Carphone Warehouse to pay dividend
Mobile phone retailer Carphone Warehouse raised its earnings forecast and pledged to pay a dividend, saying strong US growth and demand for smartphones would offset extra investment in its UK megastores.
Carphone, which owns 50 per cent of a venture with US electricals group Best Buy and a 47.5 per cent stake in Virgin Mobile France, said on Friday it now expected headline earnings per share of 13.5-14.0 pence for the year ending March 2011, up from 11.5-11.9 pence previously.
Earnings surged to 5.5 pence a share in the six months to 30 September, up from 1.5 pence the year before and beating analysts’ average forecast of 3.3 pence in a company poll.
The group said it now expected Best Buy Europe’s share of the Best Buy Mobile business in the United States to reach £85-95m this financial year, up from its previous forecast of £53-55m.
But it also said the new chain of Best Buy megastores in Britain would make a loss before interest and tax of 50-55 million pounds this year, up from its previous guidance of 40-45 million, due to higher marketing expenses.
The group plans to pay a final dividend of 4.5 pence a share.
Carphone’s shares have more than doubled in value since their demerger from telecoms business TalkTalk in March.