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Carphone's profits growth hits the wall
22.04.09
Carphone Warehouse's 20-year history of staggering growth has come to an end, founder and chief executive Charles Dunstone admitted today.
A combination of recession and a phone market in which almost everybody owns a mobile and subscribes to broadband means Carphone expects to show no growth in profits in the coming year to March 2010.
As if to confirm this officially, it will be shifted out of the general retailers sector of the FTSE index into the duller fixed-line telecommunications in June.
Dunstone also confirmed that the demerger of the telecoms business from the shops business is not likely to take place until next year. A year ago Carphone struck a £1.1 billion deal with US electricals retailer Best Buy to form a joint venture of shops across Europe.
Today Dunstone sidestepped corporate governance critics by saying he will be executive chairman of the fixed-line company TalkTalk and the retailer Carphone. New chief executives will be appointed for each company.
Carphone said earnings are set to drop from 20.1p last year to 12p-12.5p in the year just ended with a similar number likely in the year to March 2010.
