Carphone Updates on Q2

LONDON -- Charles Dunstone, Chief Executive Officer, said:

“Both TalkTalk Group and Best Buy Europe are continuing to trade well, and we are therefore re-iterating all the financial guidance we have given for the full year to March 2010. In addition, our planned demerger is progressing at pace.”

“TalkTalk Group is continuing its growth momentum with TalkTalk’s value proposition and strong customer service clearly appealing to customers. Excluding Tiscali, TalkTalk Group added a higher than expected 77,000 net new broadband customers. This follows the 47,000 net new customers added in the first quarter and, at the same time, churn continues to show a marked reduction year-on-year.”

“Tiscali’s broadband customer base fell by 62,000 during the period, which was broadly in line with our expectations, with the churn rate improving as the quarter progressed due to better customer retention activity.”

“As part of the completion process for the Tiscali acquisition, there is a mechanism for adjusting the consideration paid for the actual number of customers acquired on completion compared to the indicative customer base reported by Tiscali S.p.A. On the basis of the definition of customers in the acquisition agreement, we anticipate the adjustment required will be a reduction of 160,000 customers, who are predominantly broadband customers. The consequential true up payment due to us will be made from funds currently held in escrow."

"We nevertheless remain confident that TalkTalk Group will end the current financial year with a total broadband base of between 4.1m and 4.2m customers and thus maintain the guidance we announced in June this year.”

“In parallel, Best Buy Europe, the retail and distribution business in which we have a 50% share, also performed well. Despite an overall subdued handset market and tough year-on-year comparatives, due to the introduction of the 3G iPhone last July, we grew total connections by 2.0%.”

“We remain convinced that separating TalkTalk Group and Best Buy Europe will enable the worth and potential of each business to be more appropriately evaluated. We have made marked progress on a number of outstanding issues and we are increasingly confident of achieving the demerger by the end of March next year.”

The Carphone Warehouse Group plc