Carphone Warehouse announced a 33 per cent jump in pre-tax profits yesterday and confirmed that price competition was hotting up between mobile phone manufacturers, with makers such as Nokia facing an increasing threat from Far Eastern rivals.
The telecoms retailer, led by its chief executive Charles Dunstone, said that before exceptionals, turnover for the year to 27 March was up from £1.03bn to £1.67bn, while pre-tax profits had surged from £57m to £76.3m. The dividend at the retailer was raised 30 per cent from 1p to 1.3p. Carphone Warehouse also announced that earnings per share rose 29.7 per cent during the year to 3.17p.
One disappointment for some analysts was the 385,000 subscribers to the company's new TalkTalk fixed-line service by the year end. The service competes with BT and offers free calls between its customers.
However, Mr Dunstone promised that TalkTalk was still growing at a fast rate and committed himself to ambitious growth targets. "We will pass the 500,000 customer mark in the next few weeks and anticipate that we will have over 900,000 customers by March 2005," he said.
Subscription connections to mobile phone services sold through Carphone Warehouse grew 26.4 per cent to 2.41 million. The rate of growth accelerated during the year, with the final quarter seeing 32.4 per cent growth.
The company said that growth in the pre-pay market was "robust", particularly over the Christmas period.
"Retail prices came down to levels not seen for three or four years because of the wide availability of cheap entry-level handsets from manufacturers and a renewed focus from network operators," the company said.
Carphone Warehouse opened 158 new stores and closed or sold 84. Outside the UK, the company said its French and Spanish businesses had particularly good years and the two markets now represent 23.3 per cent of the group's annual connections to mobile networks. Its shares ended down 3.75p at 143p.