Carphone Warehouse 2005 Annual Report Download - page 17

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OPAL SWITCHED MINUTES
UP 73.4% (m)
5,517
9,563
’05
’04
MOBILE CUSTOMER BASE
UP 14.6% (000s)
’05
’04
’03
’02
1,0191,115
1,973 2,262
Operational Performance
Telecoms Services Division
2005 2004
£m £m
Turnover 804.0 554.5
Mobile 377.7 305.9
Fixed 426.3 248.6
Contribution 59.4 43.2
Mobile 25.7 23.5
Fixed 33.7 19.7
Support costs (24.7) (18.1)
EBITDA 34.7 25.1
Depreciation (12.2) (10.1)
EBIT 22.5 15.0
EBIT % 2.8% 2.7%
Before exceptional items and amortisation of goodwill
The Group’s Telecoms Services operations are split
into two businesses, Mobile and Fixed. The Mobile
business encompasses our facilities management
(‘FM’) operations, managing customers on behalf of
networks, and our own customers, including our virtual
network, Fresh, and our German service provision
(‘SP’) business, The Phone House Telecom. The Fixed
business primarily comprises Opal, our business-to-
business network, and TalkTalk, our residential service,
both in the UK. We also operate a number of smaller
fixed line businesses across Europe.
Telecoms Services revenues grew by 45.0% year-on-
year to £804.0m (2004: £554.5m), with good growth
across all major business lines. EBIT increased by
50.0% to £22.5m (2004: £15.0m). The EBIT margin
increased slightly from 2.7% to 2.8% as strong top line
growth was offset by continued investment in recruiting
customers to TalkTalk and building support functions to
create a robust platform for long-term growth.
Mobile
Overall we achieved revenue growth of 23.5% to
£377.7m (2004: £305.9m), with contribution rising
9.3% to £25.7m (2004: £23.5m).
The Phone House Telecom, our German SP business,
performed very strongly. The rate of customer acquisition
accelerated in the second half and by March 2005 we
had 0.86m customers, of whom 0.64m were on two-
year subscriptions. We completed the integration of our
German retail operations and are now focused on
growing our distribution network, both by opening new
stores and by expanding our dealer channel. Revenues
rose by 41.3% to £298.3m compared to the ten-months
figure from the previous year, with contribution up by
52.8% to £16.4m on the same basis. The contribution
margin increased from 5.1% to 5.5% as the business
benefited from strong competition between the
incumbent networks.
Total revenues from the rest of our Mobile businesses
fell 16.2% to £79.4m, while contribution fell 27.3%
to £9.3m. The fall in revenues was the result of the
migration of Sainsbury’s customers from an SP to an
FM arrangement, and a lower average base at Fresh.
Operating and Financial Review continued www.cpwplc.com 13
The Telecoms Services division
comprises a range of network
and support services to business
and residential telecoms customers