Carphone connections up 3pc

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Carphone Warehouse reported a six per cent increase in revenue and three per cent boost to connections during the first quarter, compared with the same period last year.

Its Best Buy Europe retail and distribution joint venture with US electronic retailer Best Buy reported revenue of £773 million and connections of 2.7 million in the quarter.

Carphone said its aggressive trading, combined with a slow market, had eroded its gross margins slightly, but that results were in line with expectation and it would hold firm its 2009 forecast for the business of flat profitability (EBIT).

It said its ‘big box’ strategy, which will see it set up large format electronics generalists on retail parks in the UK and Europe, will roll out next year.

The demerger of its Best Buy Europe operation from its TalkTalk fixed line and broadband business is also on track, now banking facilities have been secured for both units.

TalkTalk revenues were stable quarter-on-quarter and down two per cent to £340 million year-on-year. Residential revenues were flat quarter-on-quarter and down three per cent year-on-year at £264 million.

Business revenues were up one per cent year-on-year, with early signs of progress on Opal’s new product offerings to SME customers, which includes broadband.

TalkTalk added 47,000 net new customers to its broadband base in the quarter, bringing ther total broadband base to 2.85 million.

Carphone group chief Charles Dunstone (pictured) said: “Both our businesses have continued to make good progress, despite the economic climate, and we are able to re-iterate all the financial guidance we have given for the full year. In parallel, work progresses on schedule towards our proposed demerger.

“TalkTalk Group is trading well, in line with our expectations. We added 47,000 net new customers to our broadband base and average customer spend is up 5% year-on-year. We migrated a further 59,000 customers onto our own network in the quarter and we now have 79 per cent of all our broadband customers on our unbundled network, leveraging the superior economics that it gives us.

“Best Buy Europe has also performed well, in line with our expectations, with connections up three per cent year-on-year, reflecting continued growth of market share in a subdued European marketplace. High-tier and prepay phones continue to drive connections growth, but looking ahead, we expect today’s high-tier phone features increasingly to cascade into the mid-tier range as technology becomes cheaper and touch-screen phones continue to gain popularity.”

He went on: “Our demerger process is well on track with banking facilities now in place for Best Buy Europe. We remain confident that separating our two businesses will enable the worth and potential of each to be more accurately evaluated.”

 

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