Telecoms and retail firm Carphone Warehouse confirmed plans to split in two when credit markets have improved, as it posted strong fourth-quarter results and raised free cash-flow guidance for 2009-10.
The firm, which said in November it was looking at a possible demerger, did not give a timeframe for the move, saying it would depend on "the cost and reallocation of the Group's credit facilities."
Carphone is Europe's biggest independent mobile phone retailer, with over 2,400 stores across nine countries. It sold half of its retail business to Best Buy last year to give the US electricals retailer a platform from which to launch its megastores in Europe.
It is also Britain's third-biggest residential broadband and fixed-line telecoms firm.
"We believe shareholder value will be best served by a demerger of the two operating businesses to create two separately-listed companies," it said this morning.
Carphone, which said it would move from the stock market's retail index to its telecoms index in June, added a net 74,000 broadband customers in the last quarter of its financial year, beating the median forecast in a company poll of 44,000.
Mobile phone connections rose 12 per cent to three million, while subscription connections were up 2 per cent to 1.1 million.
Carphone said earnings per share (EPS) for the year ended March would be between 12 pence and 12.5 pence and EPS next financial year would be flat, in line with previous guidance.
It raised guidance for free cash flow next financial year to over £150 million ($218 million).
Reuters