Carphone Warehouse 2014 Annual Report Download - page 22

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Carphone Warehouse Group plc
Annual Report 2014
20
STRATEGIC REPORT
Performance review
PRO FORMA RESULTS
Revenue EBIT PBT Revenue EBIT PBT
2014 2014 2014 2013 2013 2013
£m £m £m £m £m £m
Headline results 2,505 136 127 11 51 53
Share of results of joint ventures — (3) (3) — (48) (48)
CPW Europe joint venture (see note 24) 777 12 9 3,337 129 120
Unwind of discounts on network commissions receivable*** — 6 — — — —
Pro forma results 3,282 151 133 3,348 132 125
*** As explained in note 24, CPW Europe Headline EBIT includes the unwinding of discounts for the time value of money on network commissions receivable over
the life of the customer. In the period since the CPW Europe Acquisition, the Group has reflected such discounts in the income statement within interest income.
The discounts, which have a value of £6m in this period, have been reclassified in pro forma results for consistency with CPW Europe presentation.
IN SUMMARY
+% growth in Headline EPS,
followingCPWEuropeAcquisition
+Strong operating cash flow
+French exit process substantially complete
+% growth in annual dividend to .p
THE BUSINESS DELIVERED ITS
EARNINGS TARGET,
DESPITE MARKET CHALLENGES
Nigel Langstaff Chief Financial Officer
THIS PERFORMANCE REVIEW COVERS:
+CPW: the Group’s wholly owned businesses
including, since  June , CPW Europe which
prior to this date had been a % joint venture. CPW
results are shown on a pro forma basis, as though
CPW Europe had been % owned by the Group
throughout the current and prior periods, to enable
year-on-year comparison.
+Virgin Mobile France: the Group’s % interest
inajoint venture with Virgin Group, which is now
classified as adiscontinued operation.
+Group results: covering the Headline and statutory
performance of the Group as a whole, reflecting the
CPW Europe Acquisition as it is reported in the
Group’s income statement and other financials.
CPW
HEADLINE INCOME STATEMENT (PRO FORMA BASIS)*
2014 2013
£m £m
Revenue 3,282 3,348
Gross margin 837 835
Gross margin % 25.5% 24.9%
Operating expenses (636) (627)
EBITDA** 201 208
Depreciation and amortisation (50) (76)
EBIT 151 132
EBIT % 4.6% 3.9%
Interest (18) (7)
PBT 133 125
Tax (30) (26)
PAT 103 99
* Prior year Headline results have been restated to exclude the results of
theGroup’s French retail business following the decision to exit this market.
Thisbusiness generated revenues of £357m and EBIT of £8m in the prior
year. Current year losses associated with the French business during the
exit programme, details of which are provided within Group results below,
are similarly excluded from Headline results and KPIs. For further details
see note 4 to the Group financial statements.
** Pro forma Headline EBITDA includes the unwinding of discounts for the time
value of money on network commissions receivable over the life of the customer.
This unwind had a value of £9m in the year (2013: £9m) and is treated as
interest income in the Group’s non-pro forma Headline and statutory results.