Carphone Warehouse PLC (LSE: CPW) confirmed plans to split its mobile phone business and its TalkTalk broadband and fixed line operation into separate listed entities as it reported strong sales across both divisions in the fourth quarter.
In a trading update, the company said the timing of any demerger will depend on the cost and reallocation of its credit facilities. Meanwhile, the operational separation of the two businesses has already effectively been achieved.
Chief executive Charles Dunstone said: “The macro environment will undoubtedly present challenges in the year ahead but at this stage we are not seeing it deteriorate further. We are well funded, and have clear and simple strategies for our two businesses which balance growth with tight operational efficiency and cash generation.”
Full-year results are expected to be in line with expectations. It is forecasting headline EPS for fiscal 2009 of approximately 12.0-12.5 pence a share. For 2010, Carphone Warehouse expects headline EPS to be flat year-on-year.
Regarding the planned demerger, it said that, given the wider economic climate, the board is still reviewing various options in respect of the most appropriate allocation of existing debt facilities and expects to make further progress in this regard in the coming months.
It has already built up two strong management teams within the operating divisions, and it is intended that Charles Dunstone will become chairman of each company, it added.