Carphone Q3 UK revenue up 6.3pc

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The Carphone Warehouse has confirmed the March demerger of its TalkTalk unit from its retail operation, at the same time announcing mobile connections were up 1.4 per cent to 3.75 million across its European estate in the third quarter of 2009.

In The UK, Carphone revenue was up 6.3 per cent in the quarter, and 8.3 per cent in the year. It put its growth down to sales margin stability, improved operating margin after cost-cutting and increased share of smartphone sales.

It said it will have over 100 Wireless World stores in the UK by March 2011, achieved through a mixture of new stores and refits, and will roll out the format to continental operations also. Its first big-box retail sites, with its joint venture partners signage, will be opened in Spring with stoes in Thurrock, Southampton and Merry Hill in the West Midlands.

Revenue from Carphones European retail operation was up 5.5 per cent on the same period last year, and 3.7 per cent in constant currency.

Its European retail business saw connections rise 1.4 per cent to 3.75 million. It said the transition from a a service provision model in Germany to a UK-style retailing business saw German revenue decline one per cent to £966 million, with service provision reenue down £45 million on the third quarter in 2008.

Its US venture with Best Buy, in which it has a profit-sharing arrangement with the US brand, saw connections jump 26.7 per cent to 1.67 million, with revenue up 33 per cent. Best Buy Mobile now operates from all of Best Buy’s 1,068 stores and from 71 stand-alone stores, up from 52 at September 2009.

It has raised its earning forecast for March 2010 to 14p-15p per share, and its expected share of net income from its 50/50 Best Buy Europe joint venture to £40 million-£45 million, up from £30 million-£40million.

Meanwhile, TalkTalk revenue was £446 million following the Tiscali acquisition, 29 per cent higher than the same period last year. It ended the quarter with 4.15 million broadband customers. It expects its broadband base at the end of March 2010 to be 4.1 million-4.2 million.

Net broadband customer additions in the quarter were 36,000, boosted it said by the X-Factor advertising campaign. Broadband ARPU was £23.8.

The non-broadband customer base was 1.1 million, down in line with expectations it said, and non-broadband ARPU remained broadly flat at £20.1.

Carphone’s Virgin Mobile France interest saw customer numbers rise to 1.69 million following the purchase of Tele2. Carphone has a 47.5 per cent stake in the MVNO.

Carphone Warehouse chief executive Charles Dunstone said: “This has been another strong quarter, with good performances from TalkTalk Group, Best Buy Europe and Virgin Mobile France. We are consequently again increasing our guidance for the full year.

“TalkTalk Group’s brand profile, value for money proposition, and customer service have continued to generate real momentum in the market, attracting 36,000 net new broadband customers during the quarter and taking the base to 4.15m.

“We are now confident that our base at the end of the current financial year will be towards the top of our existing 4.1 million to 4.2 million guidance range. The Tiscali integration remains well on track to create a highly efficient platform for providing customers with excellent value and service.  

Best Buy Europe, in which we have a 50 per cent share, has seen a very good quarter. Connections were up 1.4 per cent despite tough annual comparatives, and the division has also delivered impressive like-for-like sales growth of 5.5 per cent.

As a result of this and a strong performance from Best Buy Mobile in the US we are today increasing forecasts for Best Buy Europe. We now expect our share of Best Buy Europe’s net income for March 2010 to be £40 million to £45 million with group Headline EPS at the top of the existing 14.0p to 15.0p range.”

 

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