number
choice for mobile communications

Table of contents

  • Page 1
    Carphone Warehouse Number choice for mobile communications The Carphone Warehouse Group PLC Annual Report 2001

  • Page 2
    ... account Consolidated statement of total recognised gains and losses Consolidated balance sheet Company balance sheet Consolidated cash flow statement Notes to the financial statements Four year record Notice of Annual General Meeting mobile in all markets Financial highlights Turnover Gross profit...

  • Page 3
    ...pre MViva) • Significant market share of high value subscription customers • Continued investment in pan-European distribution • Facilities management customer base of 214,000 • 220,000 registered MViva customers • Full spectrum of mobile communication services now established Connections...

  • Page 4
    ...business including Retail, Online, Insurance and Wholesale have enjoyed considerable growth and success. Highlights include the integration of the Tandy portfolio within the UK business, the ongoing development of market leading positions in France, Spain, Belgium, The Netherlands, Ireland, Portugal...

  • Page 5
    ...The Carphone Warehouse is uniquely able to offer customers the complete spectrum of mobile communications, from point of sale, after-sales support and billing processes to providing tailored content, new technologies and additional innovative services. The Carphone Warehouse Group PLC Annual Report...

  • Page 6
    ... market share, expanding our store portfolio, growing our online sales and attracting high value customers. Sweden 52 Stores by country Ireland 24 UK 411 Holland 77 Germany 95 Poland 2 Belgium 46 Czech Republic 21 France 140 Hungary 11 Switzerland 16 Portugal 33 Spain 113 Italy 7 one stop shop

  • Page 7
    ...The Phone House brand and customer proposition, identifying key retail locations and continuing to build our relationships with local network operators and manufacturers. In certain smaller non-key markets, where the prospects of achieving acceptable financial returns are not evident, the Group has...

  • Page 8
    ... based on generating additional revenue streams beyond the point of sale. This has been achieved through building our ongoing airtime revenue and facilities management services. 158,656 78,477 56,587 8,550 Mar June Sep Dec Mar 00 00 00 00 01 6 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 9
    The Carphone Warehouse Group PLC Annual Report 2001 7

  • Page 10
    Review of operations continued Wireless Data Services Data services on the move MViva continues to advance having developed functional technology in five European markets, securing joint homepage arrangements with key European networks and growing its base to over 220,000 registered customers.

  • Page 11
    ... is accessible via both mobile and fixed line devices, including mobile phones, PDAs, personal computers and interactive television. Customers can subscribe to the portal through the Carphone Warehouse retail network, where sales consultants can demonstrate and customise the service at the point of...

  • Page 12
    ... the Group regularly supports local charities through donation of funds, mobile phones and employee time. The majority of these donations are initiated by store employees and are as a direct result of conversations with customers. Reflecting the Group's belief in corporate citizenship, the Board has...

  • Page 13
    ... readily available at mobile phone outlets." Diversity As a well-known high street retailer, offering a mass-market consumer product, The Carphone Warehouse has a commitment to recruiting a diverse workforce as well as ensuring that its products, stores and information are presented in a way that...

  • Page 14
    ... high proportion of subscription phones compared to the market and the successful conversion of 158 Tandy stores by 31 March 2001. The total number of Carphone Warehouse stores in the UK at 31 March 2001 was 411 compared to 281 at 25 March 2000. Our European Retail sales growth was generated through...

  • Page 15
    ... and interest rate management is concentrated on maximisation of in-hand funds through good day to day cash management and maximisation of our return on such monies, ensuring at all times that investments are within acceptable risk parameters. The Carphone Warehouse Group PLC Annual Report 2001 13

  • Page 16
    ... Executive Officer. Together with David Ross he is responsible for new business development and strategic initiatives. Non-Executive Director of The Halifax Group PLC, he is also Chairman of the Prince's Trust Trading Board and a member of its Council. David Ross ACA Age 35. Chief Operating Officer...

  • Page 17
    ... Dale Chairman - Carphone Warehouse Insurance Guy Johnson Group Purchasing and Logistics Director Adrian Martin Non-Executive Director Roger Taylor David Ross Chief Operating Officer Chief Financial Officer Non-Executive Directors Sir Brian Pitman Age 69. Joined the Board on 17 January 2001...

  • Page 18
    ... North Acton Business Park Wales Farm Road London W3 6RS Registered number: 3253714 Financial contents 17 19 22 24 25 26 26 27 28 29 30 51 52 Corporate governance Remuneration report Directors' report Statement of Directors' responsibilities Auditors' report Consolidated profit and loss account...

  • Page 19
    ... the Directors issues concerning the Group's operations and performance. Investor information including financial results, press releases and management presentations are available on The Carphone Warehouse website, www.carphonewarehouse.com. The Carphone Warehouse Group PLC Annual Report 2001 17

  • Page 20
    ... by the Group which has been in place for the 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...

  • Page 21
    ... his work with the Group on public relations, corporate citizenship and charitable activities. The Board considers that his assistance with such matters does not interfere with the exercise of his independent judgement as a Non-Executive Director. The Carphone Warehouse Group PLC Annual Report 2001...

  • Page 22
    ...to his pending appointment to the Board and his additional responsibilities for the Group's Southern European operations. The market price of ordinary shares on 31 March 2001 was £1.25 and the range during the period was from £1.20 to £2.23. 20 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 23
    ...market rate of £900,000, £700,000 and £400,000 respectively. During the period ended 31 March 2001 and prior to the Group's flotation the above loans and all previous loans to the Directors, in aggregate £5,059,000, were forgiven by the Trust. The Carphone Warehouse Group PLC Annual Report 2001...

  • Page 24
    ... 2001 The Directors have pleasure in presenting the Annual Report and financial statements of The Carphone Warehouse Group PLC for the 53 weeks ended 31 March 2001. Principal activities The principal activity of the Group continues to be the provision of mobile communication products and services...

  • Page 25
    ... The Directors will place a resolution before the Annual General Meeting to re-appoint Arthur Andersen as auditors of the Company for the ensuing period. By order of the Board, The Carphone Warehouse Group PLC North Acton Business Park Wales Farm Road London W3 6RS T S Morris Company Secretary...

  • Page 26
    ... that the financial statements comply with the Companies Act 1985. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. 24 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 27
    ... Group's profit and cash flows for the financial period then ended and have been properly prepared in accordance with the Companies Act 1985. Arthur Andersen Chartered Accountants and Registered Auditors 1 Surrey Street London WC2R 2PS 29 May 2001 The Carphone Warehouse Group PLC Annual Report 2001...

  • Page 28
    ...profit and loss account For the 53 weeks ended 31 March 2001 Notes 53 weeks ended 31 March 2001 £'000 52 weeks ended 25 March 2000 £'000 Turnover Existing operations Acquisitions Cost of sales Gross profit Operating expenses excluding amortisation and depreciation EBITDA pre-MViva MViva losses...

  • Page 29
    ...financial statements on pages 26 to 51 were approved by the Board on 29 May 2001 and signed on its behalf by: C W Dunstone Chairman R W Taylor Chief Financial Officer The accompanying notes are an integral part of this consolidated balance sheet. The Carphone Warehouse Group PLC Annual Report 2001...

  • Page 30
    ...084 The financial statements on pages 26 to 51 were approved by the Board on 29 May 2001 and signed on its behalf by: C W Dunstone Chairman R W Taylor Chief Financial Officer The accompanying notes are an integral part of this balance sheet. 28 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 31
    ...March 2001 Notes 53 weeks ended 31 March 2001 £'000 52 weeks ended 25 March 2000 £'000 Net cash inflow from operating activities Net cash inflow (outflow) from returns on investments and servicing of finance Net cash outflow from taxation Net cash outflow from capital expenditure and financial...

  • Page 32
    ... portal business and data services. Insurance premium income Insurance premium income is credited to the profit and loss account over the period of the underlying policies. Basis of consolidation The consolidated financial statements incorporate the results of The Carphone Warehouse Group PLC...

  • Page 33
    ...to produce a constant rate of charge on the outstanding balance in each period. Rental payments under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease. Taxation Current tax, including UK corporation tax and overseas tax, is provided at...

  • Page 34
    ... to determine the operating assets for acquisitions made during the period at 31 March 2001 as, subsequent to the acquisitions, these assets were incorporated into the operations of other Group undertakings for financial reporting purposes. 32 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 35
    ... employed by the Group during the period was: 2001 Number 2000 Number Administration Selling and distribution 979 4,466 5,445 721 3,035 3,756 Details of Directors' remuneration are provided in pages 20 to 21 of the Remuneration report. The Carphone Warehouse Group PLC Annual Report 2001 33

  • Page 36
    ...£16.5m. The loss in the period ended 25 March 2000 resulted primarily from the sale of Tecno Holdings Limited. b) Profit and loss on disposal of fixed assets (i) On 30 March 2001, the Group disposed of the individual investments in its Wireless Internet Portfolio into an independently managed fund...

  • Page 37
    ... in note 19. Adjustments in respect of prior periods include the tax effect of the exceptional costs of a fundamental reorganisation provided in the period ended 25 March 2000 (see note 6c), for which no deferred tax asset was recognised. The Carphone Warehouse Group PLC Annual Report 2001 35

  • Page 38
    ...Earnings per share The calculations of earnings per share are based on the following profits and numbers of shares: Basic and diluted 2001 £'000 2000 £'000 Profit for the financial period Amortisation of goodwill Earnings before amortisation of goodwill Exceptional items (net of tax and minority...

  • Page 39
    ...managed fund. Although the consideration for the transfer was equal to the aggregate cost of the individual investments, in accordance with the Group's accounting policy, losses of £2.5m have been recognised in respect of the disposal of certain investments. The Carphone Warehouse Group PLC Annual...

  • Page 40
    ...Services Limited The Wireless Warehouse SA* The Phone House Holdings (UK) Limited* The Carphone Warehouse Insurance Limited The Phone House Insurance Limited Wireless Internet Portfolio BV The Phone House BV The Phone House Insurance Brokers SA *held directly by the Company. England England Belgium...

  • Page 41
    ... of lease contracts it is not applicable to disclose profits and losses for this Company for the period before or after acquisition. c. UK On 13 June 2000, the Group acquired the trade, assets and certain liabilities of Cellcom Limited, a telecoms services business registered in England, for a gross...

  • Page 42
    ... fixed assets. Road Phone Telecom NV earned a profit after taxation of £602,000 in the 15 month period ended 31 March 2001 (year ended 31 December 1999 - £518,000), of which £302,000 arose in the period from 1 January 2000 to 31 August 2000. 40 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 43
    ... acquisitions include adjustments of £1.2m made in relation to acquisitions in the period ended 25 March 2000. Adjustments made in respect of acquisitions in both the current and prior period arose principally from the revaluation of fixed assets. The Carphone Warehouse Group PLC Annual Report 2001...

  • Page 44
    ...000 2000 £'000 Short-term investments 46,374 11,144 Included within short-term investments are listed investments with a cost of £46.1m (2000 - £11.1m). The market value of these investments at 31 March 2001 is £47.3m (2000 - £13.5m). 42 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 45
    16 Creditors: amounts falling due within one year Group 2001 £'000 2000 £'000 Company 2001 £'000 2000 £'000 Obligations under finance leases and hire purchase contracts Loans and overdrafts Trade creditors Corporation tax Other taxes and social security costs Other creditors Accruals and ...

  • Page 46
    ... on the instrument concerned and purchase date. Fixed financial liabilities, all of which are denominated in Euro, bear weighted average interest rates of 4.79% (2000 - 4.78%) for weighted average periods of 1.4 years (2000 - 1.8 years). 44 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 47
    ... using foreign exchange and interest rate swaps. Net losses of £0.1m were unrecognised at 25 March 2000 and were not recognised during the period to 31 March 2001. These losses are expected to be recognised in the period ended 30 March 2002. The Carphone Warehouse Group PLC Annual Report 2001 45

  • Page 48
    ... Provisions against sales Insurance funds and reserves £'000 Restructuring provisions £'000 Deferred tax £'000 Other £'000 Total £'000 Group At 25 March 2000 Charge to profit and loss account Acquisition of subsidiary undertakings Utilised in period Exchange adjustment At 31 March 2001 £'000...

  • Page 49
    .... The Carphone Warehouse Group ShareSave Scheme, a 'Save As You Earn' scheme, was launched in April 2001. UK employees can enter into this Inland Revenue approved savings scheme for a period of three or five years, whereby shares may be acquired. The option price is the average market price over the...

  • Page 50
    ... Profit and loss account £'000 Share premium account £'000 Capital redemption reserve £'000 Total £'000 Group At 25 March 2000 Profit for the financial period Currency translation Issue of share capital* Other movements At 31 March 2001 Company At 25 March 2000 Profit for the financial period...

  • Page 51
    ... rental payments Net cash inflow (outflow) from returns on investments and servicing of finance b. Taxation UK Corporation tax paid Net cash outflow from taxation c. Capital expenditure and financial investment Payments to acquire fixed asset investments Payments to acquire tangible fixed assets Net...

  • Page 52
    ... pensioners with preserved benefits of 8% per annum. The winding up of the scheme commenced on 5 April 2000. The pension charge, calculated on the same assumptions as used for the actuarial valuation, amounts to £75,000 (2000 - £277,000). 50 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 53
    ... of the Group to the London Stock Exchange on 14 July 2001. Clareville Capital During the period ended 31 March 2001 the Group realised funds on an arm's length basis of £5.3m from an equity fund managed by Clareville Capital Limited, a company in which at that time C W Dunstone and D P J Ross had...

  • Page 54
    ... or other arrangements as if the power conferred hereby had not expired. By order of the Board T.S. Morris Secretary 29 May 2001 Registered Office The Carphone Warehouse Group PLC North Acton Business Park Wales Farm Road London W3 6RS 52 The Carphone Warehouse Group PLC Annual Report 2001

  • Page 55
    ... Jarvis staff. 11. Medical care If you need medical attention while attending the Annual General Meeting please contact a member of the Jarvis staff who will obtain medical assistance. 12. Smoking Smoking will not be permitted in the auditorium. The Carphone Warehouse Group PLC Annual Report 2001 53

  • Page 56
    The Carphone Warehouse Group PLC www.carphonewarehouse.com North Acton Business Park, Wales Farm Road, London W3 6RS Tel +44 (0)20 8896 5000 Fax +44 (0)20 8896 5009 Registered no. 3253714