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Carphone Warehouse - Acquisition triggers 40% eps upgrade

July 2013

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • CPW
  • Price:
  • 241p
The shares soared after Carphone announced it has bought the 50% stake in Carphone Warehouse Europe (CPW Europe) that it doesn't already own from US giant, Best Buy for £471m. Carphone has announced the placing of 47.2m new shares (10% of the equity) to part fund the deal. The deal equates to an exit PE of just 8 while it compares favourably to the £1.1bn that Best Buy originally paid to acquire it back in 2008. Separately Carphone has announced strong Q4 trading to end March with like-for-like revenues up 6.5% reflecting a continued strong UK performance and Q4 connections rose almost 10%. In Virgin Mobile France Q4 revenues fell almost 10% while Carphone has also sold a freehold property in London for £40.5m. In reacti ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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