Carphone Warehouse posts big rise in profits

Carphone Warehouse, Europe’s biggest independent mobile phone retailer, said it was “evaluating” the next steps for its consumer electronics megastores business as it posted an expected rise in profit.
By The Newsroom
Published 14th Jun 2011, 09:10 BST

The firm, which owns 50 per cent of a venture with US electricals retailer Best Buy, currently trades from 10 Best Buy-branded megastores in the UK.

“We are in the process of evaluating the next steps in our multi-format/multi-channel consumer electronics strategy,” Carphone Warehouse said.

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Some analysts said they believe the consumer electricals market is overcrowded and think the joint venture should withdraw from megastores.

The megastores update came as Carphone Warehouse, which also owns a 47.5 per cent stake in Virgin Mobile France, posted an expected 80 per cent rise in year earnings.

Earnings per share were 15.0 pence in the year to March 31, in line with company guidance of 14.5 to 15.0 pence, despite £62.2m of losses at the UK megastores.

The firm was boosted by strong demand for smartphones, tablet computers and US growth.

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It will pay an inaugural dividend of 5.0 pence and said it was “well positioned” to maintain its momentum despite the tough economic environment.

For the year to the end of March 2012 the firm forecast Carphone Warehouse Europe like-for-like revenue in the range of down 2 per cent to up 2 per cent, with headline EBIT of flat to growth of 10 per cent.

It forecast Best Buy Mobile U connections growth of 20 per cent and profit share growth of 20 to 30 per cent.

Related topics:Europe