The Carphone Warehouse has reported a 653 per cent rise in profits, from £73 million last year to £550 million in the year March 31, 2009. Revenues were down 2.7 per cent from £1.42 billion last year to £1.39 billion.
The company said the results were in line with expectations.
Carphone Group chief executive Charles Dunstone (pictured) said: “Against a difficult economic backcloth, we have delivered strong results and we have considerably strengthened both our market position and our financial position.
“We have also restructured the group, enabling us to operate more efficiently than ever before, and we have taken key strategic steps to drive our future growth and returns for shareholders.
“Our retail business has again out-performed its marketplace, increasing connections in a year when we estimate the European handset market fell and thereby significantly increasing its market share albeit with an investment in margin.
“By selling half this business to Best Buy we have fundamentally strengthened our balance sheet at just the right time and, most importantly, forged a formidable partnership which will in 2010 take us into new growth territory, change the customer experience of consumer electronics retailing and meet the fundamental demand for truly connected communications.”
The demerger of the TalkTalk division from the Best Buy Europe venture is set to be finalised by July next year.
Said Dunstone: “It’s been increasingly obvious that the Group is now two businesses – Best Buy Europe and TalkTalk Group. The one grew out of the other; but both have now reached the stage where there are no material synergies between them and where, for operational and competitive reasons, they need to operate independently.
“The businesses are effectively run as separate entities already, each with highly experienced and strong management teams.”
Dunstone added that TalkTalk’s recently announced deal to acquire Tiscali’s UK operations would make it the UK’s largest residential broadband provider.
“Because of the degree of change we have undertaken, it is not easy to compare last year’s financial results with this year’s. On a statutory basis, we have increased earnings per share by over seven times,” he said.
“We said earlier this year that, while we did not see an early end to the economic pressures, we did not see further deterioration and, as far as we can see, that remains the case.”
TalkTalk served more than 3.9 million fixed line customers in Q1, comprising 2.8 million broadband and 1.1 million voice-only and narrowband customers, a net growth of 93,000. The division increased in profitability, with EBIT growing by 80 per cent to £124 million.
B2B revenues from its Opal Telelcom division declined by five per cent from £312 million to £296 million. The company said Opal continued to improve its revenue mix, with an ongoing trend towards higher value services offsetting falling premium rate traffic.
In the second half of Q1, the business launched its new suite of data products for the small business market, which is expected to drive moderate revenue growth in 2009/10.
Revenues from Best Buy Europe grew 15 per cent to £3.56 billion, partly due to the increase in value of the euro. Headline EBIT fell 33 per cent to £101 million.
The business achieved total connections of 12.5 million, up eight per cent year-on-year despite an estimated year-on-year decline in the European handset market. Subscription connections were up eight per cent to 4.8 million.
Growth in subscription sales was driven by high-end, internet-enabled handsets and mobile broadband connections. Prepay connections were up nine per cent to seven million.
“The market for mid-tier handsets, the historical ‘bread and butter’ of the subscriptions market, was in decline throughout the year. There are now signs however, that the features available in high-end devices are now cascading into the more mass market mid-tier ranges, and this segment of the handset market is beginning to show signs of improving,” the company said in a statement.