Carphone Warehouse cashes in on 3G

Profits solid, outlook promising

By John Oates, 3rd June 2004

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Carphone Warehouse made a pre-tax profit of £76m, up 33.8 per cent, on turnover of £1.85bn for the year ended 27 March 2004. It is increasing dividend payments by 30 per cent.

The company connected 5.35m customers in the year and of these 2.4m were subscriptions, an increase of 26.4 per cent. Average cash profit per connection fell two per cent to £56 due to more customers choosing to upgrade and stick with their existing network rather than switch.

Charles Dunstone, chief executive at Carphone Warehouse, said: "The outlook for our core businesses is promising. We are once again operating in a handset market demonstrating strong growth.

The rapid increase in the volume of our 3G connections since the start of 2004 gives some indication of likely future demand, and we are now seeing the incumbent operators start to come to market with their own 3G services. At the same time the rate of innovation and renewal from the handset manufacturers continues to stimulate consumer demand."

3G connections and handsets now make up 25 per cent of Carphone Warehouse postpay sales. This is up sharply from just five per cent in January.

Over the year Carphone Warehouse opened 158 stores and shut or sold 84, it how has a total of 1,214. The mobile retailer is optimistic about future trading and expects to open a further 200 stores this year.

Its fixed line business - Talk Talk - is performing well with just under 500,000 customers signed up. It predicts it will have 900,000 by next March. ®