Carphone Warehouse’s UK revenues for retail and distribution were up eight per cent for the first half of 2008, compared with the same period last year.
UK revenue was £779 million for the period. Carphone put UK growth down to strong connections growth driven by the iPhone and demand for mobile broadband.
It said its share of UK retail revenue is at “record levels”. Carphone’s UK retail and distribution operations, which fall under the new Best Buy Europe joint-venture, contributed almost half total Best Buy Europe revenues.
Best Buy Europe, shared 50/50 with US electronics giant Best Buy, generated revenues £1.617 billion in the period, 12 per cent up on 2007’s £1.443 million first-half revenues as part of Carphone Group.
Best Buy Europe earnings before interest and tax (EBIT) were £37 million, a 20 per cent decline year-on-year from 2007’s £46 million figure. EBIT margin fell from 3.2 per cent to 2.3 per cent. Carphone put the reduction down to heavy investment in retail margin and its MVNO and Geek Squad operations, as well as the initial phase of its big box project in Europe.
Investment in European retail was partially offset by income generated by its new US Best Buy Mobile venture.
Mobile connections for the period were up 11 per cent to 5.7 million, with contract connections up 15 per cent to 2.3 million and prepay sales up eight per cent to 3.1 million. Carphone said it grew market share in a declining market, but said average margin on sales decreased as the sales mix incorporated lower-margin broadband sales and second-quarter spending on prepay slowed as the recession bit consumer spending.
Carphone opened 119 new stores and shut 100 during the period, at a cost of £26 million, leaving its retail estate 19 stores up and 10 per cent up in terms of floor space.
Meanwhile, TalkTalk Group, comprising Carphone’s fixed line and broadband businesses, posted revenues of £697 million for the first half of its financial year, two per cent down on revenues in the same period last year of £711 million. EBIT for the period was up, at £53 million, from £37 million during the same period last year.