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Carphone Warehouse Group plc Annual Report 2011 09
HARNESSING THE CONNECTED
WORLD TO GROW OUR BUSINESS
AND PROVIDE REAL VALUE TO
OUR CUSTOMERS
This has been a year of considerable
success for the Group, during which
our businesses have made impressive
progress. As a result, we ended the
year with Group Headline earnings per
share of 15.0p (2010: 8.3p) and a strong
balance sheet with over £156m of funds
and loan assets. The Group is well
positioned to maintain this momentum,
despite the tough economic environment.
This combination of financial strength
and positive outlook lies behind the
inauguration of our progressive dividend
policy, with a dividend for the year ended
31 March 2011 of 5.0p.
Carphone Warehouse Group comprises
a 50% joint venture share in Best Buy
Europe, a separate joint venture with
Virgin, Virgin Mobile France, and directly
owned property interests and other assets.
Best Buy Europe has three main operations:
CPW Europe, Europe’s largest independent
mobile retailer; a profit share in Best Buy’s
mobile phone retailing operations in the
US; and Best Buy UK, our ‘Big Box’
consumer electronics stores and online
platform in the UK.
Virgin Mobile France is France’s
leading MVNO.
Best Buy Europe
CPW Europe
Some 21 years ago, the original Carphone
Warehouse opened its first store on the
Marylebone Road in London. Today, it has
over 2,400 stores, covering the UK, Ireland
and seven Continental European countries,
and last year connected almost 12 million
individuals with new mobile devices.
From the outset, Carphone has been
based on the principles of choice,
value and impartial advice for all our
customers. These principles, together
with our record of innovation, have stood
us in good stead and are at the heart of
Roger Taylor,
Chief Executive Officer
We consider ourselves
well positioned to take
advantage of smartphone
and tablet technology
and are excited about
the prospects for the
year ahead.
our reputation. They are also all the more
relevant now that mobile phones and
other wireless devices have become
powerful computers, with an explosive
growth of applications, a rapid product
development cycle, and an increasing
range of home entertainment and
communication technology.
Ownership of this ‘Connected World’
is at the heart of our retail strategy.
We will continue to provide outstanding
value and service across a broad range
of wireless products and accessories
and help simplify technology choices for
our customers.
CPW Europe capitalised well on these
opportunities to grow its Headline EBIT
by 18% to £134.6m.
During the year we saw an increase in
penetration of smartphones and currently
around 80-90% of handsets sold with
a postpay connection in the UK are
smartphones, with penetration in the
rest of Europe increasing all the time.
We see internet connectivity and
smartphone features becoming the norm
across virtually all mobile devices, further
increasing smartphone penetration in the
postpay segment. The prepay segment
experienced lower penetration of
smartphones, given the economic
environment and higher price points.
Our ‘Wireless World’ format stores,
which have a wider range of products
and services than our traditional stores,
continue to produce excellent customer
feedback and compelling financial returns.
As at the year end we had 106 ‘Wireless
World’ stores across six markets. We
are accelerating the roll-out of these
stores with a target of 350-400 by the
end of the current financial year and
aspirations to convert most of the estate
within five years.
BUSINESS REVIEW
CHIEF EXECUTIVE OFFICER’S REVIEW
BUSINESS REVIEW