Carphone hit by property slump

UK retailer the Carphone Warehouse reported a healthy increase in sales and profits for the year to the end of March, but issued a gloomy outlook due to the negative effects of the credit crunch and associated property slump.

Group revenues were up 12 per cent year on year to £4.47bn, while profit before tax jumped 81 per cent to £124m.

The company reported a 15 per cent increase in mobile phone subscriptions to 11,494 million, and chief executive Charles Dunstone waxed lyrical about the expected “strong customer response to the iPhone 3G,” which launches next month.

The company’s broadband customer base increased by 442,000 to more than 2.7 million, but fixed line voice and internet dial up customers declined by 29 per cent to 1.7 million.

Speaking at the result presentation on Thursday, Dunstone said, “We remain cautious in our outlook for the year ahead, given the poor economic climate and inflationary pressures on European consumers.

“Broadband net adds so far this year are lower than expected. The slowdown in the housing market and a strong performance in mobile broadband sales in our stores have led to lower gross adds. However, this has been offset to some extent by falling churn.  If these trends continue, we expect lower revenue growth this year than previously indicated, compensated by improved margins.”

Carphone recently struck a deal to sell 50 per cent of its European and US interests to consumer electronics shop Best Buy.

Carphone, which will make £1.1bn from the sale, will also go into business with Best Buy, expanding into the field of consumer electronics.