Carphone Warehouse sees UK weakness
Mobile phone retailer Carphone Warehouse has raised its earnings per share by 80 per cent but performance in its UK arm lagged its other operations.
Europe’s biggest independent mobile phone retailer said operating profit at its Carphone Warehouse Europe division rose 18 per cent to £134.6m over the past year.
It said its new Wireless World-format stores were producing “excellent customer feedback and compelling financial returns” and it intended to convert most of its shops to the new format within five years.
Carphone Warehouse owns half of a joint venture with US electricals retailer Best Buy and currently trades from 10 Best Buy-branded megastores in the UK.
However, this division saw losses grow to £62.6m over the year, from £21m in 2010, which it attributed to investment in store development, and it said it was “evaluating” the next steps for the business.
It said lengthening phone contracts and weakness in the pre-pay market would reduce connection levels in the coming year, but was banking on better profits at its Wireless World stores.
Its Best Buy US division performed well, with an 111 per cent increase in profit share to £97.9m as new connections grew 28 per cent to more than 7m.
Its French business, Virgin Mobile France, returned to profit in the past year and delivered net income of £8.2m.
“This is a good set of results with strong performances from three out of the four divisions,” said Shore Capital analyst Ramona Tipnis. “The disappointment remains Best Buy UK, which delivered a larger loss than anticipated.”