European Retailer Sees Sales Slightly Down

Europe's largest cellphone retailer, The Carphone Warehouse has reported a strong UK retail performance; substantial growth in Group market share and subscription connections in a market that is over 40% down, but weaker performance in three European countries. In the UK, the company recorded connections of 661,000 against 687,000 last year. On the European mainland, the company recorded connections of 484,000 against 529,000 last year. Connections excluding Germany, Holland and Belgium were up 3% on last year.

Charles Dunstone, Chairman and Chief Executive said: "The company has delivered a strong performance in a European handset market which is estimated to be down by over 40%. The Group has continued to win market share across Europe with an increase of over 40% in nearly all markets. In the UK we have made particularly strong gains, where our share of the mobile handset market is now in excess of 20%."

"Like for like revenues declined against very tough comparatives, though by significantly less than the market as a whole. Against this backdrop our UK operating business achieved a 2% increase in like-for-like gross margin and a 21% growth in subscription connections, a particularly strong performance. We continue to be disappointed by our performance in Germany, and The Netherlands and Belgium were also weaker than we had anticipated. Management focus has increased accordingly. The overall market for mobile handset sales will continue to be tough for the next six months. We intend however to continue to grow our market share, our subscription connection numbers and our quality of earnings. In addition we foresee an ongoing contraction in the total number of distribution points for mobile phones across Europe. From this Autumn onwards we believe that a combination of new handset functionality and innovative technology will once again stimulate the market."

Article published on 24th January 2002