Carphone Warehouse has shrugged off tough trading conditions
to add 15,000 new broadband subscribers, putting it on target to
end the year with 4.2 million, following its takeover of Tiscali's
UK business.
In its second quarter trading update released this morning, CEO
Charles Dunstone said TalkTalk, the networking arm of Carphone
Warehouse, had added a "higher than expected" 77,000 new broadband
customers, but had lost 60,000 former Tiscali users "as expected".
He said he expected to lose up to 100,000 more from the million
accounts he had bought.
Dunstone said both TalkTalk and Best Buy Europe were trading
well, allowing him to maintain the financial guidance given for the
full year to March 2010.
TalkTalk's net gain followed the addition of 47,000 net new
customers in the first quarter and lower churn compared to a year
ago. The Tiscali customer base also showed less churn later in the
quarter, he said.
"We anticipate the adjustment required [to the Tiscali customer
base] will be a reduction of 160,000 customers, who are
predominantly broadband customers. The consequential true-up
payment due to us will be made from funds currently held in
escrow," Dunstone said.
He was confident that TalkTalk would end the current financial
year with a total broadband base of between 4.1 million and 4.2
million customers.
Dunstone said Best Buy Europe, the retail and distribution
business in which CPW had a 50% share, performed well. "Despite an
overall subdued handset market and tough year-on-year comparatives,
due to the introduction of the 3G iPhone last July, we grew total
connections by 2.0%."
He said the planned demerger of TalkTalk Group and Best Buy
would enable the worth and potential of each business to be
evaluated better. "We are increasingly confident of achieving the
demerger by the end of March next year," he said.
Dunstone said its US arm, Best Buy Mobile, continued its very
strong development. "We remain confident in the significant
contribution we expect from this business in the current financial
year," he said.