14th Nov 2013 17:11
LONDON (Alliance News) - Mobile-device retailer Carphone Warehouse PLC Thursday said it swung to a loss in the first half of its fiscal year due to its costly exit from France, but it reiterated its full-year guidance as profits otherwise were lifted by market share gains and it set it sights on benefiting from the rollout of 4G networks.
The company swung to a pretax loss of GBP25 million in the 26 weeks to September 28, compared with a profit of GBP8 million a year earlier as it booked a GBP31 million charge for exiting the French retail market and GBP13 million in costs for the acquisition of the European operations it bought back from Best Buy.
However, excluding those charges, pretax profit rose to GBP19 million, from GBP4 million and earnings per share were 2.6 pence, up from 0.6p. Total revenues grew 5.8% to GBP1.57 billion, from GBP1,48 billion, while like -for-like revenues grew 8.3%, although there was an expected slowdown in the second quarter to 3.6% after the year-earlier period got a boost from a promotion.
It reiterated its full-year guidance for EPS, excluding charges of between 17p and 20p and raised its interim dividend to 2.00 pence from 1.75 pence in the previous year.
"Carphone Warehouse has delivered good like-for-like growth for the half and for the fifth successive quarter. This is a strong performance given the reduced marketplace activity ahead of the wider launch of 4G across Europe and the continued double-digit decline of the prepay market," Chief Executive Andrew Harrison said in a statement.
The company's shares closed up 6.5% at 272.50 pence Thursady
Carphone bought Best Buy's 50% share in their joint venture in June for GBP471 million.
Revenue growth was driven by increases in sales of post-paid mobile-phone services, or set contracts for mobile phone packages. However, post-paid service growth was partially offset by the continued decline of the pay-as-you-go market, leaving Carphone's customer base broadly flat at 4.1 million.
The growing popularity of smartphones, which only tend to be available on contracts, means the pre-pay market, where you buy a phone and then pay for usage as you require through top-ups, is declining. But the mobile device market in general is slowing as customers await the launch of new 4G services now being rolled out by operators before buying new devices that can be used on the new super-fast networks.
"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," Harrison said.
The company said it is still "conscious of the challenging consumer and regulatory environment across Europe", but said it is excited by the potential increase in buying and usage of new devices linked with the 4G rollout.
"4G services are available to a limited proportion of our customers, but we are encouraged by levels of customer take-up to date, and anticipate that momentum will build over time as customers become aware of the quality of services available to them," it said.
Virgin Mobile France, Carphone's 46% owned joint venture mobile operator 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.
Carphone said it remains committed to the Virgin Mobile France business.
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.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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