Pink phone sales boost profits for Carphone Warehouse

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The Independent Online

Bumper sales of Motorola's trendy pink Razr mobile phone helped Carphone Warehouse thrash City targets for Christmas. Europe's biggest mobile retailer shifted almost 400,000 of the gaudy handsets over the three months up to the end of December.

During that time, Carphone hooked up 30 per cent more mobile phone customers than in 2004 - about twice the number expected. Total connections, including fixed-line, were up almost one-third on last time.

Revenues climbed to more than 7 per cent and gross profits jumped a shade higher than 13 per cent.

Carphone reassured investors that its pre-tax profits this year would be towards the top end of expectations. They are likely to be about £135m, £7m higher than the average forecast. Carphone shares, which surged 61 per cent in 2005, eased 2.5p to 265.75p yesterday.

Charles Dunstone, Carphone's founder and chief executive, said: "These figures represent a very strong performance, reflecting excellent market conditions, exclusive products and continued focus on investment in service and value for our customers."

Analysts agreed. Tony Shiret, at Credit Suisse First Boston, said: "Carphone Warehouse has delivered spectacular results. This is a reminder of the company's pre-eminence in retail and more generally its ability to capitalise on trends."

Sales in the next three months should be further boosted by more new shops. Carphone has opened 126 stores in the past quarter and now has more than 1,700 outlets.

Revenues from Carphone's fixed-line business were up more than 40 per cent to £140.5m, after takeovers of the small fixed-line operators OneTel and Tele2 for up to £163m. It now controls 10 per cent of the fixed-line market in Britain.

The group is increasingly operating telecoms services businesses under its own brand, such as the Fresh service which was relaunched in November. That is expected to lose £5m in the year to the end of March as it tries to woo customers from its bigger rivals such as Vodafone and O2.

Carphone is also planning a major push into the booming broadband internet market before the end of June. The group, which derives about 40 per cent of its revenues from overseas, has snapped up a chain of nine mobile shops in Spain.