Carphone Warehouse results exceed expectations

3 Jun 2004

UK mobile and fixed line reseller Carphone Warehouse has reported a 0.4% rise in turnover to GBP1.85 billion and a 34% rise in pre-tax profit to GBP76.3 million for the year to 31 March 2004, on the back of robust performances from its domestic wireline service portfolio and heightened demand for 3G mobile subscriptions. The company, which now has operations in ten European countries, said that overall mobile connections grew by 22.6% to 5.35 million, of which 2.41 million were post-paid subscriptions, an increase of 26.4%. In the UK, the number of customers managed on behalf of O2 UK and Vodafone grew by 42.5% to 560,000, boosted by an agreement with supermarket chain Sainsbury’s to provide mobile services to its customers in association with O2 UK. Carphone launched a new fixed line service called TalkTalk in February 2003, to which it claimed 385,000 UK customers at the year’s end, a figure the company expects to rise to over 900,000 by March 2005. Its UK business-to-business network provider, Opal, doubled the number of minutes of traffic handled to 5.52 billion.

During the year Carphone increased the ambit of its European operations via a series of acquisitions. In June 2003 it purchased German mobile reseller Hutchison Telecommunications for GBP30.9 million. At the end of March 2004 Hutchison had a customer base of 690,000, of which 540,000 were post-paid subscribers on contracts of up to two years. In Spain it acquired Xtra Telecom, an alternative telecoms carrier with national coverage which during the year carried an average of 45 million minutes of traffic per month for business and wholesale customers in the international pre-pay market. Carphone plans to launch a residential fixed line

service in Spain using the Xtra network in September 2004. In Switzerland the UK company acquired N Tel, a switchless reseller with a base of 44,000 customers, of which approximately 90% were residential. In addition to these two acquisitions, Carphone launched fixed line resale services in France in May 2004. The company also manages approximately 600,000 customers in France on behalf of Orange and SFR.

At the end of March 2004 Carphone presided over a network of 1,214 stores across Europe, up from 1,140 twelve months previously. It is planning to launch 200 new stores during the current financial year, approximately half of which will be in the UK.

United Kingdom, O2 UK, Vodafone UK