Carphone Warehouse 1st Half Revenue +18%, Expands in USA
Published on: 7th Nov 2007
Note -- this news article is more than a year old.
LONDON (Dow Jones) Europe's largest mobile phone retailer Carphone Warehouse Group, Thursday reported a 18% increase in first half revenues and announced a major expansion into the U.S., saying it will open 1,000 stores by 2009.
The company, which hiked its half-year dividend by 25%, almost doubled earnings before interest, tax, depreciation and amortization, or Ebitda to GBP161.9 million from GBP83.2 million, as it stepped up its broadband business and acquired AOL's U.K. internet service provider unit.
"We have made good progress across the Group in the first half. The Retail business continues to prosper across Europe, and we are announcing today a major roll-out of our U.S. venture," said Carphone Warehouse founder and Chief Executive Charles Dunstone.
"The outlook for continued growth is good. We see considerable scope for further physical expansion, both in Europe and the US, over the coming years," he said.
Revenues, in the 26 weeks to Sept. 29, jumped to GBP2.14 billion from GBP1.81 billion the previous year.
Numis analyst Jose Marco-Tobares said that he believes there will be further upside to 2009 forecasts, following Carphone Warehouse's decision to accelerate growth in the U.S.
Carphone Warehouse said that it will expand further into the U.S. through its joint-venture with retailer Best Buy, with the two companies planning to open 1,000 Best Buy Mobile stores by 2009. The comapny had opened 70 U.S. stores by the end of September, with previous company guidance saying that between 150 to 200 stores were expected to be open by mid-2008.
"We are expecting strong profit growth in the coming years and would certainly be holding on to the shares," said Marco-Tobares.
Chief Financial Officer Roger Taylor told Dow Jones Newswires that the company was seeing strong demand in the U.S. market - where retailers have a strong grip on the mobile phone market.
"Originally we said 150-200 stores by mid-2008 and today we've stepped that up quite significantly," he said.
Carphone Warehouse, which will begin selling Apple's iPhone on the Telefonica network on Nov. 9, also reported pre-tax profits in line with analyst expectations up GBP56 million from GBP14.1 million, excluding costs from recent acquisitions and intangibles.
Net profit increased to GBP12.3 million from GBP0.7 million.
FTSE-100 listed Carphone Warehouse, which runs 2,300 stores across Europe and now the U.S., has also boosted revenues in the last year, by moving into offering broadband services. The company increased its broadband customer base to 2.5 million during the period, after adding 215,000 new subscribers.
Carphone Warehouse's retail business - which sells mobile phone contracts for many of the major phone operators - posted a mixed set of results. The company reported slower than expected mobile phone subscriber numbers, albeit up 12% to 2 million. However, this was offset by a surge in pre-pay customers, which increased 26% to 2.9 million.
"In broadband, we are confident that the company will have at least 3.5 million customers by 2010 in a growing market place," said Evolution Securities analyst Freddue George.
-By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; firstname.lastname@example.org
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