Carphone Warehouse is making progress with plans to split in two and said it expects to see signs of a consumer recovery by the end of this year, lifting its shares to an eight-month high.
Chief financial officer Roger Taylor said today the firm hoped to separate its TalkTalk telecoms business and mobile phone retail arm in March, after its half-year results, and was close to agreeing banking arrangements for the retail part.
"It will be March or July (following full-year results). But our hope would be March," he said in a telephone interview.
Carphone said in November it planned to split in two in a move which some analysts say could lead to a revaluation of the businesses, which they say have been held back by being linked to an increasingly unrelated partner.
Carphone also said today adjusted earnings per share (EPS) fell 17 per cent to 12.6 pence in the year ended March 31st, broadly in line with expectations, and raised its dividend 2 per cent to 4.35 pence a share.
At 8am, Carphone shares were up 3 per cent at 178 pence, after earlier hitting an eight-month high of 183 pence.
Carphone is Europe's biggest mobile phone retailer and has put this part of the business into a joint venture with US group Best Buy, which plans to roll out a new chain of electrical goods stores in Europe, starting in the UK next year.
It will also be Britain's biggest provider of residential broadband when it completes a £236 million purchase of Tiscali UK announced last month.
Carphone reiterated 2009-10 guidance to generate over £150 million in free cash flow and for the Tiscali deal to boost EPS by 10 per cent.
Both retailers and telecoms groups have been hit by a downturn in consumer spending, but shares have rallied in recent weeks on hopes of a recovery.
Mr Taylor said consumer confidence appeared to have stabilised, though there was little sign of a recovery at the moment.
"I think if we have a continued period of stability then that will naturally follow. It's probably more the back end of this year (when that will happen) rather than now," he said.
Mr Taylor said the Best Buy Europe venture was making good progress with plans to open up to five megastores in Britain next Spring.
"There's no hesitation in regard of us getting there," he said.
Around £350 million to £400 million of bank facilities for the venture would be signed in the next week or two, he said, adding terms were "as good as we could have hoped for.
Reuters