Carphone to demerge by 2010

Carphone Warehouse today said it would spin-off its TalkTalk broadband business by July 2010 at the latest as it reported results after a “significant year of achievement”.

The group – which sold its retail business into a joint venture deal with US consumer electronics giant Best Buy last year – said it was “confident” of a demerger by next summer.

Carphone saw revenues drop by 2.7% in its TalkTalk business in the year to March 31, although underlying earnings rose 56% to £181m (€206m).

It recently announced a £236m (€269m) deal to buy the UK operations of Italian broadband firm Tiscali – a move that will see its TalkTalk arm become the second biggest UK broadband provider behind BT.

Best Buy Europe, in which Carphone now has a 50% stake and includes its European and US retail stores, saw annual underlying earnings fall 13% to £188m (€214m).