Delays for JV at Carphone Warehouse
CARPHONE Warehouse (CPW) yesterday dodged making a decision on its Best Buy Europe joint venture despite the unit acting as a millstone on its books.
Losses at its “big box” stores, in which CPW is involved in a 50/50 partnership with US firm Best Buy, overshot forecasts to hit £62.2m.
Investors had hoped a strategy would be laid out at a meeting yesterday but chief executive Roger Taylor said: “We did hope to have it finished but it’s now looking like anything up to another two or three months before we’ve finished all the evaluation.”
He said the firm is still searching for the correct formula for selling electricals in the UK.
The firm’s other divisions fared better, with Carphone Warehouse Europe seeing its profits rise 18 per cent to £134.6m, buoyed by soaring demand for smartphones.
Its Best Buy Mobile US venture also saw booming demand, raking in profits of £97.9m. Its Virgin Mobile France business, in which it owns a 47.5 per cent stake, also made profits of £20.6m, up from a loss of £22.2m the year before. CPW will pay an inaugural dividend of 5p and said it is “well positioned” to maintain its momentum despite the tough economic environment.
In the US, Best Buy beat quarterly profit and sales estimates as strong demand for mobile phones, calling plans and tablets offset weakness in its TV business.