Carphone Warehouse Back into Profit on Internet Services
Published on: 27th Nov 2009
Note -- this news article is more than a year old.
UK based Carphone Warehouse has reported a return to profits for the six months to the end of September of £30 million compared to a loss of £23 million a year ago. Revenues that rose by 13 percent to £789 million.
Charles Dunstone, CEO, said: "Both TalkTalk Group and Best Buy Europe have traded well in the first half of the financial year. Each business has delivered a significant year-on-year improvement in operating free cash flow, with Headline EPS at the top end of market expectations. As a result, we are raising guidance for the full year to March 2010."
The plans to demerge its mobile phone retail division into a separate company, 50% owned by the USA's Best Buy is back on track for completion in the first quarter of next year.
Best Buy Europe, in which the Group has a 50% share, generated revenues of £1.67 billion, representing growth of 4% over last year.
Mobile connections for the period were up 2% to 5.9m, despite tough comparatives, with the 3G iPhone launched in the UK in July 2008. The handset market remains subdued but the firm said that it continues to gain market share in a number of European territories, especially within the high value smartphone segment.
Like-for-like revenue, stripping out the impact of new space, was up 3.1% and at constant exchange rates like-for-like revenue was down by 0.9%.
"This is undoubtedly a good set of results. Carphone Warehouse has significantly strengthened its broadband customer base by adding customers through the acquisition of Tiscali," said Richard Heap, Head of Telecoms at BDO LLP. "This development, combined with the strong performance of its business lines through Opal, has enabled the company to cement itself as a market leaders in broadband. The long-term question remains as to whether or not TalkTalk can retain this leadership position in an oversaturated market, particularly with new threats such as mobile and satellite broadband emerging."
"However, one does question Best Buy's business strategy of opening up so many stores at a time when most other flagship electrical retailers such as Dixons and Currys are moving their businesses to a more online model. Also of concern to analysts will be the retirement of Best Buy's CEO Bob Willett and what it means for the future of the company."