Carphone Warehouse promises year of growth

Carphone Warehouse was yesterday promising a year of growth despite predicting customers would be slow to take up new mobile phone services such as picture messaging.

"Our current trading figures leave us feeling increasingly optimistic for the current year ahead. We are delivering increased sales without the benefit of picture messaging and the first 3G services which are still to come," Charles Dunstone, its chief executive, said.

Increasing market share combined with a higher proportion of repeat business gave it confidence about its performance both this year and beyond.

Mr Dunstone said the company was assuming that picture messaging, a service that enables users to send and receive photos on mobile phones, and 3G services, which will enable video over mobile, would not make a big impact this year.

Shares in the company rallied 9.8 per cent, or 7.5p, to close at 84p after it announced a 25 per cent jump in mobile phone connections in the four weeks of May to 260,000 and a 12 per cent rise in like-for-like retail revenues.

The company, which is chaired by the former Orange boss Hans Snook, also said its UK market share had risen to more than 20 per cent from 12 per cent last year.

But the upbeat noises came as the company registered a drop in pre-tax profits, before exceptional items, in the 52 weeks to 30 March to £46.8m from £47.4m. Sales were £1.15bn, up from £1.1bn.

Including exceptional charges, largely to cover the cost of its European restructuring and store closure programme, the company made a pre-tax loss of £23m.

"Last year was a very tough year," Mr Dunstone said, adding he believed the company's performance was "very credible" given the European handset market fell 40 per cent.