Carphone Warehouse 2015 Annual Report Download - page 25

Download and view the complete annual report

Please find page 25 of the 2015 Carphone Warehouse annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

Dixons Carphone plc Annual Report and Accounts 2014/15
Strategic report
23
Southern Europe
Revenue expressed in Sterling was affected by a significant
movement on foreign exchange rates in the region. Pro forma
revenue on a local currency basis was down 10% including
a 3% benefit of the additional five weeks of trading from the
Phone House Spain business. The difference between the
local currency revenue growth and like-for-like predominantly
reflects the closure of stores in Spain explained below.
Southern Europe pro forma Headline EBIT was £14 million
(2013/14: £10 million).
The business in Greece delivered strong like-for-like revenue
growth during the year, with most categories performing well,
in particular large screen TVs. The strong performance in this
market saw the business return to profitability during the year.
We do however remain very mindful of the uncertain economic
and political situation in the country and the effect this may
have on our business. The team have been very active in
planning for every contingency.
Our business in Spain continues to operate in a tough
marketplace. Although it has been negatively impacted by
these pressures, we have a strong management team in place,
which continues to innovate and develop the business. During
the year we reached agreement with Telefonica to distribute
the products and services of Movistar in our stores which has
been a positive force. We have also focused the business
model to a greater extent on franchise operations and reduced
our own store portfolio. In total we closed a net 35 stores
during the year reflecting an increase of 20 franchise stores
and a reduction in own stores of 55. These activities resulted
in restructuring costs and the disposal of some non-core
assets all of which have been included within pro forma
Headline results.
Connected World Services
Connected World Services (CWS) pro forma Headline revenue
was £130 million (2013/14: £78 million) with the increase
predominantly reflecting the revenue from our Samsung
Experience Stores which launched at the end of last year, in
addition to the benefit of the additional five weeks of trading
from the legacy Carphone Warehouse business. Pro forma
Headline EBIT was £8 million (2013/14: £5 million).
The CWS management team has worked hard during the year
to grow its strong pipeline and to build on relationships with
blue-chip partners including Samsung, Aviva, RBS and
TalkTalk. It has also continued to develop its omni-channel
platform, honeyBee.
On 2 July 2015, CWS announced that it had entered into an
agreement with Sprint Corporation, a leading US mobile
network operator, to open and manage Sprint-branded stores
in the US. CWS will supply retail expertise to Sprint who will
initially open around 20 retail stores, and if this trial is
successful, the parties will progress to a second phase which
will involve CWS investing equally with Sprint in a joint venture
to support roll-out plans of up to 500 stores in the US. During
the second phase, Dixons Carphone has agreed to invest up to
$32 million to obtain a 50% interest in the new venture. Dixons
Carphone will also provide support across the whole of the
Sprint estate as part of a wider know-how sharing
arrangement. We believe this is a very exciting opportunity
for the future and provides a platform for the Group to return
to the US marketplace.