Interim Results
Carphone Warehouse Group PLC
04 November 2003
Tuesday 4 November 2003
Embargoed until 0700 hours
The Carphone Warehouse Group PLC
Interim Results for the 26 weeks to 27 September 2003
26 weeks ended 27 26 weeks ended 28 % growth
September 2003 September 2002
£m £m
Turnover 825.5 861.2 (4.1)%
Turnover (ex-Wholesale) 723.3 433.8 66.7%
Profit before tax* 20.3 12.0 68.8%
Headline earnings per share* 1.74p 1.08p 61.1%
Dividend per share 0.4p -
* before exceptional items and amortisation of goodwill
Financial Headlines
• 15.5% growth in like-for-like retail revenues and 10.1% growth in
like-for-like gross profit
• 61.1% growth in headline earnings per share after £5.5m of losses from
talktalkTM
• 16.4% growth in connections to 2.24m
• 20.8% growth in subscription connections to 1.06m
• £18.3m of free cash flow generated
• Exceptional charge of £4.7m relating to German reorganisation
• Interim dividend of 0.4p per share
Operational Headlines
• Successful integration of Hutchison Telecommunications GmbH
• Acceleration of talktalkTM strategy
• Strong performance in major European markets
• 1,175 stores: 500th UK store opening this week
• 1,000 new jobs created over next 12 months
Hans Snook, Chairman, commented:
'These are very good results positioning us well to meet expectations for the
full year.
'Our core retail business has again delivered strong like-for-like sales and
gross profits. The good subscription mix is also fuelling the rapid growth in
our continuing revenues beyond the point of sale, further improving the profile
and quality of our earnings. The impressive growth of our Continental
operations reflects the impact of our management team and the growing critical
mass we are establishing.
'The acquisition of Opal has proved a winning move. We are now a significant,
profitable and fast growing player in the business telecoms market. Opal has
also enabled the highly successful launch of talktalkTM. This extends and
reinforces our position as the natural port of call for customers to meet all
their communications needs. It is also rapidly building an additional recurring
revenue and underlying profit stream.
'The heightened competition between both mobile networks and handset vendors,
coupled with our widened customer offer and store portfolio development, gives
us confidence in sustained, profitable growth.'
Charles Dunstone, CEO, said:
'As the markets in which we operate return to growth, we are benefiting from our
service based proposition and from our extended customer offer. The increased
competition between mobile networks and the flow of new handsets and other
mobile devices, combined with continuously changing tariffs, are reinforcing the
customer's need for impartial advice. As a result, our Retail operation has
performed consistently well throughout the first half with an accelerated rate
of subscription growth through the second quarter. Pre-pay connections growth
was consistent over the period, though with falling prices year-on-year.
'The significant growth in both Ongoing and Insurance was driven by subscription
connections and demonstrates the power of our business model. The store
portfolio continues to generate both a growing profits stream at the point of
sale and increasing value to the group over the customer lifetime. The launch
of talktalkTM is proving a natural extension of this model.
'The highlight in our Mobile Telecoms Services business has been the acquisition
and successful integration of Hutchison, the German service provider business we
acquired in June. Alongside this, we continue to see good organic growth in our
UK customer bases.
'Excluding the effect of the Hutchison acquisition, organic growth in
contribution from our non-UK businesses was 43.0%, on top of a 47.2% rise in the
same period of last year. Individual markets such as France and Spain are
clearly becoming significant, high growth contributors, and our increasing
market share in each country is reinforcing our position and raising our profile
with networks and handset vendors alike.
'In our fixed line businesses, the progress that Opal has made in the last 12
months is impressive. The business continues to win new customers through its
attractive rates and bespoke value-added services, supported by technical
excellence and a low operating cost base. The progress of talktalkTM has
exceeded our initial expectations, leading to the more aggressive growth
strategy we announced last month.
'As the group enters a phase of strong growth, we need to invest more in
recruiting high quality employees and we expect to create a further 1,000 jobs
over the next 12 months through new store openings, our new call centre in
Warrington, and supporting the business units from the centre.
'The outlook for the group is very promising. The competitive environment I
have described is playing to our strengths, and we are looking forward to a good
trading period over Christmas and the new year.'
Group Performance
Group turnover for the period was £825.5m compared with £861.2m for the prior
year. We achieved growth in turnover across all our core businesses. Excluding
the acquisitions of Hutchison and Opal, and our Wholesale operations, underlying
growth in turnover was 23.7%. Pre-tax profits for the group, before exceptional
items and goodwill amortisation, were £20.3m, an increase of 68.8% on the prior
period. Earnings per share on the same basis grew by 61.1% to 1.74p. We
generated free cash flow, excluding the costs of new stores and before
acquisitions, of £18.3m, against a cash outflow of £39.2m last year.
We incurred an exceptional charge of £4.7m in the period, in relation to the
closure of our German head office in Munich and a further 12 German stores, as
disclosed at the time of the Hutchison acquisition.
Distribution
2003 2002
£m £m
Turnover 482.9 393.0
Retail 401.2 331.6
Online 26.5 19.7
Insurance 35.8 29.0
Ongoing 19.4 12.7
Contribution 60.1 47.0
Retail 27.3 24.2
Online 1.6 1.4
Insurance 11.8 8.7
Ongoing 19.4 12.7
Support costs (28.3) (26.7)
EBITDA 31.8 20.3
Depreciation (14.5) (12.4)
EBIT 17.3 7.9
EBIT % 3.6% 2.0%
Before exceptional items and amortisation of goodwill
The Distribution division generated revenues of £482.9m and EBIT of £17.3m,
representing growth of 22.9% and 117.4% respectively on the prior year.
Retail and Online
The group achieved 2.24m connections during the period, up by 16.4% on the
previous first half. Within these figures, 0.13m connections were made through
our Online channel (inbound call centre, interactive TV and website) (2002:
0.12m). Total subscription connections grew by 20.8% to 1.06m.
Pre-pay connections grew by 13.9% to 0.96m in the period. We continue to see
steady customer demand for pre-pay products. Falling prices of low end
handsets, and increasing competition between networks, led to more aggressive
pre-pay offers towards the end of the period which is likely to continue into
the Christmas season. As a result, SIM-free sales growth was subdued at 8%, due
also to the anniversary of the roll-out of the SIM-free offer into continental
Europe.
We continued to grow our retail space during the period. By September 2003 we
were trading out of 1,175 stores (2002: 1,117 stores). Total average selling
space increased by 4.5% from 62,284 sqm to 65,094 sqm. This week we are opening
our 500th UK store, in Cardiff.
Total retail revenues grew by 21.0%. Like-for-like, revenues grew by 15.5%.
Revenues per connection on subscription and pre-pay rose by 2.8% and 1.1%
respectively. Retail gross profit increased by 15.0% to £119.7m, including
like-for-like growth of 10.1%. The gross margin deteriorated by 160 basis
points to 29.8%. As anticipated, average gross profit per subscription
connection fell 4.2% to £90.8 (2002: £94.8), as upgrade connections represented
a greater proportion of overall subscription connections than in the prior
period, and we continued to see a shift towards Ongoing revenues. Average gross
profit per pre-pay connection rose 0.7% to £28.9 (2002: £28.7).
Contribution from the retail business grew by 12.6% to £27.3m, with contribution
margin decreasing from 7.3% to 6.8%, with cost efficiency offsetting a
significant element of the gross margin impact. Performance was good across all
our major markets, with France and Spain in particular generating very strong
growth.
Insurance
Our Insurance business has grown rapidly in the first half, with good
subscription volumes driving a significant improvement in the mix towards more
valuable high tier policies. Year-on-year our total Insurance customer base
increased by 12.8% to 1.15m, with our non-UK base growing by 19.2% to 0.42m.
Insurance revenues grew by 23.4% to £35.8m, with the annualised average premium
per customer increasing by 10% to £66 (2002: £60). Contribution from Insurance
rose by 35.9% to £11.8m, reflecting a contribution margin of 32.9% (2002:
29.9%).
Ongoing
Ongoing revenues, the continuing share of ARPU we receive for connecting
customers to networks, grew by 52.5% to £19.4m, again supported by the strong
growth in subscription connections. The rapid growth rates in both Insurance
and Ongoing demonstrate the importance of the Retail business in the recruitment
of subscription customers to maximise the lifetime value of the customer
relationship.
Wholesale Division
2003 2002
£m £m
Turnover 102.2 427.5
Contribution 1.0 5.1
Support costs (1.1) (0.9)
EBITDA (0.1) 4.2
Depreciation (0.6) (0.4)
EBIT (0.7) 3.8
EBIT % (0.7)% 0.9%
As previously announced we withdrew from the handset wholesale trading market in
April 2003 following a change in legislation relating to joint and several
liability for VAT. We believe that the scope of this new law makes it highly
unlikely that we will re-enter the market in the foreseeable future. In the
meantime, the other activities included within Wholesale, our voucher
distribution business and the wholesale shipment of trade-in handsets, continue
as normal.
Telecoms Services
2003 2002
£m £m
Turnover 240.5 40.8
Mobile 128.2 40.8
Fixed 112.3 -
Contribution 17.8 7.1
Mobile 9.8 7.1
Fixed 8.0 -
Support costs (7.8) (3.8)
EBITDA 10.0 3.3
Depreciation (4.5) (1.7)
EBIT 5.5 1.6
EBIT % 2.3% 3.9%
Before exceptional items and amortisation of goodwill
Mobile
Turnover in Mobile Telecoms Services grew 214.4% to £128.2m, and contribution
grew by 38.2% to £9.8m. These figures include £80.9m of revenue and £3.8m of
contribution from Hutchison Telecommunications, acquired in June.
Customer numbers in our facilities management operations increased 12.0% to
1.06m. This was achieved through the organic growth of our Vodafone and O2
customer bases in the UK, which increased by 32.9% to 0.46m.
The integration of Hutchison with our existing German retail operations has
proceeded very well. We have closed our existing head office in Munich and
consolidated all support functions within Hutchison's Munster headquarters. The
subscription customer base has remained steady at 0.51m with organic growth now
expected through customers from The Phone House stores. As planned, the pre-pay
base continues to decline steadily and now numbers 0.14m customers.
Our own MVNO, Fresh, had a quiet first half but continues to make a good
contribution to group profits. Customer numbers grew 9.2% to 0.13m compared to
September 2002. As part of our agreement with Sainsbury's, we assumed
management of a base of 40,000 customers that we have been upgrading onto the
new Sainsbury's package.
Fixed
Opal generated revenues of £105.8m in the first half, an increase of 52.4% on
Opal's equivalent six month period in 2002. Contribution was £13.6m,
representing a margin of 12.8%. 2.3bn minutes were switched over the Opal
network in the period, or 2.1bn excluding the talktalkTM traffic. This organic
growth has been driven by a number of new customer wins and by increased
activity in the reseller segment. Although the gross margins from this business
are lower, the associated operating costs are minimal. We expect Opal's growth
rate to slow in the second half, and the contribution margin to trend towards
10% in the medium term as the business pursues larger corporate accounts.
The overall rate of growth in Opal has exceeded our expectations and as a result
we are accelerating our network build-out. We now anticipate having eight
switches in total by the year end, leading to total capex for Opal of £10-12m,
compared to previous guidance of £6-8m.
talktalkTM generated a loss of £5.5m on revenues of £6.4m in the first half.
Total marketing and customer acquisition costs were £7.3m and the acquisition
cost ('SAC') per customer was £18.3. As previously stated, we anticipate total
losses of £7-8m from talktalkTM in the current financial year, and an average
SAC of £22. We had a total of 140,000 tolling customers at the period end and
are targeting 350-400,000 by March 2004.
Despite recent new entrants into the CPS market, talktalkTM continues to be the
cheapest tariff available based on an analysis of our existing customers' usage
profile, and we will continue to refine the product offering in the coming
months to build loyalty and give our customers additional value.
Depreciation and support costs
The depreciation charge of £19.6m grew 34.7% year-on-year, reflecting the
inclusion of Opal and Hutchison for the first time. Support costs increased by
18.5% year-on-year to £37.2m, as central functions continued to expand to
support the growing business, particularly in the Telecoms Services division.
Exceptional items
We incurred an exceptional charge of £4.7m in our German business in the first
half, relating to the planned closure of 12 stores, the integration of the head
office operations of The Phone House Germany and Hutchison, the closure of the
existing German head office in Munich, and associated fixed asset write-offs.
Cash flow and dividend
At 27 September 2003, the group had net funds of £2.9m, compared to net funds of
£27.6m at the end of September 2002. During the period the group generated cash
flow from operations of £36.6m (2002: cash outflow of £30.0m), and total free
cash flow (excluding the capital cost of new stores and before acquisitions) of
£18.3m (2002: cash outflow of £39.2m).
The Board has proposed an interim dividend of 0.4p per share, which is expected
to account for one third of the total dividend for the year. This will
represent 20% growth on the maiden dividend paid last year and reflects the
Board's confidence in the group's growth prospects.
The ex-dividend date will be 12 November 2003 and the record date will be 14
November 2003. The intended payment date will be 27 November 2003.
Change in management roles
As a result of a recent internal reorganisation, Geoffroy Roux de Bezieux has
been appointed to the role of Group Chief Operating Officer, Distribution and
Customer Management, giving him responsibility for all of the group's retail and
customer care activities. David Goldie, CEO of Opal, has been appointed to the
role of Group Chief Operating Officer, Telecoms, giving him responsibility for
Opal, talktalkTM, Fresh and other telecoms initiatives.
Outlook
As we approach the key Christmas trading period, the outlook for the Retail
business continues to be good. Intensifying competition between networks in
both subscription and pre-pay, combined with a broad array of new handsets, is
stimulating consumer interest and driving growth in the market. We expect this
to continue at least into the first quarter of 2004.
On the fixed line side, we expect Opal to continue to grow strongly driven by
new business wins and a buoyant reseller market. talktalkTM represents a
significant opportunity to drive long term growth in group earnings and to
increase the scale of the group's activities, and we are actively reviewing
residential fixed line opportunities in some of our other European markets.
Analysts' presentation
There will be a presentation for investors and analysts at 11.00am this morning
at the offices of Bloomberg, 39-45 Finsbury Square, London EC2A 1PQ. The
presentation slides will be available on our website, www.cpwplc.com.
Next trading update
The Group will give a full trading update for the third quarter of the current
financial year on 15 January 2004.
For Further Information
For analyst and institutional enquiries
Roger Taylor 07715 170 090
Peregrine Riviere 07909 907193
For media enquiries
Vanessa Tipple 07947 000 021
Anthony Carlisle 07973 611 888
Citigate Dewe Rogerson 020 7638 9571
Consolidated profit and loss account
For the 26 weeks ended 27 September 2003
Before Exceptional After
exceptional items and exceptional
items and amortisation items and
amortisation amortisation
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
27 September 27 September 27 September 28 September 29 March
2003 2003 2003 2002 2003
Notes £'000 £'000 £'000 £'000 £'000
Turnover 2 825,537 825,537 861,247 1,841,525
Cost of sales (589,223) (589,223) (696,527) (1,453,518)
Gross profit 236,314 236,314 164,720 388,007
Operating expenses 3 (194,583) (4,733) (199,316) (136,823) (298,017)
excluding amortisation
and depreciation
EBITDA 41,731 36,998 27,897 89,990
Depreciation (19,637) (19,637) (14,573) (31,977)
Amortisation of goodwill - (12,446) (12,446) (7,527) (20,585)
Operating profit 22,094 4,915 5,797 37,428
Exceptional items 3 - - 13,199 (1,946)
Net interest payable (1,790) (1,790) (1,292) (995)
Profit on ordinary 20,304 3,125 17,704 34,487
activities before
taxation
Tax on profit on ordinary 4 (5,076) (5,076) (3,009) (12,418)
activities
Profit (loss) on ordinary 15,228 (1,951) 14,695 22,069
activities after taxation
Equity dividends 6 (3,498) (3,498) - (8,729)
Retained profit (loss) 11,730 (5,449) 14,695 13,340
for the period
Basic earnings per share
Unadjusted 5 - (0.22)p 1.76p 2.60p
Headline 5 1.74p - 1.08p 5.25p
Consolidated statement of total recognised gains and losses
For the 26 weeks ended 27 September 2003
26 weeks ended 26 weeks ended 52 weeks ended
27 September 28 September 29 March
2003 2002 2003
Notes £'000 £'000 £'000
(Loss) profit for the financial period 10 (1,951) 14,695 22,069
Currency translation 10 (199) 723 3,021
Total gains and losses recognised since last (2,150) 15,418 25,090
financial statements
Consolidated balance sheet
As at 27 September 2003
27 September 2003 28 September 2002 29 March 2003
Notes £'000 £'000 £'000
Fixed assets
Intangible assets 7 387,110 272,405 367,547
Tangible assets 137,477 114,320 133,040
Investments 15,009 30,190 15,021
539,596 416,915 515,608
Current assets
Stock 75,330 66,795 56,351
Debtors due within one year 242,242 180,750 176,981
Short-term investments 9,595 35,424 26,276
Cash at bank and in hand 125,246 44,635 46,977
452,413 327,604 306,585
Creditors: Amounts falling due within one year (338,094) (208,729) (275,311)
Net current assets 114,319 118,875 31,274
Total assets less current liabilities 653,915 535,790 546,882
Creditors: Amounts falling due after one year (151,261) (63,769) (49,383)
Provisions for liabilities and charges (48,461) (45,999) (37,956)
Net assets 454,193 426,022 459,543
Capital and reserves
Called-up share capital 873 839 873
Share premium 396,054 362,723 395,476
Capital redemption reserve 30 30 30
Profit and loss account 57,236 62,430 63,164
Total capital employed 10 454,193 426,022 459,543
Approved by the Board of The Carphone Warehouse Group PLC
4 November 2003
Consolidated cash flow statement
For the 26 weeks ended 27 September 2003
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2003 28 September 2002 29 March 2003
Notes £'000 £'000 £'000
Net cash inflow (outflow) from operating 36,626 (29,972) 77,678
activities
Net cash outflow from returns on investments and (1,790) (1,292) (2,570)
servicing of finance
Net cash (outflow) inflow from taxation (1,976) 4,805 1,059
Net cash (outflow) inflow from capital 8 (1,410) 33,569 18,244
expenditure and financial investment
Net cash outflow from acquisitions and (30,978) (152) (37,892)
disposals
Equity dividends paid (8,729) - -
Net cash (outflow) inflow before financing (8,257) 6,958 56,519
Net cash inflow (outflow) from financing 93,732 15,633 (42,623)
Increase in cash in the period 9 85,475 22,591 13,896
Reconciliation of net cash inflow (outflow) from operating activities to
operating profit
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2003 28 September 2002 29 March 2003
£'000 £'000 £'000
Operating profit 4,915 5,797 37,428
Operating exceptional items 4,733 - -
Operating profit excluding exceptionals 9,648 5,797 37,428
Depreciation of tangible fixed assets 19,637 14,573 31,977
Amortisation of goodwill 12,446 7,527 20,585
EBITDA 41,731 27,897 89,990
Loss (profit) on disposal of tangible fixed 125 - (912)
assets
Decrease in provisions (1,322) (1,700) (12,229)
Increase in stock (16,611) (16,227) (4,024)
Increase in debtors (31,722) (39,573) (1,803)
Increase (decrease) in creditors 44,425 (369) 6,656
Net cash inflow (outflow) from operating 36,626 (29,972) 77,678
activities
Notes to the financial statements
For the 26 weeks ended 27 September 2003
1 Basis of preparation and accounting policies
The interim report has been prepared using accounting policies consistent with
those set out on page 26 of The Carphone Warehouse Group PLC annual report for
the 52 weeks ended 29 March 2003. The financial information for the 26 weeks to
27 September 2003 and the 26 weeks to 28 September 2002 is unaudited.
The information set out in this interim report for the 26 weeks ended 27
September 2003 does not comprise statutory accounts within the meaning of
section 240 of The Companies Act 1985. The statutory accounts for the 52 weeks
ended 29 March 2003, incorporating the unqualified auditor's report, have been
filed with the Registrar of Companies.
2 Segmental analysis
Divisional results are analysed as follows:
26 weeks 26 weeks 52 weeks
ended ended ended
27 September 28 September 29 March
2003 2002 2003
Turnover Profit before Turnover Profit before Turnover Profit before
tax tax tax
£'000 £'000 £'000 £'000 £'000 £'000
Distribution 482,878 17,274 393,019 7,936 876,144 44,031
Wholesale 102,189 (709) 427,450 3,779 806,624 4,096
Telecoms Services 240,470 5,529 40,778 1,609 158,757 9,886
825,537 22,094 861,247 13,324 1,841,525 58,013
Amortisation of goodwill (12,446) (7,527) (20,585)
Operating exceptional items (4,733) - -
4,915 5,797 37,428
Non-operating exceptional - 13,199 (1,946)
items
Net interest payable (1,790) (1,292) (995)
Profit before tax 3,125 17,704 34,487
Divisional results for the period ended 28 September 2002 have been re-analysed
to reflect the inclusion of the Group's ongoing revenue within Distribution and
the allocation of common costs and depreciation to each division.
Results by geographical location are analysed by origin as follows:
26 weeks 26 weeks 52 weeks
ended ended ended
27 September 28 September 29 March
2003 2002 2003
Turnover Profit before Turnover Profit before Turnover Profit before
tax tax tax
£'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 504,515 13,805 648,141 9,354 1,368,244 40,537
Rest of Europe 321,022 8,289 213,106 3,970 473,281 17,476
825,537 22,094 861,247 13,324 1,841,525 58,013
Amortisation of goodwill (12,446) (7,527) (20,585)
Operating exceptional items (4,733) - -
4,915 5,797 37,428
Non-operating exceptional - 13,199 (1,946)
items
Net interest payable (1,790) (1,292) (995)
Profit before tax 3,125 17,704 34,487
Geographical results for the period ended 28 September 2002 have been
re-analysed to reflect the allocation of common costs and depreciation to each
geographical segment.
Group net assets are analysed as follows:
27 September 2003 28 September 2002 29 March 2003
£'000 £'000 £'000
By division:
Distribution 415,497 394,793 441,108
Wholesale - - -
Telecoms Services 38,696 31,229 18,435
454,193 426,022 459,543
By geographical location:
United Kingdom 310,073 352,304 371,668
Rest of Europe 144,120 73,718 87,875
454,193 426,022 459,543
3 Exceptional items
Exceptional items include the following operating exceptional items,
non-operating exceptional items and amounts written off investments:
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2003 28 September 2002 29 March 2003
Notes £'000 £'000 £'000
Costs of operational reorganisation
Business reorganisation (a) (4,733) - -
Exceptional operating items (4,733) - -
Profit on disposal of fixed assets (b) - 13,199 13,199
Amounts written off fixed asset (c) - - (15,145)
investments
Total exceptional items (4,733) 13,199 (1,946)
(a) Business reorganisation
Following the acquisition of Hutchison Telecommunications GmbH ('HTG') in June
2003, the Group closed a further 12 retail stores in Germany, commenced the
closure of its support centre in Munich, and began a programme to integrate the
retail business with HTG. A provision of £4.7m has been booked to cover the
costs of this reorganisation.
(b) Profit on disposal of fixed assets
In August 2002 the Group completed the sale and leaseback of its freehold
offices in London for a consideration of £36.6m, generating a net profit on
disposal of £13.2m.
(c) Amounts written off fixed asset investments
During the period ended 29 March 2003 £15.1m was written off the Group's holding
in Wireless Frontiers, an independently managed wireless technology fund, to
reflect the diminution in the value of the fund at 29 March 2003.
4 Tax on profit on ordinary activities
Taxation has been provided using the estimated effective rate of taxation for
the 52 weeks ending 27 March 2004 of 25% (52 weeks ended 29 March 2003 - 21.8%),
amounting to a charge of £5.1m.
5 Earnings per share
The calculation of basic earnings per share is based on the following profits or
losses and number of shares:
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2003 28 September 2002 29 March 2003
Weighted average number of shares (000's) 873,131 835,687 850,273
Unadjusted earnings for the financial period (1,951) 14,695 22,069
(£'000)
Headline earnings for the financial period (£'000) 15,228 9,023 44,600
Basic earnings (loss) per share
Unadjusted (0.22)p 1.76p 2.60p
Headline 1.74p 1.08p 5.25p
Headline earnings per share is calculated on earnings before amortisation of
goodwill and exceptional items and is provided because the Directors consider
that it gives a better indication of underlying performance than unadjusted
earnings per share.
6 Dividends
An interim dividend of 0.4p (2002 - Nil) per ordinary share is proposed.
7 Acquisitions
In April 2003 the Group entered into an agreement with J Sainsbury PLC to
provide mobile and fixed line telecom services to its customers. Under the
terms of the agreement, a net cash consideration of £5.7m will be payable in
instalments over a 36 month period, giving rise to goodwill of £6.0m.
In June 2003 the Group acquired 100% of the issued share capital of Hutchison
Telecommunications GmbH from Orange Holdings Limited for a net cash
consideration of £31.0m, giving rise to goodwill of £25.4m.
8 Capital expenditure and financial investment
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2003 28 September 2002 29 March 2003
£'000 £'000 £'000
Payments to acquire fixed asset investments (25) - (36)
Payments to acquire tangible fixed assets (18,263) (16,037) (39,411)
Net inflow on short-term investments 16,720 13,006 54,572
Receipts from sale of tangible fixed assets 158 36,600 3,119
Net (outflow) inflow from capital expenditure (1,410) 33,569 18,244
and financial investment
9 Analysis of changes in net funds (debt)
At 29 March Cash flows Retranslation At 27 September
2003
2003
£'000 £'000 £'000 £'000
Cash at bank and in hand 46,977 78,306 (37) 125,246
Overdrafts (11,592) 7,169 (45) (4,468)
35,385 85,475 (82) 120,778
Debt due within one year (2,731) 3,334 (796) (193)
Debt due after more than one year (29,832) (96,766) (685) (127,283)
Net funds (debt) 2,822 (7,957) (1,563) (6,698)
10 Reconciliation of movements in shareholders' funds
26 weeks ended 26 weeks ended 52 weeks ended
27 September 2003 28 September 2002 29 March 2003
£'000 £'000 £'000
(Loss) profit for the period (1,951) 14,695 22,069
Dividends (3,498) - (8,729)
Currency translation (199) 723 3,021
Issue of share capital 298 3,349 35,927
Net movement in shareholders' funds (5,350) 18,767 52,288
Opening shareholders' funds 459,543 407,255 407,255
Closing shareholders' funds 454,193 426,022 459,543
This information is provided by RNS
The company news service from the London Stock Exchange
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