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Dixons Carphone plc Annual Report and Accounts 2014/15
Strategic report
21
Basis of preparation – pro forma information
On 26 June 2013 the Carphone Warehouse Group plc acquired the 50% of CPW Europe which it did not already own from Best Buy Co. Inc.,
and on 6 August 2014 an all share merger of Carphone Warehouse and Dixons Retail plc (the Merger) took place. The information in the
highlights and performance review sections refer, unless otherwise stated, to pro forma Headline(1) information for continuing businesses,
reflecting the results of both Carphone Warehouse and Dixons Retail throughout both the current and comparative periods as if the CPW
Europe Acquisition and the Merger had occurred at the start of the comparative period.
The Group has changed its year end to be the Saturday closest to 30 April. The current year end therefore comprises the 13 months to 2 May
2015 for the Carphone Warehouse business with a comparative period of the 12 months ended 29 March 2014 in line with previously reported
results. As such the current year includes an additional five weeks of results from the Carphone Warehouse business. The prior period results
of Carphone Warehouse have been restated to exclude the results of its retail operations in France, Germany, the Netherlands and Portugal
which are treated as discontinued operations following the decision to exit these businesses.
Prior year comparatives for Carphone Warehouse have also been restated to reclassify the unwind of discounts for the time value of money
on network commissions receivable from pro forma Headline EBIT to interest, in line with the treatment in the current period and with the
classification in the statutory results. This item had a value of £9 million for the prior year and the reclassification has the impact of reducing
pro forma Headline EBIT.
Current period pro forma results for the Dixons Retail business comprise the 12 months ended 2 May 2015 with a comparative period of the
12 months ended 30 April 2014.
Notes
(1) Headline results exclude amortisation of acquisition intangibles, merger integration and transaction costs, CPW Europe Acquisition related
items, Phone House France operating and closure costs whilst it formed part of the CPW Europe joint venture, net interest on defined
benefit pension schemes and discontinued operations (comprising Virgin Mobile France and Phone House operations in France,
Germany, the Netherlands and Portugal). Such excluded items are described as ‘Non-Headline’. For further details see notes 4 and
24 to the Group financial statements.
(2) Pro forma EPS has been calculated assuming the number of shares existing at 2 May 2015, adjusted for the number of shares held by the
Group ESOT, apply from the start of the current and comparative periods.
(3) Like-for-like sales are calculated based on Headline store and internet sales using constant exchange rates. New stores are included where
they have been open for a full financial year both at the beginning and end of the financial period. Sales from franchise stores are excluded
and closed stores are excluded for any period of closure during either period. Customer support agreement, insurance and wholesale
revenues along with revenue from Connected World Services and other non-retail businesses are excluded from like-for-like calculations.
Revenue from Carphone Warehouse SWAS are included in like-for-like. Like-for-like revenue reflects performance for the Carphone
Warehouse business for the 13 months to 2 May 2015 compared to the 13 months to 3 May 2014 and for the Dixons Retail business for
the 12 months ended 2 May 2015 compared to the 12 months ended 30 April 2014.
(4) UK & Ireland comprises operations in the UK and Ireland and the Dixons Travel business.
(5) Nordics comprises operations in Norway, Sweden, Finland, Denmark, and Iceland. Prior to the announced disposals of operations in
Germany and the Netherlands which previously formed part of this segment, it was named Northern Europe.
(6) Southern Europe comprises operations in Spain and Greece. This now excludes the results of Portugal which are presented as
discontinued operations.
(7) Connected World Services comprises the Group’s B2B operation which leverages the specialist skills, operating processes and technology
of the Group to provide managed services to third parties looking to develop their own connected world solutions.
(8) Pro forma net debt reflects the consolidated net debt of the Group at 2 May 2015 including net funds recognised within assets held for sale
of £53 million.