Carphone Warehouse 2003 Annual Report Download - page 3

30.6 49.6 46.8 57.0
02 030100
Headline profit
before tax
(£m)
3.7 5.0 4.4 5.3
02 030100
Headline earnings
per share
(pence)
02 030100
824 1,059 1,104 1,140
Stores
(number)
3,756 5,445 6,992 8,133
02 030100
Employees
(number)
The Group has successfully continued to pursue
its strategy of developing its recurring revenue
streams, both in the existing mobile business and,
with the acquisition of Opal Telecom, through our
move into fixed line services. We are delighted to be
recommending a maiden dividend, reflecting strong
cash generation and confidence in our prospects.
I am pleased to report on a successful year for The
Carphone Warehouse. In the year to March 2003, we
achieved organic growth in turnover of 18.4% in our core
Distribution and Telecoms Services businesses. Profit
before tax, exceptional items and goodwill increased by
21.8% to £57.0m, and earnings per share on the same
basis increased by 19.0% to 5.25p.
The Group continued to gain market share in the year
as a result of our superior retail and service offering, our
independence, and the withdrawal of further capacity from the
retail market. After nearly two years of deteriorating handset
sales, most of the markets in which we operate have returned
to growth, giving improving visibility for the current year.
In November 2002 we acquired Opal Telecom plc, a provider
of value-added fixed line telecoms services to business
customers. The core Opal business has continued to deliver
strong and profitable growth since it became part of the
Group, and in February we launched our own residential fixed
line service, talktalk™, using the Opal network and leveraging
our retail asset. We have been very pleased with the initial
levels of customer interest.
We continue to pursue our strategy of generating recurring
revenues and profits from our customers beyond the point
of sale as our business becomes more closely aligned with
that of our network partners. The acquisition of Opal has
further developed these revenue streams so that in the
forthcoming year we anticipate that over 50% of Group
contribution will be generated beyond the point of sale.
The Group generated an encouraging level of free cash
flow, maintaining a strong balance sheet. Our confidence in
the future has prompted us to propose a maiden dividend
of 1p per share, which we aim to increase in line with
earnings growth in the medium term.
We are quietly optimistic about the outlook for this year.
The product pipeline is strong and customers continue to be
interested in the latest technologies and handset styles. The
recent launch of the first 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 has been built on the foundations
of strong relationships with suppliers, customers and
employees. I would like to thank our suppliers and network
partners for their continued support during the year, our
customers for their loyalty, and most of all our employees
for their outstanding contribution.
Hans Roger Snook, Chairman
1
The Carphone Warehouse Group PLC Annual Report 2003
Chairman’s Statement