Carphone Warehouse Sales Strong

The UK's largest phone retailer, Carphone Warehouse says that trading across the group has continued to be strong and it expects to report profit before tax at the top end of the market forecast range for the current year.

Charles Dunstone, Chief Executive Officer, said "Our fourth quarter trading performance has been a fitting end to a record year. The mobile market has continued to be buoyant and we have strengthened our competitive position within it. In fixed line we have begun to shake up the UK market and are laying the foundations for growth across Europe. As a result of our success we anticipate that full year profits will be at the top end of market forecasts, with earnings per share exceeding forecasts."

In the fourth quarter connections grew 29.6% to 1.44 million as the market remained strong. Subscriptions connections grew 32.4% to 0.66 million, stimulated by network competition and more new handsets. The pre-pay market has continued to show renewed activity, with the result that pre-pay connections increased by 45.5% to 0.69 million. As in the third quarter, this growth came at the expense of SIM-free sales, which fell 38.9% year on year.

CPW opened 12 new stores during the period, and finished the year with 1,214 in total. This figure reflects the sale of the business in the Czech Republic with 19 stores to the local management team. In the UK, the Vodafone and O2 bases grew by 42.5% to 0.56 million during the year. In Germany, the base of Hutchison, now renamed The Phone House Telecom, has started to grow, and as at the year end had 0.69 million service provision customers, of whom 0.54 million were subscription customers.

The mobile market remains strong and although year-on-year comparisons will grow more challenging as the year progresses, the company says that it anticipates connections growth of approximately 15%, with growth in subscription being ahead of growth in pre-pay. CPW expects the retail market to remain competitive and this is likely to translate into a slightly lower gross profit per pre-pay connection. However, the shift in mix towards subscription means that average gross profit per connection is expected to be constant year-on-year."

Posted to the site on 2nd April 2004