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CPW pre-tax profit up 30%

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Electricals and mobile phone retailer Carphone Warehouse (CPW) saw pre-tax profit surge 30 per cent to £8.6 million in its first half, according to results published today.

In the six months ended September 30th 2012, UK like-for-like (LFL) sales rose five per cent while its European operations saw a 1.6 per cent LFL boost as it continues its investment strategy.

CPW Europe saw positive results overall, reporting EBIT of £12.5 million but, although this is ahead of guidance, it falls significantly short of the £20 million figure posted in 2011 as its year-on-year comparatives have been affected by the weak prepay market.

Joint venture Virgin Mobile France also reported a rise in revenue as its postpay customer base grew over the period despite strong competition, allowing the group to “enhance revenue, reduce costs and provide a more flexible strategic platform.”

Commenting on the results, Roger Taylor, CPW CEO said: “We have delivered a good performance in a dynamic mobile market, with sales benefitting from our renewed focus and specific investment initiatives.

“As a result, we have substantially increased our market share of UK postpay volumes and, while the prepay market remains weak, we hope for an improvement in the second half as the product pipeline continues to broaden.

“In Continental Europe, we have also been exploring growth opportunities for the business through potentially long-term strategic partnerships.”

Repositioning CPW Europe remains a primary concern for the group and the separation of the UK and Ireland business from the rest of its European portfolio has continued, “resulting in considerable cost savings”.

Growth opportunities across its Wireless World format stores in the UK are also being examined and the retailer will have around 280 of these stores in the UK by Christmas, with key elements of the format in its remaining 500 stores across the UK.

In response to the results, a statement from the company said: “While the industry and economic environment remain challenging, we have reasons to be optimistic.

“The product pipeline in postpay continues to excite consumers as smartphone technology further evolves, with good visibility now of 4G development across Europe.

“We are also hopeful of higher penetration of smartphones into the prepay category this Christmas as the range broadens and prices become more attractive.”

Published on Wednesday 14 November by Editorial Assistant

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