14th Nov 2013 09:49
LONDON (Alliance News) - Carphone Warehouse PLC reiterated its full-year guidance Thursday after it posted rising revenues but swung into a pretax loss in the recent half year.
The loss resulted from costs arising from mobile-device retailer's exit from the French market and its acquisition of 100% of CPW Europe.
Carphone Warehouse hiked its interim dividend to 2.00 pence, increased from 1.75 pence in the previous year.
The company posted a group pretax loss of GBP25 million in the 28 weeks ended September 28, down from a pretax profit of GBP8 million. Profit was hit by costs arising from the company's exit of its CPW business in France and the acquisition of the remaining 50% share of its joint venture, CPW Europe.
Carphone bought the Best Buy Company Inc.'s 50% share in the joint venture in June for GBP471 million. As CPW Europe had previously been a joint venture, it wasn't included within group revenues prior to that time.
Carphone's now wholly owned CPW business saw revenues of GBP1.6 billion, up from GBP1.5 billion in the previous year. Pretax profit was GBP14 million, up from GBP2 million.
Revenue growth was driven by increases in sales of post-paid mobile-phone services, meaning set contracts for mobile phone packages. Although CPW had a strong first quarter, its performance was damped in the second quarter by the impending launch of new 4G services, leaving consumers more hesitant to upgrade or buy new contracts.
However, post-paid service growth was partially offset by the continued decline of the pay-as-you-go market, leaving CPW's customer base broadly flat at 4.1 million.
Virgin Mobile France, Carphone's 46% owned joint venture with Virgin Group, saw revenue decline to GBP176 million from GBP192 million, in line with expectations. Its total customer base declined 18,000 during the first half to 1.70 million, as post-paid customer numbers dropped off.
"Looking ahead, we reiterate our full-year guidance. We are in excellent operational shape to take advantage of the key Christmas trading period and are encouraged by the growth of 4G as it starts to arrive across all major networks," said Chief Executive Officer Andrew Harrison in a statement.
In a separate announcement the company appointed Gerry Murphy as an independent non-executive director, effective April 2. Murphy previously served on the board of Deloitte Touche Tohmatsu Limited.
Shares in Carphone were trading up 6.2% at 271.75 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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