Carphone to separate by July 2010

Carphone and TalkTalk are set to become separate listed compnies

Mobile phone retailer Carphone Warehouse says it will complete the separation of its TalkTalk fixed line and broadband business by July 2010.

It is intended that the two businesses will become separate listed companies.

Carphone recently announced a £236m deal to buy the UK operations of Italian broadband firm Tiscali.

The deal will make TalkTalk the second biggest UK broadband provider. Carphone also said it had fared well against a "difficult economic backdrop".

The comments came as Carphone released annual results showing that revenue fell to £1.385bn from £1.424bn in the 2008/2009 financial year.

It made a pre-tax loss of £72m, although it made a profit of £133m if exceptional items such as the gain from its deal with US chain Best Buy is included.

"Because of the degree of change we have undertaken, it is not easy to compare last year's financial results with this year's," said Charles Dunstone, Carphone's chief executive.

'No synergies'

Mr Dunstone said that the TalkTalk demerger would make it easier for shareholders to assess more clearly the value of the group's businesses.

"It's been increasingly obvious that the group is now two businesses," Mr Dunstone said.

"Both have reached the point where there are no material synergies between them... they need to operate independently."

Carphone operates 2,400 mobile phone shops across Europe in a joint venture with the US retailer Best Buy.

The venture plans to open larger scale "big box" stores in spring next year.

Carphone said its total dividend for the year was 4.35p a share, an increase of 2% from last year.